# Any advice for one looking at buying a home in Calgary?



## bobsyouruncle (Dec 25, 2016)

I'm not desperate to buy a house unless it makes financial sense, by which I mean, it will be cheaper than renting (not viewing as investment). However, if I can save my monthly outgoings by buying, and allowing me to save more to invest, I would be interested.

Currently paying $1400/month for rent. I pay all utilities on top of that.

*Assumptions:*
Mortgage: 3%
Downpayment: 20%
Home value increase: 2%
Property taxes: $2.5k
Maintenance: $5k/year
Stay a minimum of 10 years
Closing and selling costs: $30k​
Correct me if I'm wrong (math isn't a great skill of mine), but by my calculations, (20% downpayment vs 6% return on that downpayment) the house would need to be under $320k to make sense (if not considered an investment).

Now as I look at Realtor.ca, there isn't much in Calgary for this price. I'd consider a decent semi-detached home, but would prefer a detached property. I need a either 4 bedrooms, or 3 bedrooms and a basement.

Does anyone know much about the market in Calgary? How much are people moving on list price? What about new builds in places like Airdrie? Are they selling for list, or below?

Any advice here would be appreciated, whether you know the Calgary market or just the Canadian market in general. I'm not a native Canadian, so determining prices and the market in a place where you haven't much personal history is more difficult. 

If you think I should just continue renting, let me know as well. I'm quite content to do that, unless it makes sense to buy.

Thanks! Really appreciating the wisdom here and learning a lot, and hoping I can be helpful in return, too.


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## Just a Guy (Mar 27, 2012)

Calgary is in the midst of a huge downturn. Value has dropped like a stone, and the economy shows no signs of a turnaround anytime soon. I imagine the new carbon tax won't help jumpstart the oil industry. 

Many people seem to be having a lot of trouble making ends meet so, as opposed to 2% growth, I'd expect a large growth in the number of foreclosures. 

If something happened to turn the oil industry around, it might signal a bottom in the Calgary real estate market, until then I'd wait until you find something you want at your price.

Prices have nothing working to drive them up and a lot of factors to drive them down. 

Time will be your friend in this market.


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## bobsyouruncle (Dec 25, 2016)

Just a Guy said:


> Calgary is in the midst of a huge downturn. Value has dropped like a stone, and the economy shows no signs of a turnaround anytime soon. I imagine the new carbon tax won't help jumpstart the oil industry.
> 
> Many people seem to be having a lot of trouble making ends meet so, as opposed to 2% growth, I'd expect a large growth in the number of foreclosures.
> 
> ...


Yes, it seems that more are leaving Calgary than coming in, which should work in my favour.

I can see rent prices dropping, but house prices not so much.

Have you any tips for getting a bargain? Are foreclosures where the deals are? If so, is there a website that lists them?


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## Just a Guy (Mar 27, 2012)

He high end of the market >$1M have taken about a 25% correction according to appraisers I've talked to.

The main way to find bargains is to find someone who needs to sell when no one is buying. There are many causes for this death, divorce, foreclosure, relocation (in the old days companies used to absorb the loss as part of the moving expense). 

December is an excellent month to buy, hardly anyone looking, banks want things off their books for the year end, people need money for the holidays...

You should start seeing foreclosures enter the market this year. It takes a while for them to trickle through the system and get on he market...people lose their job, make some payments, fall behind, renegotiate, give up, move, court proceedings and paperwork, then goes to bank lawyers, realtors and gets on the market. It doesn't usually happen overnight, especially as people really don't like losing their house.

If you want a truck, I hear the airports in Alberta have thousands of abandoned ones in long term parking that are just now getting repossessed.

That being said, You can walk away from your house in Alberta with only a credit history hit.

I wouldn't buy yet, but it's definitely a market that's on my radar.


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## bobsyouruncle (Dec 25, 2016)

Just a Guy said:


> He high end of the market >$1M have taken about a 25% correction according to appraisers I've talked to.
> 
> The main way to find bargains is to find someone who needs to sell when no one is buying. There are many causes for this death, divorce, foreclosure, relocation (in the old days companies used to absorb the loss as part of the moving expense).
> 
> ...


