# Buying a house: am I being unreasonable?



## nahc (Feb 22, 2011)

My fellow CMFers,

Long time lurker, but now I would like to solicit advice on what would be the biggest purchase (ever!) of my life: buying a house.

This is a point of great contention between me and my husband. Basically I want to wait a few years (and continue renting) and he wants to buy a place immediately.

First some background. My family of four (me, husband, 2 kids < 4 years) + nanny/housekeeper, moved to Calgary approximately 2 years ago. We are happy in the city; our jobs (or, at least mine) are rock solid; we like the people. I don't see us going anywhere for the next 35 years. Financially, we are on pretty solid ground-- I make in the mid 6 figures, expected to top out in 5 or so years in the extremely low 7 figures. He makes low 6 figures (including a bonus), no idea when or where he might top out at. Our major expenses in life are 1. taxes, 2. the nanny/housekeeper, and 3. rent. We get by on my husband's income alone and save mine in a holding corporation. We don't have any expensive tastes or hobbies and drive such old, cheap cars that we don't mind (much) when our nanny keeps dinging them. My colleagues make fun of my car regularly. I laugh along; instead I take comfort in that we have a diversified portfolio that my husband manages, and we have a large inheritance to pass on to our kids. We may have one more kid at most.

I think we live pretty well (husband golfs), we eat out whenever we want (not often, but certainly more I did as a kid), vacation in nice places (we try to combine it with professional development so to expense it to my holding corp), and buy whatever we like at the grocery store without a mind to budget (I didn't grow up like this). My husband, on the other hands, thinks I'm too frugal (or just plain old cheap). Especially when it comes to buying a house.

I think that RE prices in Calgary are absurd and patiently waiting for it to settle down, hopefully in the next few years. I am also less willing to buy a huge place for lots of $$$, especially since I think RE in the future is a depreciating asset (especially the upkeep). I think a (more than) reasonable place would cost something like 600k-800k (max 1000k). I am, however, quite picky about location because of schooling (I went through the public school system and would like my kids to do the same, albeit at better public schools than I went to). If there are no available places, then I would continue to wait along until one comes up or when my eldest will begin gr 1, in about 2 years time. Until that time, I would like to continue renting our quite reasonable 3+1 bedroom, 2.5 bathroom place with a school catchment in my #2 ranked public elementary school.

My husband, however, has been hungry to buy since we got married 5 years ago. He wants to buy a HUGE place because he grew up in the countryside and is used to all the space, something like 3000sf total of living space or more, in the inner city, in one of these convenient locations where there are good public schools. Based on current real estate prices and the caliber of place he wants, we are looking at at least 1.5mil-- more likely more! He claims that he doesn't want to bring any friends home because he's ashamed of the place we're renting (what?) and wants a bigger backyard so my eldest can ride his training bike in. 

Do you guys and gals think I'm being unreasonable? Since he reads this forum more than I do, I was hoping you would convince him to hold off for a while longer. If you honestly think that I am being unreasonable, I want to hear that too.


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## stephenheath (Apr 3, 2009)

That's really tough because so much of a house purchase for living in is "what works for your family" and you're basically looking for top of the market (big house, big lot, downtown) which will probably always be expensive so may not decrease as much as the other houses. The only thing I'd say is if you're going to jump to a house like that, make sure you could live there for 35 years (ie, space for another kid, each kid having bedrooms as teenagers), because it might take longer to liquidate than other houses. And maybe think of it in terms of how long until it's paid off... if it's going to take you the full 25 years (I think they got rid of 30) in the best case scenario, might be too much. If you can make the same payments you're doing renting and have it paid off in 15 years... maybe not so bad... 

If you definately want to convince him not to buy, you could always use arguments from Garth Turner, at http://www.greaterfool.ca/ .


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## Spudd (Oct 11, 2011)

Well, if you currently make 500k/year and don't spend any of it, you'd have that 1.5 mil house paid off in 5 years (I stretched out the time because of income tax on the income). But, with such a huge house you will have a lot more upkeep and will likely want/need to hire a maid and landscapers. It will cost more in utilities, too. 

