iaink

You have more faith in a realtors interest in getting you in the right home rather than a home that will do than I do. The cynic in my thinks their interest is best served by keeping you happy enough that you go to them when you decide you want to sell, then they get the commission twice.

I honestly dont think I could ever have known enough about what I wanted from a place during a two week recci, and I wouldnt trust a realtor enough to figure it out for me.

ChrisBoar

You'd be surprised what you can do in 2 weeks. We did a 2 week reccie of Calgary before finally deciding on Vancouver Island.

Just going on personal experience. We actually came over on a holiday without any intention to buy, but ended up buying a house as we didn't want to lose it. We were recommended a realtor by someone local I know. He was great, didn't pressure us into buying anything, just showed us the different areas and house types. We ended up buying one anyway and haven't' regretted that decision one bit.

There's enough info now on the net that folks can do a lot of homework before they arrive. E.g. There's this group, several local yahoo groups for different parts of Canada (I'm on the Brits to Vancouver group) where you can enquire for local knowledge/referals/etc.

I'm only looking at this from a pure financial viewpoint. From a 'Net worth' point of view renting makes no sense. Obviously though moving to a different country is a huge change for folks and renting can be seen as helping to ease in gently to the new country, but folks need to weigh up the financial pro's and con's.

iaink

But you didnt decide to move shortly afterwards, its the selling commission and closing costs that are the financial killer. Renting is insurance. Whether its worth it depends on if rents are high and if house prices will increase in the mean time. In a lot of canada neither is really the case.


This thing about houses that people fall in love with bugs me too. If you had come over a few weeks either side of that date that house might not have even been on the market. Doesnt mean some other "dream house" wouldnt be up for grabs instead though...

dbd33

This is an extremely dodgy assumption. There have been several property price slumps since I've been in Canada and I know of a part of Ontario where house prices are steadily falling now. In order to offload a house in that part of the country you have to find a newcomer, something agents are well set up to do.

ChrisBoar

Well as I said I'm just relating our personal experience from 6 years ago.

Renting is only 'insurance' if you can do it for just a few months. I suspect most family size homes for rent are for a minimum of one year. The house next to us (which is exactly the same as ours), is rented at $1600/month. That's $20K that could have been used as down payment on a new home, assuming you had the funds upfront to start with.

Alan2005

This is quite a silly statement. Paying rent makes just as much sense as paying debt interest.

If you are going to make it a financial decision, do it sensibly rather than coming up with stuff like this. It's pretty easy to knock up a spreadsheet based on how much equity you gain vs rent paid and other associated costs of moving / owning etc. Don't forget to include opportunity costs such as missing the chance to earn 10% per year on the stock market.

el_richo

Unless, like many do, you decide Canada is not for you and moving back to the UK is. Or work and/or unhappiness with the area has you wanting to move elsewhere. THESE scenarios are where the renting "insurance" makes more sense.

Aversion to risk is the name of the game.

Maybe the OP should start a new thread with a Poll

iaink

And paying $10k to replace the shingles

I think I made a comment earlier about living in a convenience suite hotel for a month or two if rent was too much. I was paying $450 a month for a 2 bed apartment, no one says you have to rent a family home to figure out an area.

What it really comes down to is how much will it cost in commision to move if you do make a mistake. Around here its not too bad because the average property sells for ~$200-250k and commission might be $10k, plus associated closing costs. In Vancouver its multiples of that and commision could be tens of thousands.

I would recomment anyone to look at all the variables and decide accordingly

ChrisBoar

Why? Your personal net worth is probably the most important financial aspect of your life that most folks have no clue about. Removing the equity value of your home from the equation causes a huge drop in your net worth (unless you happen to have a 100% mortgage).

Alan2005

It's not just about financials anyway. Life is to be enjoyed - perhaps you fancy spending a year or two living somewhere you wouldn't necessarily want to buy long term. That swanky downtown condo with mountain views for instance. Renting gives you that option.

iaink

Even if you have 50% equity a large amount of your mortgage payment is interest isnt it? My mortgage payment is modest, but 2/3 is interest!

dbd33

How is it important?

Wild fluctuations in the value of my assets haven't made any difference to my life. At least, not that I've noticed.

el_richo

Amen to that, brother

Alan2005

Huh? What's the percentage of equity got to do with it. It's about the net-change, not the total value. Doesn't matter if you start with a 100% or 10% mortgage - it's the difference at the end of the year that counts. How much equity do you build up in the first few year of mortgage payments - it's not a great deal compared to the interest you are paying. Unless you are relying on leverage and capital appreciation - which is foolish imo.

el_richo

Plus lost interest on the down payment