The hidden costs in buying a home

So you have your 5% down and you are ready to start looking for a home.

If only it was that simple.

Let’s use $300,000 as the cost of the hypothetical house you are going to buy — which is the average cost of a home in Winnipeg. If you move just outside the city you can get a lot more for your dollar, but that’s for another post.

So, say you find a home and you have your $15,000 down payment. You would think that your mortgage would go down to $285,000, right?

Nope.

With 5% down on a $300,000 home your mortgage only goes down to $296, 400.

Umm only $3,600? Where did my other $11,400 go?

CMHC

That’s your mortgage insurance that you need to pay unless you have 20% down.

Ok, so whatever, I have to make a few extra payments. I can live with that.

But wait!

Lawyer fees

Did you know you need a lawyer to do your paperwork and do lawyer things so you can own your home?

That costs about $1,000.

Land transfer tax

Then your lawyer is going to tell you that you need to pay a land transfer tax, which is about $3,720 for a $300,000 home in Winnipeg.

Already you are at:

$15,000 +

$1,000 +

$3,720 =

$19,720

And you only have taken $3,600 off of your mortgage, and you have no furniture, or kitchen utensils and you have to use cardboard boxes as your plate, chair, table and bed.

(We are assuming a 5-year fixed mortgage rate with a 25-year amortization period here. If you don’t know what that means then I will cover it in the next few blog posts — stay tuned!)

And you think this sucks? There are costs to owning a home that you don’t even realize are a thing.

These costs vary depending on the area of live in, what temperature you like your home, how efficient your windows and heating system are, and how much water you use etc..

But be prepared to pay house insurance (different than mortgage insurance), property taxes, hydro and water bills. Along with your normal grocery bills, cell phone bill, car insurance, Netflix, and whatever other bills you pay.

There is an incredible site called ratehub where you can type in the asking price of a home and select your bank, down payment, amortization period and all that stuff and it will tell you how much your mortgage will be, your land transfer tax, your mortgage payments and all that fun stuff. I highly suggest you check it out if you are thinking about buying a home.

Don’t let all of this scare you. Buying a home is a great investment for your future, but it’s a big commitment. When you are ready, call someone you trust to help walk you through it.

 

Daily Rotation: Songs for the Soul

Part of the reason I started a blog is to let people like you, reading this post, get to know me.

It’s no secret that realtors work on commission, so with that comes the perception that we will do anything to make a sale — even if it’s not in your best interest. Buying or selling a home can be difficult, and you want to choose someone to help you that you trust. Through a blog, I can give you a little glimpse into my life and share with you some tips I have learned throughout my career to help homebuyers and homeowners. It’s a small thing, but I hope to build just a little bit of trust with you this way — remember, realtors also work through referrals, so I want to give you the best service I possibly can. That way I can help support my super-sassy, strong and independent almost-three-year-old and my so-super-close-to-graduated partner.

My absolute favourite pass time is music. Listening, playing or attending live shows — I love it! Each month I make a playlist called the Daily Rotation. The purpose of this playlist is to try and find the “perfect song.” I know it’s extremely subjective and seems a bit ridiculous, but trying to do the impossible is half the fun — and worst-case scenario, I get to find some pretty talented artists along the way!

Maddie and Daddy

Eating a shark

Leash and Maddie

This is us last weekend at a live show at The Forks. Okay Mann was incredible. (Photos by the talented Nate Forest.)

So, each month I will post about one song that was one of my favs and let you know why.

This week’s selection:

Sanctify by St. Paul & The Broken Bones.

I love these guys! Think of them as having the energy of Sam & Dave meets the soothing side of Otis Redding — pure soul. And when it comes to soul music, let’s face it, those horns get me every time.

Cue up those horns, at (1:47), and drop me into complete utter bliss with this nothing short of perfect course.

[Chorus:]

Is that river wide, is that river deep?

Let me sanctify, let me sanctify you, baby

Sit back, relax and enjoy this incredible ballad.

The Daily Rotation: February 2017

I love finding new music. If you have something you want to share, comment below, or even send me a direct message. I would love to hear from you!

9 Ways To Prepare Your Home For Spring

Spring is just around the corner, or so I thought.

Winnipeg weather is so unpredictable, so that’s why important to prepare your house for spring when it suddenly hits us.