Good advice. A couple of questions in response.

1. Can you negotiate the price of a foreclosure, or do they always look for the listed price?

2. How do I get one of those trucks?? lol


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## Just a Guy (Mar 27, 2012)

1) everything is negotiable...some banks drop their price, some don't. I think the offers are presented to the bank's lawyer in a big stack. It's not worth their time in a lot of cases to drag it out (plus their "losses" could be covered by CMHC). 

Of course, other people may bid against you, but price isn't always the determining factor...unconditional offer may be worth more than a couple grand to get it off the table. 

2) I imagine they go to auction.


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## bobsyouruncle (Dec 25, 2016)

_Honey, you how we might buy a house in future? I thought we'd be prepared and buy this F350 to help us move..._


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## Just a Guy (Mar 27, 2012)

Just saw this article...

http://www.cbc.ca/news/canada/calgary/condo-market-real-estate-calgary-1.3935881

Wonder how long the people can afford to hold onto these before they come down in price.


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## bobsyouruncle (Dec 25, 2016)

Just a Guy said:


> Just saw this article...
> 
> http://www.cbc.ca/news/canada/calgary/condo-market-real-estate-calgary-1.3935881
> 
> Wonder how long the people can afford to hold onto these before they come down in price.


People are stubborn. 

There's certainly more movement in mid-range house prices, but even the foreclosure prices in the sub $400k area are not lowered by much.


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## Just a Guy (Mar 27, 2012)

True, that's why I said it's on my radar, not that I'm purchasing. Time is your friend.


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## bobsyouruncle (Dec 25, 2016)

Just a Guy said:


> True, that's why I said it's on my radar, not that I'm purchasing. Time is your friend.


Interesting article: http://www.justinhavre.com/blog/can...t-as-lucrative-as-foreclosures-in-the-us.html

I wasn't aware that, _"under the Canadian Securities Act, a bank is mandated to achieve FAIR MARKET VALUE for the property."_

It looks like 10% flexibility in the asking price is acceptable. So if you found a foreclosure you like, knocking 10% off the market price as your offer seems a sound approach. 

Or is there more flexibility than that?

Also, can you not get a survey done on the property before buying? Is that correct? Is that what they mean by "as is"?


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## Just a Guy (Mar 27, 2012)

As is just means they don't guarantee anything. The appliances may not work, the windows may be broken, there may be asbestos, mold, lead paint, ufi insulation, holes in the wall, whatever.

I've never seen any real issues with an as-is place, it's more a "cover your butt" clause. It doesn't mean there is a problem, but if there is they don't care and it's your responsibility.

Fair market price is the price the market is willing to pay. It has nothing to do with the listing price. It means they can't sell it to a buddy on the side cheaply. 

If it's listed on Mel's and sells for 50% of the initial listing price because it sat for a year, then that is fair market price. I've seen foreclosure listings expire on MLS all the time because no one thinks the property is worth the asking price. "Foreclosure" doesn't mean deal, especially in this market.


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## Nelley (Aug 14, 2016)

bobsyouruncle said:


> Interesting article: http://www.justinhavre.com/blog/can...t-as-lucrative-as-foreclosures-in-the-us.html
> 
> I wasn't aware that, _"under the Canadian Securities Act, a bank is mandated to achieve FAIR MARKET VALUE for the property."_
> 
> ...


You should never be afraid to submit a low offer on any piece of real estate-but especially if you are buying it mainly because of the price/numbers. There will always be another property.


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## Mukhang pera (Feb 26, 2016)

bobsyouruncle said:


> Interesting article: http://www.justinhavre.com/blog/can...t-as-lucrative-as-foreclosures-in-the-us.html
> 
> I wasn't aware that, _"under the Canadian Securities Act, a bank is mandated to achieve FAIR MARKET VALUE for the property."_
> 
> ...


Me too! I was unaware of the "Canadian Securities Act" provision mentioned. I guess JAG is right. I need to spend some time with lawyers to _begin_ to understand even the most basic principles of the laws of this country. My legal education has been woefully deficient.

