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What Should I Buy
Should I buy a home or build one?
If you can find an existing home in an area you like at a fair price, you are better off financially to purchase an existing home. New construction is very expensive these days and you must pay HST as well. Most contractors in the industry are in high demand and expensive. There is a lot of stress involved in building a home. You can rarely get your money back in the re-sale market unless you live in the home for quite a few years.
Should I buy a house or mini-home?
There are 2 important questions to ask yourself here
- How much home can I buy with the money I have saved?
- How much will my new home increase my monthly expenses?
Even if you have a lot of money saved to put down on your home, your monthly increase in expenses could put you over your budget. For example:
Increase in Monthly Expenses
- Property Taxes - calculated as a rate per $1000 of the assessed value of the home
-
example:$50,000 home is $1.25 per $1000 so $50,000 X 0.0125=$625/year
most people add this onto their mortgage payment
- Higher heat & power costs - if you are used to an apartment’s cost
- House Insurance - $30-$40/month approx.
- Water & Sewer costs if in town - $30/month
Your mortgage broker or banker will help you determine what your monthly mortgage & property tax payment would be.
Important factors to consider
- mini homes are much cheaper to purchase (new or used) than houses
- houses usually appreciate (go up) in value over time while mini homes usually depreciate (go down) in value over time
- many neighbourhood covenants won’t allow mini homes
- mini home park is an option instead of buying land – Approximately $170-200/month pad cost
- mini home parks have very small lots and not much privacy
How Repos Work
There are 2 types of repossessions on homes: a tax sale and a mortgage sale.
A tax sale is related to overdue property taxes. Taxes are billed in March for that year. If any homeowner is late paying these taxes by a year, the government will announce a tax sale. That is when you see an ad in the newspaper about the tax sale for that property. The owners are given a deadline to pay the bill (+ hefty interest fees and late payment fees) and if it is not paid by that date, they hold an auction for that home.
A mortgage sale is related to late mortgage payments to a financial institution. Once the payments have been in arrears for a specified amount of time, they will announce a mortgage sale in the newspaper. The owners are given a deadline to pay the bill (+ hefty interest fees and late payment fees) and if it is not paid by that date, they hold an auction for that home.
How the auction works
There will be a minimum reserve bid for the repossessed home on auction day. If no bid reaches that minimum price, the home is not sold at the auction. The home then gets listed with a real estate firm and is sold like every other home on the market.
Ask Mr. Realtor!
Recent Questions & Answers
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A conditional offer is an offer to purchase a property which has a clause that requires the buyer to sell another property before they can purchase this one. These can be quite confusing with many details so ask your realtor to fully explain how conditional offers work.
If you just need to upgrade the electrical panel to 200 amps, about $1200 should cover it. However, if you also have to upgrade the entrance to the house, you would be looking at quite a bit more cost.
The most important thing about an exclusive listing is that it can't be found on MLS. It is a listing through one company and has to be sold through that company. It can be advertised in newspapers, personal websites, etc. but won't be found on the largest website of all-MLS. Since over 80% of homes for sale are found on MLS, it's not a good idea for sellers to list exclusively because your listing won't be seen by nearly as many potential buyers.
If you built a home today, your septic tank will likely be concrete with a field. If build properly, they can be zero maintenance and may not ever have to be pumped out. In the past, you could put any type of septic tank in including: steel tanks, fiberglass tanks, pressure treated wood, or even just a barrel in the ground with a pipe going into a ditch instead of a proper drainage field. Contact the Dept. of Health regarding new construction septic systems.
This depends on the realtor who lists your home. The most important advertising is on MLS (multiple listing service) which is where most buyers look for homes. Most buyers look for homes on the internet these days. There are many other websites used to advertise homes for sale as well such as: the company's website, personal websites, Kijiji, etc. However, many properties are still advertised in local newspapers, real estate guides, etc. When interviewing realtors, ask them how they will advertise your home for sale.