Can you compromise on something in a good school district that's a little smaller than what he wants, but still a "showcase" so he won't feel ashamed to bring his friends home? How about your current neighbourhood, are there more reasonably priced (but bigger than your current) houses there? 

I think the riding the bike in the back yard thing is a red herring. Firstly, you can always take the kid to the park to ride his bike, and 2nd, the kid will only be satisfied with riding in the back yard for a year or two, max, before he'll outgrow it.


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## MoneyGal (Apr 24, 2009)

You...want to air a fight between spouses on CMF? :02.47-tranquillity:

(You want "us" to convince your husband that he is wrong and you are "right"?)

More seriously, in my view this is not a financial issue. You have enough in earnings to make even a $2M house a very "reasonable" proposition...and if you wanted to amortize over the "standard" 25 years, you could buy something much more expensive than that, even. 

This is a values problem - you have different values. He wants to spend money in a way that you don't value. It could be an expensive piece of art, or a horse, or a very expensive trip, or round-the-clock nursing home care for an ailing parent - this is a conflict over who gets to prevail when one spouse says "no" to something the other spouse wants. 

My only advice would be to figure out if taking a gamble on being "right" about the "true" value of housing (surmising that the "true" value will be revealed through a decline that will happen sometime in the next few years) is more important to you than allowing your spouse to make a choice that will make him happy now. The "bike in the back yard" scenario isn't really about the bike in the back yard - it is about having his vision for his family fulfilled now. 

Would it help if I said the financial considerations for this purchase are trivial compared to the emotional ones? If what you've typed out is accurate, you can "afford" to buy now (even at RE highs, if they are in fact highs - people have been predicting peaks in TO and VAN for many years now), and you can "afford" the greater upkeep costs of a larger place.


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## Four Pillars (Apr 5, 2009)

Is PeterK in Calgary and single? I'm thinking perfect match here....


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## KrissyFair (Jul 8, 2013)

Let me start by saying that I'm pro-rent, generally speaking. But. When we lived in Calgary our 2-bed condo in Marda Loop ran us $1400/month in rent. So for a 4-bed I'm guessing you're well above $2000. That's how much equity you'd be building each month on a $1M mortgage even if you amortized over 25 years. And since you've said you don't touch your income then, ya you could amortize that in 5 years. To me that math works out in favour of buying.

But obviously, math is only half of it. The other half is what best meets your needs and I'm not sure anyone here can answer that for you. 

The answer is probably somewhere in the middle. It sounds like half the battle is getting a consensus on what kind and size of house to buy. So maybe you could meet in the middle - ie look, but for a smaller house than your husband is currently thinking. And if you looked somewhere like Garrison Woods/Altadore you'd get plenty of parks for the kidlets to ride their trikes in and you can still find a 4-bed for ~$1M.


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## peterk (May 16, 2010)

I can be on the corporate jet this afternoon and there before dinner!

Although my girlfriend drives a pretty sweet '05 Ford Escape that I mooch off of - soooo you're gonna have to beat that. :rolleyes2:


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## Sampson (Apr 3, 2009)

MGal is spot on. This is an issue of personal values, not money.

You could easily get a nice $1.5-$2M place in Rosedale, at least >2400 sqft new build, and have your kids access one of the best public schools in the province. That and pay off the mortgage (if you even need one) in 5 years.

The fact that you think the housing market will drop, and that you think housing is a depreciating asset, well rent a bigger, nicer place. Your husband will get the nicer house he craves, and you won't feel like you are locked into something that loses money (although I think housing is more a lifestyle choice than a financial one).