Notwithstanding, silly me, I just now emailed Justin Havre, confessing my lack of perspicacity thus:

"Having practised law in BC, I understood securities regulation to be a provincial matter under the Constitution Act, 1967 and I was unaware of a Canadian Securities Act. I failed in my efforts to find it online. I would ask that you please provide me with a link to the statute and perhaps you can cite the section number of the Act and the exact language setting out the bank responsibility you mention."

I'm all atwitter awaiting Justin's (or his delegated minion's) response, which I'll share here in due course.

As for the survey, you can always ask permission for a surveyor to enter upon the lands and conduct a survey. In any event, you can make any offer conditional upon receipt of a satisfactory survey certificate.


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## Just a Guy (Mar 27, 2012)

With a foreclosure he bank probably won't pay for the survey, however they won't prevent you from getting one at your own expense. Of course, if there are two offers, one with a condition, one without, the bank will probably favour the one without even if the one with is slightly higher.

Not always of course, I once lost out to a conditional bid which was $500 higher than mine, but I think I win more often than not.


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## Just a Guy (Mar 27, 2012)

I've heard about "fair market value" forever. He may have misquoted the legislation...I found this which seems to outline it...

https://www.fin.gc.ca/drleg-apl/ita-lrir-n-eng.pdf

I can tell you the majority of foreclosures are not deal. While I have purchased foreclosures in the past, I've also had about equal success from estate sales, divorces, moves, etc.


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## gladaki (Feb 23, 2014)

My real estate showed me one of the Foreclosure last week. I think it was listed for 630k and was in market for 60 days. It will come down another 30k in a month if it didnt sell. I think drill for making quote for foreclosure is 1)Get the prices of houses sold recently from the area 2)It should be already listed for 15% or less. 3)Make an offer what you think make sense

Correct me if I am wrong


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## gladaki (Feb 23, 2014)

Just a Guy said:


> I've heard about "fair market value" forever. He may have misquoted the legislation...I found this which seems to outline it...
> 
> https://www.fin.gc.ca/drleg-apl/ita-lrir-n-eng.pdf
> 
> I can tell you the majority of foreclosures are not deal. While I have purchased foreclosures in the past, I've also had about equal success from estate sales, divorces, moves, etc.


What do you mean by foreclosures are not a deal


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## gladaki (Feb 23, 2014)

Just a Guy said:


> Calgary is in the midst of a huge downturn. Value has dropped like a stone, and the economy shows no signs of a turnaround anytime soon. I imagine the new carbon tax won't help jumpstart the oil industry.
> 
> Many people seem to be having a lot of trouble making ends meet so, as opposed to 2% growth, I'd expect a large growth in the number of foreclosures.
> 
> ...


To be frank, no body knows where market will go. Recently people are started getting back to Jobs. Oil companies have increased the capex based on that we have a bottom but I cant predict anything. If market even goes up by 2% then you loose 10k on 500k house. Calgary sales have been up in last 2 -3 month because people dont want to miss the low prices since oil is going up. I think, I will buy a house when I have enough money in account and right house


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## gladaki (Feb 23, 2014)

bobsyouruncle said:


> I'm not desperate to buy a house unless it makes financial sense, by which I mean, it will be cheaper than renting (not viewing as investment). However, if I can save my monthly outgoings by buying, and allowing me to save more to invest, I would be interested.
> 
> Currently paying $1400/month for rent. I pay all utilities on top of that.
> 
> ...


Renting vs buying is a debate. I think renting is always better than Buying,

But, it all depend on your scenario. If you are single or married, planning to have childrens or not...and other factors...


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## bobsyouruncle (Dec 25, 2016)

gladaki said:


> To be frank, no body knows where market will go.


Correct. 

I'm not going to attempt to time the market in Calgary. I will buy when I find something suitable that will cost me approximately the same as my current rent or less. So I have $1400/month. to play with. That way it is less likely to negatively affect my savings and retirement plans, except that I'll lose 50k or so that could be working for me in a non-reg account.

Excel Homes seem to be building some duplexs in Airdrie for low 300s which might work for us.

Speaking of which...on new builds, is it always best to avoid every upgrade? Or do some upgrades make financial sense on a new home?


