Vancouver Realtor Colette Gerber shares her lessons learned from helping her own daughters out with those first down payments  

 

It’s no surprise that young people today can have a tough time coming up with a decent size down payment that will get them on the monopoly board of Metro Vancouver real estate.

 

With the average home price in Metro Vancouver registering more than half a million dollars, you could hear them issue a collective sigh of resignation as they crunch the numbers to find the necessary down payment can easily hit six figures.

 

I recently helped my two girls to buy their first homes and I’m happy to share some of my experiences to help other parents and first-time buyers making this important purchase.

 

When I saw my daughters struggling to put together sizeable down payments, I stepped forward and offered financial help, which I think made it easier for them and allowed me to help them secure their future. For reasons I’ll explain later, I, like most parents, made my financial help a gift rather than a loan. Here are some of my tips from going through the experience twice and from helping other first-timers and their parents:

1. Rent or Buy?

There has been lots of discussion in the media suggesting young people should forget about buying, and instead look to rent a home and put their money in other investments. I couldn’t disagree more. Owning one’s home has long been, is now and will be a long time from now, the best way for the average Canadian to build financial security and stability in their lives. Unlike other investments, which can take very specialized knowledge and expertise, buying a home is within the reach of many young adults if they take a realistic approach (see REW.ca’s article on “Buy Vs Rent: Which is Better Long Term?”).

2. Should Young People Ask their Parents for Help?

Once they have made the decision to buy, the first-time buyer has to get their down payment in place. As a Realtor, I always take young people through the process of figuring out how much they can afford, first asking them how much they have to put down. If that is an issue, then I explore with them their options, including the possibility of approaching their parents for financial help. Noted Vancouver condo marketer Bob Rennie estimated this year that 45 per cent of first-time buyers approach their parents for help, so it’s very common.

3. Bank of Mom and Dad: Loan or Gift?

I gave my daughters a gift because I didn’t want to put an extra financial burden on them of making yet another monthly payment. Personally, I see lending the money as a more complicated process, both financially and emotionally. But many parents cannot afford to do this – very often the funds will have to come from retirement savings, and will need to be paid back. If so, ensure you have a solid, business-like agreement in place for the repayments, including how much and how often, so that everyone’s expectations are aligned. And then stick to it! (More on the legal ramifications of the Bank of Mom and Dad here.)

4. Use a Mortgage Broker

I told my girls – as I tell all my clients – to first get pre-approved for a mortgage once you know how much you have to put down. I suggest using a mortgage broker to do that as they often get better deals on rates than even one’s own bank is willing to offer. There is a lot more to mortgages than interest rates and that is where you can benefit from a mortgage broker who shops your loan around to several financial institutions. And get the mortgage pre-approval in writing.

5. Use a Realtor

A Realtor can be the best asset a first-time buyer can have. An agent representing a buyer knows the market, knows properties, can provide invaluable advice on the buying process, can negotiate the best price, and is objective during what can be a very emotional experience. Most importantly, it doesn’t cost the buyer a penny because it’s the seller who pays all agent commissions.

6. How Much to Spend?

I suggested to my daughters that they think about what sort of lifestyle they want to pursue as they become homeowners. For instance, if they want to travel, go out to dinner, etc., then perhaps they shouldn’t spend to the top of their pre-approval home price.

7. Is Renovating Realistic?

When it came to renovating, I advised my daughters to be very cautious. A first-time buyer has just spent a lot of money to buy a home. I’m not talking about minor things like putting on a fresh coat of paint, which can be a do-it-yourself project.

But when it comes to more involved and expensive renovations, it’s best to live in the property for a few months. What you thought at first was so important to change may turn out to be not so important after all.

8. When to Trade Up

Some young people are impatient and consider moving up to a better home after just one or two years in their first home. My advice is, “You’re young, you have time. It’s not worth it if moving up means compromising your lifestyle or putting a strain on your relationship.” A first-time buyer should only consider moving up when the current property has increased in value and selling could push them up to the next level.