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## SpendLessEarnMore (Aug 7, 2013)

As someone that has bought 2 houses in Calgary in less than a year I don't think Calgary house prices are that expensive compared to Toronto or Vancouver. Calgary has already gone through a housing downturn in 2009 unlike most other cities that haven't and is still recovering from it. The houses hasn't appreciated out of control like Toronto and Vancouver has so I feel there's lots of room for Calgary houses to appreciate even more.

Your concern though isn't the house. I can tell you're a frugal type person by not splurging on a new car that would cost you the same as if I was to buy a diecast car model. Your husband is lucky to have married you. If you see the house as an asset that you can not only re-coup your money put into it but also make some extra out of it you might see purchasing a house not a bad idea afterall. Consider how much rent money you would have saved and put towards your portfolio.


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## m3s (Apr 3, 2010)

nahc said:


> My colleagues make fun of my car regularly. I laugh along; instead I take comfort in that we have a diversified portfolio that my husband manages, and we have a large inheritance to pass on to our kids.


I greatly admire those who live modestly in spite of having money to burn. That said if the idea is to pass on a "large inheritance" to the kids I think it's worth buying a house now (and I'm also a fan of renting) My thinking is by the time the kids (now < 4 years) receive this inheritance the RE market will most likely have settled and risen again. RE is probably fine in the long term. No need to run out and buy a huge mansion to raise some private-schooled brats either. Life is a compromise I guess. :encouragement:


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## andrewf (Mar 1, 2010)

From what I gather, Calgary's RE market is not unreasonably valued in terms of fundamentals (price/rent, price/income). Real estate is local, so you can't let the doom you hear from Vancouver/Victoria colour your perceptions of the local Calgary market.

If you buy a reasonably priced home (up to a million or so), I don't think paying 20% too much is going to have a material impact on your net worth in the long run.


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## Sampson (Apr 3, 2009)

andrewf said:


> From what I gather, Calgary's RE market is not unreasonably valued in terms of fundamentals (price/rent, price/income). Real estate is local, so you can't let the doom you hear from Vancouver/Victoria colour your perceptions of the local Calgary market.


While I don't dispute this, and I have strongly argued this point in the past, when jobs leave Calgary, they do so in droves. Thousands of people fired from the big companies at a single time. If the OPs jobs are stable, then this should not be a concern.


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## humble_pie (Jun 7, 2009)

i have to chuckle a wee bit. It's pretty clear who you are. No i won't let on.

what's great is to hear how you are all working so hard & doing so fabulous. Mille felicitations.

it's extremely difficult to have an opinion. Me i think there's much merit to your side, but the feather that pushes the weight on the fulcrum for me is the fact that your husband was raised on a big place in the country & wants to give his kids the same kind of experience as they grow up.

there's no way to quantify that precious experience. They're less likely to have it growing up in a 3+ bedroom city apartment, no matter how nice it is.

just think, you could have dogs, rabbits, a big mud room full of bicycles, a hobby shop, a home entertainment centre, your own swimming pool. Pools are great plus features when the kids become teens, with a pool they're more likely to have their friends over, less likely to roam around god knows where, possibly getting into trouble.

i like your values, the concentration upon quality of schools for the children is so familiar to me. With respect to your decision, $$ are not really an issue here, are they? i hope you'll go for the house. You won't be sorry.


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## atrp2biz (Sep 22, 2010)

Husband here. 

Money is obviously not an issue for us. We live relatively frugally. My only money suck is golf--and with a new born that is very limited. We drive crappy cars. We have a '98 Toyota Sienna and a '06 Hyundai Sonata. We both view vehicles as depreciating assets and will drive them until they die. I just hope they don't die on the Deerfoot. Yes, we eat out whenever we want, wherever we want. But we choose to dine at Ikea for their $1 breakfasts, do some shopping at Walmart/Costco and dine again at Costco for their $1.50 hot dogs.

My wife wants to buy a place in Scarboro. I'm more indifferent about the neighbourhood we decide to live in. We have looked at a number of houses in Scarboro which are less than 1400 sqft and are asking $850k+. The best public school in the city is located in the neighbourhood. With the two of us, kids, nanny, mother in law which lives with us for half the year and the fact I do a lot of work from home and she will have the ability to do more work from home--yes i would like to have about 2000-2500 sqft which will cost well over a million in that area. 