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## sags (May 15, 2010)

Information on foreclosures on CMHC insured homes, which are the most likely homes to be involved in foreclosures.

http://www.greaterfool.ca/2014/06/30/mortgage-prison/

A couple of years ago, the CMHC ordered realtors not to list CMHC insured homes as repossessed homes.

I don't know if that rule still exists today. It would make it challenging to ferret out repossessions.

https://www.cmhc-schl.gc.ca/en/corp/nero/2013-02-27.cfm?WT.mc_id=TWT2013_53

If a CMHC home sells for less than the insured value paid by CMHC to the bank, the CMHC seeks reimbursement of the shortfall from the original debtor. Gail Van-Oxade wrote an summary of the process :

_Course that doesn’t mean CMHC won’t come after you for any difference between what a property had to be sold for and what the insurance coverage was originally. Here’s how the process works:

Once your mortgage has been in default for 3 months, legal proceedings are started through power of sale and the bank takes possession of your property.

The bank sells the property and submits a claim to CMHC for any shortfall.

CMHC gets a judgment against you as the defaulted mortgagor for this shortfall and CMHC tries to collect.

If this attempt is unsuccessful, the account is forwarded to one of CMHC’s collection agencies.
_
http://gailvazoxlade.com/blog/archives/5835

The "fair market value" concept likely derives from the CMHC avoiding a legal battle over their mitigation of the debt on behalf of the debtor.

Interesting that according to Garth Turner (in 2014 at least) Saskatchewan is the only province with non-recourse debt.

Apparently, CMHC insured homes are considered recourse debt in Alberta.


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## gladaki (Feb 23, 2014)

bobsyouruncle said:


> Correct.
> 
> I'm not going to attempt to time the market in Calgary. I will buy when I find something suitable that will cost me approximately the same as my current rent or less. So I have $1400/month. to play with. That way it is less likely to negatively affect my savings and retirement plans, except that I'll lose 50k or so that could be working for me in a non-reg account.
> 
> ...


You wont able to negotiate the house price on new houses, they may throw in 8 to 10k for upgrades. I have been told even for buying new houses it good to take real estate agent they can help in somethings. If you want to negotiate old houses are way to go


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## Just a Guy (Mar 27, 2012)

You can negotiate prices on every home, new builds included. New builds are more likely to throw in "upgrades" instead of cutting prices, but it all depends on the market. If the developer is hurting for money, and desperate to sell, they'll negotiate, if it's a hot market, they probably won't, since they can sell it to someone else.

As for why foreclosures "aren't always a good deal". The way it works in Canada is the bank is required to get two appraisals done on the property before listing it and that sets the initial price. Often foreclosures are listed exactly the same as every other property around them. The bank is obligated to try for "fair market value", so they aren't going to jump at every low ball offer that comes in just to get it off the books.

Heck, I've been to court ordered sales where the judge refused all the offers that were submitted and ordered the property to be relisted, even though the property had been listed a long time and had multiple offers from different people.

As for predicting the future, you're correct, no one can do it. That being said if you see someone driving full speed towards a cliff, there comes a certain point where you've got a pretty good idea of what's going to happen if you understand physics. That's not to say some miracle won't happen, or that you made the determination before the "point of no return" and they are able to make a change, but that also doesn't mean the likelihood of what you are saying is impossible. 

Until interest rates start to rise, most markets have a good chance of recovery. In my opinion the low interest rates allow people to overpay. That being said, let's see the effects of the carbon tax on Alberta first, not to mention Justin's comments about "phasing out the oil sands" and finding out what he meant by that before we say everything is just fine in Calgary. 

In any falling market you always get tiny plateaus where people buy in to get the deals...it doesn't mean they are right, it's just reached the point where they think the prices are a deal. Most of the buyers tend to be fairly uneducated and are just going with their gut. Look at the fall of famous stocks like Nortel, breX, worldcom, Enron, etc. Many people bought in all the way down...it didn't change the fact that the market for them was still going down.

As for not telling on the listing that it's a foreclosure, that was a stupid idea since they are usually the only listings which are sold "as-is, where-is" and have a schedule A to fill out. They've probably dropped that "requirement" fairly quick as I've never seen it initiated...but there weren't a lot of foreclosures back then either.