1. Fix the Cracks, Urgh!

Cracks are the secret passage that water takes to get into your house and cause havoc. Fill the cracks in your foundation, walkway, and patio right away before it gets into your house and costs your big bucks.

If you are doing major renovations outside, make sure your patios or walkways are sloping away from your house. Bye, water!

2. Check the Air Conditioning

You know that time of year where you blast your car heat in the morning and turn on the A/C on the way home? That time is approaching, which means that the time to turn on the air conditioning in your house is coming too.

If you have a professional come inspect your air conditioning inspected before you turn it on could prolong the life of it — also, it’s a safety precaution.

3. Replace Damaged Outdoor Lights and Pipes

The barbecue or hot tub: If you didn’t use these things over winter then MAKE SURE you check them before turning them on. Check those lights, plugs and faucets to make sure they still work before you need them and they don’t work!

4. Inspect your gutters

I recently sold my house and didn’t realize the one of the downspouts had fallen off the house. Whoops. Ice build-up can cause serious damage so make sure they aren’t clogged and are pushing water away from your house!

5. Look at your roof

This is an expense that nobody wants to pay for, but a damaged roof and shingles can let water enter your home. If water gets in and freezes it can damage the wood. If it doesn’t freeze, it can cause mold, which is not safe to breathe. When your shingles are damaged your energy bills will be higher because they aren’t doing its job keeping the elements out. Plus, a bad roof looks terrible on your home.

6. Repair your Windows

Almost as bad as the cracks, but if you don’t make sure your windows are properly sealed then water and bugs can get into your house! This is another one that could save you big on your energy bills. Make sure to check that the wood around your windows isn’t rotting.

7. Move the Wood

Did you know that wood piles should be stored 18” off the ground and at least two feet away from your home. Soggy wood is a cozy home for bugs. Yikes!

8. Clean or Replace your Furnace Air Filter

This is one that people forget about. The rule of thumb is to replace your filter every three months, but if you have pets, smoke or have done renovations in your home you should replace it more frequently.

9. Clean!

Spring is the perfect time to clean out your basement, garage, closet, or wherever you could use more space. Donate your goods to a local charity, have a garage sale, or part with items you know your friends would like, but you don’t use anymore.

If you have any questions about who to call to get your air conditioner inspected or fill the cracks in your foundation, I have a few people I trust to do a good job. Feel free to give me a call, text or email at scott.kurz@prestonmyre.com

Buy your home before these 2 dates

As a realtor, I would never tell you to rush your home purchase. As a friend, I’m telling you to get your butt in gear and start looking.

As of March 17, as in 10 days from now, CMHC (Canada Mortgage and Housing Corporation) is increasing their mortgage insurance premiums.

The average cost of a detached house last year was $300,000, according to the Winnipeg Realtor’s Association. If you were to buy a house for that price after March 17, you are adding an extra $1,500 to your mortgage. That’s about $5 per monthly mortgage payment.

The good news is that your closing date can be after March 17, 2017, but you have to get your applications submitted to CMHC before that date to avoid the increase.

And on top of that, May 1, 2017 the dreaded growth fees come into affect. These growth fees, or impact fees, add about $500 per 100 square feet in some new residential areas.

That’s an added cost of $9000 to a 1,800 square foot new home! For those of you sitting on the fence about buying new, now is the time to act.

If you get your building permits in before the deadline you have a six-month grace period to avoid the fee. That gives you just under two-months to find the perfect new home and start the process. Just be aware that building new can be a long process. I have attached an infographic below to help explain the steps.

But, I have a theory.

These new fees are going to add an average cost of $10,000 dollars onto new home builds, and that might be enough to dissuade people from buying new homes.

If that’s the case, then more people will be looking into the resale market. I’m no economist, but I do know a little about supply and demand.

With a higher demand for resale homes and the supply staying the same, the prices in the resale market would be pushed higher.

Just something to think about!

You might be asking who I am and why you should trust me. I’m Scott Kurz and I have been selling homes for many years now. I am always learning new things, and I want to share those things with you. An informed homebuyer is a happy homeowner, and I want to help you along the way.

I’ll tell you a little more about me in my next couple of blog posts, but I felt I had to share this information now, since it’s a time sensitive matter.

If you have a question you want answered about real estate comment below and I will do my best to answer it.

Happy house hunting!