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Much to everyone’s disappointment I have been considering buying a condo (though a cheap condo that I can live in until I find my prince charming who will sweep me off my feet and buy a large home to house me- KIDDING).  A small condo that I can rent out easily in case the common-law or marriage relationship (or whatever) that I am in falls through.  Throughout the terrible heartbreak ordeal I learned that it is important as a woman to be financially secure (not that I wasn’t), but I can imagine what it must be like for a woman who may not earn as much (or more) than her partner.

I guess it goes back to my post about financially independent women.  I think it’s important, but that’s just my opinion.

So, enough blabbing.

Let’s go back to the rent versus buy debate.

Now, I know that most people out there will talk about how if you invest the difference into the stock market at a 8% return (really who gets an 8% return these days at a sustained pace?), then renting beats buying any day.

I know that some people would do anything to be a homeowner, and some people would rather sit in a VW beetle full of clowns before they buy a home because they are diehard renters.

So considering the balanced, objective approach, I sought to find some rent versus buy calculators and found some great ones that are objective and practical, including most important factors that can tip the scales one way or another.

When Renting, Considerations Are:

• Utilities- Are these included with the tenancy agreement?  Hot water? Gas? Electric heat? Cable and internet (sometimes these can be included if you live in a garden or basement suite).  How much does the average utility bill cost?  You don’t want to be faced with big surprises later on. Continue Reading →

Rising house prices are a good thing for a homeowner. It means rising home equity and a stronger balance sheet. It’s an entirely different matter however for a prospective homebuyer. It means that you will pay substantially more for a house than buyers did just a couple of years ago. One of the ways to get around this problem is to buy a house that’s a fixer-upper – a house that will need a lot of repair work.

Houses that are in need of significant repair will generally sell for a good bit less than what a “turnkey” house will (turn the key and move in). But a fixer-upper can also lead to unforeseen complications.

How can you buy a fixer-upper and avoid some of those complications?

You must buy well below market

If you’re going to buy a fixer upper it’s extremely important that you buy the home for well below market value. That doesn’t mean purchasing the house for 5% or 10% less than what surrounding houses are going for, but a discount that is consistent with the level of repairs that will be required.

There should be a reasonable discount applied for each and every repair job that needs to be performed. You may be able get away with a 10% discount if the problems are mostly cosmetic. That would include repainting the home, pruning back neglected landscaping and fixing a few broken windowpanes or doorknobs.

Major repairs, such as replacing the roof or heating system, should increase the discount substantially. You should never make an offer on a fixer-upper until you have a good idea as to what repair work needs to be done, and a provision in your contract that will allow you to negotiate the price based on those repairs.

Get a very detailed home inspection

Even if you are very good at repair work yourself, you should still get a home inspection. It never hurts to have a second pair of eyes looking at a property, especially if it has obviously been neglected. Continue Reading →

Although we are currently in a buyers market (or as some may want argue, a do not buy-do not sell market), some people are still selling their homes.  Before you start asking around for realtors (or if you were super keen, doing it yourself), you should consider the costs involved in selling your home.

Breaking down the numbers will help you decide a price that you are comfortable with when selling your home.  You don’t want to go ahead with what the realtor says and suggests and then later find out that you are “in the hole” because you didn’t factor in the real estate commissions that are due.  The last thing you want is a feeling of anti-climactic non-excitement when realizing that the money you were hoping to make off your real estate sale wasn’t really all that much to begin with.

Here are some expenses to consider when selling your home:

Real Estate Commissions

Unless you are planning to sell your home yourself or planning to choose a cheaper real estate company that uses smaller commissions, you will likely have to pay the typical real estate commission rate, which is:

7% on the first $100,000 and 3.5% on the remaining balance.  This fee is split between the buying and selling real estate agent and the person selling the house has to pay this fee.  It probably doesn’t seem like much, but on a $350,000 home that is equivalent to:

$7000 + $8750= $15,750

If you made money on your home that commission probably won’t phase you very much, but if you can barely get what you paid for the home, you might want to think twice about selling in the current buyer’s market. Continue Reading →