Can we afford it? Obviously. Do I want to live in a bigger place than we are renting right now. Yes! I'm typing in my living room and toys are stacked in front of the TV because there's no other place for it. Our stroller is also in the middle of the living room because there is no room to put it anywhere else.

In my view $600-800k is just not reasonable for the area we want to reside and live comfortably with 2-3 kids and 3-4 adults.

We are also buying for the long-term with no intention of moving. We moved here two years ago from Toronto, agreed to rent and are still renting. I guess the question for both of us is when do we buy. My view is that even if the market goes down 20% from the point we buy, will that make a difference 30 years from now? No.

PS: We're both taking this very light heartedly and are very interested in the thoughts of the forum.


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## humble_pie (Jun 7, 2009)

atrp2biz said:


> Husband here.


yea i knew each:

just getting space so the nanny has a chance at a private life of her own is reason enough to move.

buy the big house. As nice as you want.

we love meeting your wife.


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## SpendLessEarnMore (Aug 7, 2013)

I'm also from Toronto just moved to Calgary 3 years ago. What a difference a neighbourhood can make. I just bought a 1600 square foot house in Calgary for $191k. But yes I agree 1400 square foot is too small for your family size.

Houses may and it's just a may go down but in the long run house prices have always gone up. There have only really been 3 housing downturns in my recent memory. The most significant was early 90's in Toronto where if you bought a house at the peak and sold at the lowest average you would lose 29%. 

Off all the housing downturns the lows have always been above the price owning the house before and after the downturns.

Besides don't you want to customize the house to suit your taste and needs? If so owning a house is the right choice.


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## Potato (Apr 3, 2009)

I'm one of the larger housing bears here. Renting is likely the _financially optimal_ thing for you to do.

However, your situation is far from typical. The biggest reason I talk so much about housing is the risk that it presents to young families: sacrificing long-term savings to become house poor, and risking getting trapped underwater. Risk is not really a factor in your scenario: you're looking at houses at like 2X income. Even if there was a ~40% correction you wouldn't be stuck, and that rather bad scenario works out to like two years of _savings _for you. Your colleagues likely spend more than that on fancy cars. I'm not saying that just because your colleagues are frivolous and loose with their spending that you should be too, but you are in a situation where you can rationally discuss whether you'd like to risk/spend a few hundred thousand to own sooner. What might be skirting financial ruin for others is just a marital decision on how much to spend on a luxury item for you.

As for timing, well the spring market has passed. You could shop now through the fall, but the $1M cap on CMHC may help you out, so see what next spring brings.


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## donald (Apr 18, 2011)

You posted not long ago you passed the million dollar mark(liquid)
Early 30's
One spouse might top out @ a low 7 figure a year before 40
I think you should prob ''move" up
What's the use of being millionaires(very likely multi-millionaires in the coming decade) living like a couple of grad students?
Your portfolio's(which i'm guessing is close to the 600-800k range/same as the real-estate your looking @)prob has the same potential to drop 20% as calgary real-estate.(i don't know what your invested in but i'm guessing you have a lot of equities)
If anything and in your shoes i think it would be smart to diversify(you should be comfortably @ this stage to get exposure to residential RE,expand your assets)


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## james4beach (Nov 15, 2012)

What I desperately want to know is what industry or field of work you are all in. I want that kind of income, I'm young enough to change.

Midwifery?
Banksters?


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## peterk (May 16, 2010)

^^^ Indeed. It sure ain't engineering, like _this_ sucker.


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## Retired Peasant (Apr 22, 2013)

If you buy a house, just make sure it's not on the flood plain.


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## kcowan (Jul 1, 2010)

Because time is on your side, spend some more time shopping around. You are both bound to find "the right one" given enough time. The best prices will likely be from motivated sellers in late November. A mid-year transfer to the new school should be beneficial because your kids will be special for a little while.