 

Because YOU Deserve the Best ...

 

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REW.ca posted a perfect article for today's dreary fall weather that I would like to share with you:

 

Fall is in the air and with it comes vibrant red, orange and yellow foliage and cooler nights. It’s also the season when you need to spend a little time outdoors to prepare your home for the chilly temperatures ahead. With the heavy wind and rainfalls we experience on the West coast, a little fall clean-up will go a long way to avoid potentially expensive repairs or nasty slips.

 

REW spoke to Carole Briggs of Gardens of Eden Plantscaping and Mora Scott, media relations at BC Hydro.

 

Garden Clean-up

Taking a little time to prepare your garden for winter will make spring garden clean-up a breeze, says Briggs. First off, remove any dead foliage and annuals out of the ground. Then, it’s time to add new organic rich soil to ensure that you will have a healthier growing garden next spring.

“It’s also the time of year when I recommend fertilizing the lawn to strengthen your lawn’s roots and kill any weeds,” says Briggs.

Trimming Branches

Typically, pruning trees is a spring job. However, if there are trees growing too close to power lines, both Briggs and Scott advise hiring a professional skilled at maintaining healthy trees and plants and who are able to identify hazards created by vegetation.Falling branches and toppling trees can be prevented with regular maintenance.

Sprinklers and Outdoor Faucets

Before the first frost, disconnect your garden hoses and blow them out. Winter temperatures can freeze the water trapped inside your hoses, which can cause your indoor pipes to burst. Briggs suggests it be done in October or early November at the latest.

Gutters and Eaves

When cleaning the leaves off the gutters, pay particular attention to the downspout. If leaves and debris are clogging it, water won't drain properly and – along with mildew and mud – you’ll end up with sagging gutters.

However, Scott cautions against using a metal ladder near power lines when cleaning out your gutters. A fiberglass ladder is a better solution in this situation.

“It is also much safer if you have someone with you anytime you are up on a ladder,” adds Scott.

Sidewalks and Driveways

Make sure to check your sidewalks and driveways for any cracks as water can seep through and freeze, creating larger cracks. Invest a little time now to fill in the cracks to avoid falls or more high-priced repairs later on. Not only that, clearing your sidewalks and driveways regularly throughout fall will help prevent a nasty slip.

Chimneys and Fireplaces

Although most of today’s homes are equipped with gas or electric fireplaces, there are still many Lower Mainland homes with wood-burning ones. A chimney is essentially an exhaust pipe, which funnels away soot, smoke, gases, hot ashes and sparks. A fall sweep should be an essential part of your yearly home maintenance.

If you have a gas-burning fireplace, when was the last time the flue was swept? Has it been tested to ensure that no cracks or faults have occurred? Are dangerous gases escaping? Experts suggest your chimney should be swept once a year, or if it’s used daily, then twice a year.

Roof

If you want to extend the life of your roof one of the easiest and most important things you can do is regularly inspect it. When examining your roof you want to pay close attention to any leaves or other debris. The problem with leaves and debris collecting on your roof is they start to gather water or moisture which will begin to break down the shingles. Debris can also collect in valleys which will eventually prevent the proper flow of water away from your roof and into your roof gutters.

Power 

During the colder, wetter months of the year, weather causes the most power outages in BC. From mid-November to mid-February, storms hit BC more frequently.

  • More than half of all electricity outages in BC are caused by trees.
  • In addition to causing power outages, trees too close to power lines create safety hazards such as a risk of fire.
  • BC Hydro reminds customers to never approach a downed power line. If you see one, call BC Hydro immediately at 1.888.POWERON.

Taking some time for those important outdoor fall jobs will not only save you money but potential accidents, but will allow you to rest easier at night knowing your family is safe.

 

Because YOU Deserve the Best ...

 

 

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