Final note, Saskatchewan isn't the only none-recourse province, Alberta also is non recourse. There were lots of articles about jingle mail from Calgary last year.


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## sags (May 15, 2010)

Alberta is a non recourse mortgage Province, except for CMHC insured mortgages.

People can walk away, but CMHC will sue them to recover their losses.

http://www.cbc.ca/news/canada/calgary/jingle-mail-alberta-housing-1.3430867

The best deals I have seen on a home, and a lot of other things like furniture, cars etc.........are estate sales.

If the home is mortgage free and the beneficiaries want to acquire their money, good deals can be struck.


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## ian (Jun 18, 2016)

We have been renting for three years after downsizing and selling our home. We are leaving for a few months but the plan is to start looking for something to buy when we return.

We have been watching the market. These are our observations for what it is worth. Condos are definately down. Single family homes under 450K are down a little depending on area. We have seen some attached villas in the 550K-700K range that have been on the market for two years. Listed and re-listed. Several have been empty for some time.

I think one issue is that some sellers have a false sense of the market. Don't bother with them, you will waste your time. Move on to someone who has priced their home competitively to market and then do your deal. Don't be misled by the real estate boards DOM stat on a property. We know several that are showing 60-70 days. That simply means that the listing expired for a day and the property re-listed.

Eighteen months ago friends put a low ball offer in on a foreclosure in Cochrane, a town just outside Calgary. The offer was rejected by the bank. That home was still on the market a few months ago but was currently listed for the same amount our friends offered. Foreclosure does not in any way indicate a better price. Indeed, depending on the previous owners or tenants, it could indicate a distressed property whose upgrade costs will exceed any imaginary savings from the foreclosure purchase. 

We purchased a home in Vancouver Lower Mainland in mid 80's just prior to it going into foerclosure. The price was right but we were well aware of the monies that would be required to bring it up to grade. It was not a economic downturn. Rather an alderman/notary who had difficulty distinguishing between trust funds and personal monies. I believe he was given some time in an institution to discern the difference


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## short stocks (Jan 17, 2017)

This is spendlessearnmore. Can't seem to login and seems they changed password to at least 10 characters now. 

Anyways I have a house in Calgary (near Marlborough Mall) I'd like to sell between July to September this year otherwise I'll keep it. Love the area and could see settling my family there but I'd be willing to sell it for $250k (I had previous offers for $260k) without agents involved. Just lawyers and of course home inspectors. The house is 2 storey, 3 bedroom upstairs, basement has 1 bedroom and 1 exercise room, townhouse style with no condo fees, 1600 square feet and property tax about $1400/year.

I have friends looking after the house that I don't charge rent for and they strongly want to buy the house though are borderline getting mortgage for it. They have first priority though unless someone pays more than $250k. (is that bad of me?)

If you're interested send me a private message for the address and you can decide if it is right for you or not.


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## Numbersman61 (Jan 26, 2015)

short stocks said:


> This is spendlessearnmore. Can't seem to login and seems they changed password to at least 10 characters now.
> 
> Anyways I have a house in Calgary (near Marlborough Mall) I'd like to sell between July to September this year otherwise I'll keep it. Love the area and could see settling my family there but I'd be willing to sell it for $250k (I had previous offers for $260k) without agents involved. Just lawyers and of course home inspectors. The house is 2 storey, 3 bedroom upstairs, basement has 1 bedroom and 1 exercise room, townhouse style with no condo fees, 1600 square feet and property tax about $1400/year.
> 
> ...


All I have to is that the area is not very desirable.


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## bobsyouruncle (Dec 25, 2016)

gladaki said:


> You wont able to negotiate the house price on new houses, they may throw in 8 to 10k for upgrades. I have been told even for buying new houses it good to take real estate agent they can help in somethings. If you want to negotiate old houses are way to go


I wouldn't have been thinking about a new build, but I saw a 3 bed duplex with attached garage and walkout basement for around $335k, and that seems reasonable. 

I think I'd rather be in Calgary than up in Airdrie, though.


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