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## dubmac (Jan 9, 2011)

I agree with kcowan. The two of you obviously see yourselves buying a nice home in Calgary sooner or within a few years. You do not know what could come available in the near future, unless to make arrangements with a realtor to keep an eye out for a home. My suggestion is to 
1. decide and agree upon where to live and how much to spend. Go no further until this matter is resolved.
2. Contact a realtor and start getting some ideas/properties. Youe need not visit all of the homes, but you and your husband will be in a dialogue on what is, or isn't, a good place to purchase. The conversation that you have as you evalaute homes is essential to your happiness in the future - It takes time and energy. You obviously have both, as well as $. Somebody out there has the perfect home for you, and they may be more motivated to sell than you think. 


3.


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## KrissyFair (Jul 8, 2013)

james4beach said:


> Midwifery?


*Snort* I can tell you with 100% certainty that's not it. Wonderful field that it is (highly biased opinion there)... it's definitely in the 'well-compensated' category rather than the 'highly lucrative' category.


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## humble_pie (Jun 7, 2009)

what a cold wind of caution is sweeping through cmf forum this august!

black mac says:



> decide and agree upon where to live and how much to spend. Go no further until this matter is resolved


the way i see it, it would be a waste of time to argue out an arbitrary price level in advance, without concrete firsthand info.

the family is not financially challenged. A $2 million house may initially seem insanely priced to Madame, so in the abstract she might reject the price tag. But in truth it's likely only 3 times the household income right now, if one includes registered accounts plus investment income within the corporation. Soon, a $2 million price tag will be only twice the household income. Such a house purchase is eminently doable.

the children are still tiny. It's easiest to move them at these infant & toddler ages. This is the time to start building their childhood memories, imho, not fret about some abstract inheritance the same children might receive many, many decades in the future.

i think the drill is to throw caution at least somewhat to the wind & go out looking for the house of dreams. Obviously these parents are savvy enough to demand value for their $$, they'll never waste those hard-earned dollars, they more than many other people will be able to negotiate a price down to its fair level or else move on to another home buying opportunity.

it won't matter whether the house of dreams costs $1.5M or $2.25M. Faire fi à toute prudence.


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## donald (Apr 18, 2011)

Also:Money is cheap historically,probably not a bad time to lock in ''cheap'' rates to borrow no?(cheap debt to service)Not that leverage would be your attempt here but it could also open up possibilities in that realm.
Your financial profile surpasses the ''gail vaz-oxdale" school of thought.
It's obvious your well-versed with investments/markets and are doing well in diy.
Why not sit down with a ''high'' net worth advisor/or your senior investment banker @ your branch and go through everything esp with regards to your corp/taxes/portf/ ect,get a high level opinion on how to proceed,just a thought.Your situation is well past the common personal finance kool-aid.You fit the bill now to get a custom plan imo.(and it's likely worth it to spend $ seeking a wealth advisor,your getting close to needing a ''team'' anyways,you probably have one in place anyways?)


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## atrp2biz (Sep 22, 2010)

We're both aligned in terms of feeling that it isn't necessary to jump in with both feet immediately. However, we are casually looking at properties in our desired neighbourhood and if we do find that property, I would like to be able to jump on that opportunity. That said, the two of us have very different expectations in what a dollar can buy in said neighbourhood. As I mentionned, $850k will get you 1200-1400 sqft. Given our needs, my thought is that this simply isn't enough. I shudder at the thought of having 16, 12 and XX year olds down the road in such a small home. In order to get the 2000-2500 sqft that I'm looking for, we would have to accept something in the $1.2-1.4 million range. If we were looking in a different neighbourhood, satisfying this square footage with $850k would not be an issue (and I would be happy with that). But since we are set on the neighbourhood given the school, this is a price tag that I'm willing to swallow.

