I have seen some financial advice along the lines of “wait a long time for big purchases.” I get the concept of this advice but it is more to do with impulse spending. If you are prone to spending on a whim or tend to make a lot of unbudgeted purchases, wait to spend money. This goes for purchases that are big or small. Today marks 5 years that we got the keys to our house and it was the biggest financial decision of our life. I could also say that it was one of the fastest as well. If I think about advice to wait a year on a big purchase I know that for our home it doesn’t make sense. In honour of 5 years in the house I thought it would be interesting to share how we went against that advice and made the biggest purchase in our lives in 4 hours.
Scott and I got engaged in the summer of 2010 and were married in fall of 2011. We did not live together before we got married and in the fall of 2010 we started looking for a house. We live in the Toronto area and while housing was expensive then for first time home buyers it was not 2016-2017 Toronto expensive. Our budget was $350K and about 45 minutes north of the city we could have gotten a detached house.
At first we looked at re-sale houses and a lot of them. I would say a conservative estimate was about 25 houses. Nothing was ever right with them. There was always something that disqualified it from putting an offer down. We also were looking in the middle of a tough winter and the commute to look at houses after work was wearing on us. My experience it is a much better idea to look for houses after work to really understand what you daily commute will look like. It was an eye opener for us and made us re-think the original area that we were looking.
We decided that we would move our search west and south and only be about 30 minutes north of the city. This resulted in that same $350K budget being able to produce a very small and in need of work townhouse. At that point we increased our budget to $400K and started looking. We went to house after house and there was nothing that was right. Between the 2 main areas we looked we probably looked at 40 houses. Again not a single offer on them because there was always something wrong.
One of the biggest pieces of advice we got at the time was that because this was our first house it wasn’t going to be perfect. There were going to be some compromises that we had to make. I agree that is true but I don’t believe that you have to get a house that has something you don’t want. This is a huge financial decision and you shouldn’t settle for something that you dislike just to buy a house.
At this point it was late March and with a wedding in 5 months and no house we started feeling really defeated. After I felt we had exhausted the resale housing market we started looking to see if there were any new builds in the area for sale. Most of my family’s experience with housing was new homes so this was right up everyone’s alley. We signed up for all of the builders e-mail lists and waited for word that they were building houses in our price range in the area we wanted. Early April we got an e-mail that 2 different builders were releasing floor plans on the same day. They were worth checking out. Side note I LOVE looking at floor plans. I looked at them a ton when I was a kid when we got the Saturday newspaper. I knew what to look for and I can envision how something is going to look from the floor plan. It’s a very interesting skill.
We had coffee and strategized at Starbucks that morning and headed off to 2 different sales offices around the corner from each other. Luckily the weather was great because we had to wait in a line outside for about an hour for the sales office to open. Our plan was simple, get a look at the floor plans and prices and then contact that other person if there was something interesting. Since we had seen so so so so many houses we knew what we were looking for.
Sales offices open and we were able to go in to see the floor plans around 9:30am or so (we weren’t the first in line). When I finally did get to talk to someone and found the prices we narrowed them down to townhouses which were starting from $425K. I knew right away that there was a floor plan that was perfect. It had 3 bedrooms, the kitchen in the back, access from the garage to the backyard and even a fireplace. It had good bones. I knew right then we were going to buy that house but it was about $30K over our budget.
I called Scott and told him I found something, also asking how he made out. He struck out mainly because the townhouses at that sales office did not have access to the backyard. So you either keep stuff in your postage stamp of a backyard or carry it through the house. No thank you. He came over to pick me up and we looked at the floor plan I saw. Knowing how fast houses moved we knew we didn’t have a lot of time to debate this. We both thought this was a good idea and we quickly went to my parent’s house to talk it over and show them the floor plan.
We arrived at my parent’s house and began talking about the house. Our biggest concern was that it was over budget. Purchasing housing can become very emotional if you become attached to the place and we wanted to strip out the emotion and talk to people who would give it to us straight. They came to see a couple of houses that we looked at when we were looking at re-sale and agreed that it had one of the better floor plans we had seen. After talking about all of the pros and cons with them we made the decision to buy the house. Even though we knew in our gut driving over there were going to drive back to the sales office to buy the house we just wanted to make sure we got another set of eyes on this decision to make sure we were not jumping the gun.
We drive back to the sales office preparing to wait in line again however there was no line up to be found. We crossed our fingers that the floor plan we wanted was still available. It was and we proudly told them we wanted to buy a house. We signed the paper work, wrote out 4 cheques and went out for a celebratory lunch to make sure the math worked with the deposits and our upcoming wedding expenses.
Couple of things to note:
- We did not work with a realtor. It is not typical to work with a real estate agent when buying a new home in our area. In a seller’s market you are likely not able to get more than what the builder is willing to offer.
- We didn’t need to get approved for the mortgage until much closer to the date of the closing. We did our research and went with a bank that had the best rate and with a mortgage specialist who actually wants us to pay off our mortgage. When we recently went to put a lump sum onto our mortgage she was talking to us about when we were going to increase our payments to pay the mortgage off sooner. Working with her is the best and she is definitely not the typical taking all of your money and be in debt forever mortgage specialist.
- We lived and breathed houses for 5 months. Open houses on Saturday and Sunday were our jam. We looked online and at houses so we saw what worked and what didn’t. We are handy and know people in the industry who could give us advice on new home purchases. I know this was a unique situation that allowed us to buy this house in record time. Between understanding floor plans, knowing what we want and having the budget conversation we were able to make a move very quickly. This might not ever happen again for us. But we knew what we wanted it worked out for us. Waiting a year to decide to buy a house would have meant we would have needed to spend $100K more for the exact same house. Sometimes you need to trust your gut.
We have been in the house for 5 years and we love it here. Not only do we love the area but we love the house that we have turned into a warm home. With no plans to leave and a house we can still grow into we are happy with our purchase. It worked out for us and going back we would make the purchase all over again.
What was the fastest financial decision you made? Do you regret it or did it work out?