As for cost of capital, we're hoping that interest rates go up sooner than later (ie. before we buy). Rates have already started to creep up and we hope that trend continues to cool the RE market as we have sufficent liquid assets to buy even the house of my dreams with no financing (albeit not particularly tax efficient since it would have to be pulled from the PC at once).

We always joke that our roles are reversed in this relationship. I'm the one who carries a man purse around and come to the rescue with a roll of toilet paper from my murse when our four-year old sneezes in public somewhere.


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## nahc (Feb 22, 2011)

Thank you all for your kind advice. We will keep looking for a house...as we have for the last two years. The only house we agreed on once in this time was such a good deal that it sold the day we saw it. I just don't see any ones that are good value right now. I also think a house is a place to live in, not a investment. Case-Shiller and the Economist makes a good case for why. My husband laughs because I do agree with Garth Turner to a certain extent.

I think we are too young to look at wealth management but eventually should look into this.

Husband is an MBA (whatever they do--I still don't understand what he does for a living, even when we were dating) and I am in medicine, sub-sub-subspecialty. I still remember the not too far off days when I would near hallucinate from the lack of sleep, working as the lowest of the low. Well, now I choose how hard I want to work (to a certain extent--you still have to work alot), but I still "trade life-energy for money" as somebody else on this forum put it. I hate just to blow a bunch of "life-energy" just to keep up with husband's friends the Jones -- time I could better spend with my kids.

PS. The stroller doesn't collapse and is a pain to put anywhere. We could put it in the garage like the other one if it did collapse. There are toys in the living room...and the kitchen...and the rest of the house. That's because husband goes and buys a new toy every time he's alone with the kids when I'm working -- to my annoyance. Even the grandparents says the kids has too many toys:hopelessness:!


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## Smoothie (Jul 11, 2011)

james4beach said:


> What I desperately want to know is what industry or field of work you are all in. I want that kind of income, I'm young enough to change.
> 
> Midwifery?
> Banksters?


She's gotta be a doc. I'ld say radiologist. Good on her.

That means concern about job stability are absolutely zero.


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## houska (Feb 6, 2010)

I've been in a not too dissimilar situation. Rented for years while making a very attractive income, finally we bought a heritage house in one of the nicer neighbourhoods in our city. As a result of having saved and lived fairly frugally, was able to make a nearly cash-only offer and paid off the rest in 2 years (actually reborrowed some money to invest, but that's a different story).

While I didn't mind renting, the feeling of comfort and pleasure from owning our place, and over the years since adjusting it to fit our whims (garden, kitchen reno, decor, etc) has been immense. And unexpected. As an aside, it hasn't been a bad investment financially either, but that's neither here nor there. Given how you describe your situation, just like in ours, whether or not the market value of your home once you buy it takes a hit is not going to be too much of a concern, assuming it is a home you love and will not feel the urge to switch to another one.

So - Madame - your husband wants to "settle down" in this way. I'll bet that after you find a property you both like, in a few years, you'll both love having it. Stop worrying so much about the financial sense of it and think about what the two of you want in life. Let your husband paint for you the dream lifestyle he's after and then see how both of you can adapt it to fit your desires.
Monsieur - this is hard for your wife. The dream of the house and a more "established" lifestyle isn't as real for her as the comfort of the financial stability you have. Go slow, and wait until she gets excited with you about a specific property and what you would do in it. She's not going to get excited about the abstract concept. And don't buy something just because it's there.

Ideal outcome: you spend the next year to 18 mos looking with an open mind but fairly low intensity. You'll probably find 2-3 properties Monsieur would find quite fine but don't excite Madame. Don't buy them. You will probably both flip flop several times as to what you actually feel is important to you. That's fine. Then at some point you will see something that you'll both feel is the One. Then's the right time.


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## james4beach (Nov 15, 2012)

Smoothie said:


> She's gotta be a doc. I'ld say radiologist. Good on her.
> 
> That means concern about job stability are absolutely zero.


Big respect to doctors... good stuff, if so. Just hope she's not a bankster.


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## peterk (May 16, 2010)

atrp2biz said:


> In order to get the 2000-2500 sqft that I'm looking for, we would have to accept something in the $1.2-1.4 million range. If we were looking in a different neighbourhood, satisfying this square footage with $850k would not be an issue (and I would be happy with that). But since we are set on the neighbourhood given the school, this is a price tag that I'm willing to swallow.


Is this the primary reason for the neighbourhood you have in mind? How much better IS the school in that area? Better than some other school + 500k worth of private tutoring? That's a lot of tutoring...


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## Sampson (Apr 3, 2009)

peterk said:


> Is this the primary reason for the neighbourhood you have in mind? How much better IS the school in that area? Better than some other school + 500k worth of private tutoring? That's a lot of tutoring...


Yeah, it is that good. On par with the best rated private school in Alberta, Tuition about $25k per year, so for two kids over a lifetime, less than the private school.


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## Rusty O'Toole (Feb 1, 2012)

If I may come at the question from a different angle... accountant and financial types have proven, that renting is a better deal financially than buying. Especially if you take the money you save, and invest it.

The more expensive the house the truer this is. As you move to a more expensive house, the rent does not go up in proportion. You can check this out for yourself. If a $250,000 house or condo rents for $1500 a month, a $500,000 house will not rent for $3000. It will be more like $2000. The same holds true all the way up the scale.

So, you should be able to rent the kind of house you like for half what it would cost you to buy. Maybe less. This is a terrific bargain. It may not be the kind of bargain you are looking for, but on a value for money basis it is hard to beat.

The downside is you may have to move before you want to if the house is sold.

The upside is, if it doesn't sell rent control protects you and over the years, the rent gets cheaper and cheaper. Someone who has been in a rent controlled house for 15 or 20 years, is paying about half the market rent.

So the trick is to find a house you like, that is owned by a doctor or someone with a substantial income who wants to keep it as an investment but does not want the cash flow. There are more of these around than you might think.

Then make sure you give that person a no hassle tenant. Rent on the dot every month, keep the place clean and in good repair, no nitpicky complaints, it's really easy to be a dream tenant.

With a little luck you could live in a luxury home for a fraction of the true cost.


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## Plugging Along (Jan 3, 2011)

^there is no rent control in AB

Also, the area they are looking at with the size of house they want is rare. 

As said before , this isn't a financial question but rather a life style question. They can easily afford it, and it will provide them more stability.


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## Plugging Along (Jan 3, 2011)

Back to the OP

The area you want is beautiful (and out of flood plain) and I agree with hubby that you probably won't find what you want for under $1 mil. 


As others have said, this is not a financial decision but life style. That's okay, you guys have worked hard and earned it. 

I will come from a different angle as another Calgarian with young kids in school. I think living by the school is great, but make sure that is truly the right fit for the child and your values. 

We bought a house in a great location backing on to a great school that backs onto our yard. Then we had kids, no problem, then we had a kid who was not the regular type of learner. The school that backed on to our house no longer meets our needs. Our child needs more challenge. We need either a private school or something different. Our best laid plan of having the school in our back yard no longer works. 

Also, what are you determining as the best school. 

Finally, another consideration is to take a look at the demographics of the commnity. Scarbora is an older well established neighborhood, and because of the housing prices the peopel that live there will tend to be older and more established. We learned this as our community is not a starter home community, and there are few kids compared to the other newer communities. Our visions of neighborhood kids, involves a lot more driving to play dates than I figured. 

If you love the area then take your time. I would make sure you visit the elementary, jr, and high school before you buy. End of August is great to do that.


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## the-royal-mail (Dec 11, 2009)

What about the maintenance aspect? It's worth considering that house ownership means that YOU must cut the grass, take out the garbage, maintain the property, fix the roof (even if you get contractors in), upgrade things every few years and such. Virtually none of these things exist with an apartment. So, how busy are you? Do you have time to pile on all these sorts of responsibilities? They'll be a real drain on your time if you are in demanding 24-7 cellphone access jobs.

Also, property taxes and fees are very high in cities these days.

That said, with your income, I see no other reason you couldn't buy yourself a house if you wanted to. The issue here seems to be one half of the couple wants the house while the other does not. Perhaps it's time to set up a spreadsheet with pros and cons and discuss it together. That might help you decide.

Also remember if you buy the house, once it's paid off the mortgage disappears. With rent, you pay that forever and it usually goes up x% per year.


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## kcowan (Jul 1, 2010)

Rusty O'Toole said:


> Then make sure you give that person a no hassle tenant. Rent on the dot every month, keep the place clean and in good repair, no nitpicky complaints, it's really easy to be a dream tenant.


And watch out for suggestions for improvement. A good friend cannot stifle his good-natured suggestions for improvements to the landlord. The average landlord is happy with the status quo and no suggestions!


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## Eclectic12 (Oct 20, 2010)

Rusty O'Toole said:


> If I may come at the question from a different angle... accountant and financial types have proven, that renting is a better deal financially than buying.
> 
> Especially if you take the money you save, and invest it ....


Based on some assumptions, including lifestyle choices - yes.

Part of the trick is knowing oneself well enough to avoid a choice that is not really going to happen or would drive one nuts.


Cheers


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## Four Pillars (Apr 5, 2009)

Rusty O'Toole said:


> accountant and financial types have proven, that renting is a better deal financially than buying.


This is impossible to prove without knowing the future. How much does the purchased house increase in value? What the rate of return of your investments? Too many unknowns to say one is better than the other.


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## Cal (Jun 17, 2009)

I would also wonder how many houses in the neighbourhood you are looking at change hands annually. And out of those houses, how many would you actually consider to be the perfect house for your family. It may take a year just to find the right house, no harm in passively looking at RE, imo.


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## piano mom (Jan 18, 2012)

Wow, talk about analysis paralysis LOL. We have bought 2 houses since my husband and I got married 17 years ago and I don't recall putting so much time and thought into buying a house.


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## kcowan (Jul 1, 2010)

We bought 4 houses before making any analysis. The frictional costs were all paid by the company. Now we rent.


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## Rusty O'Toole (Feb 1, 2012)

Four Pillars said:


> This is impossible to prove without knowing the future. How much does the purchased house increase in value? What the rate of return of your investments? Too many unknowns to say one is better than the other.


For this to work out you have to assume real estate will appreciate at the same rate, on average, that it has done in the past. Likewise the stock market.

You also have to ignore the question of leverage (you can buy a house for 10% down, not so stocks).

Financial books always used to start out by "proving" real estate is a lousy investment.


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## Plugging Along (Jan 3, 2011)

the-royal-mail said:


> What about the maintenance aspect? It's worth considering that house ownership means that YOU must cut the grass, take out the garbage, maintain the property, fix the roof (even if you get contractors in), upgrade things every few years and such. Virtually none of these things exist with an apartment. So, how busy are you? Do you have time to pile on all these sorts of responsibilities? They'll be a real drain on your time if you are in demanding 24-7 cellphone access jobs.
> 
> Also, property taxes and fees are very high in cities these days.
> 
> .


Lets compare apples to apples, you can't really compare renting an apartment, to buying a house. Renting a House to buying a house is a fairer comparison. Otherwise, why don't we compare costs at living at home with parents vs buying a house.

I don't now about you, but even in my apartment i Took out the garbage. You mow the lawn, maintain a house even when you rent. You do minor repairs while you rent. All of these things hat you mentioned, one can hire someone to do. My spouse and I worked crazy hours and all these things get done, just not always by us. Oh we even hired peopel to do some of these things when we rented too.


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## blin10 (Jun 27, 2011)

Plugging Along said:


> *Lets compare apples to apples, you can't really compare renting an apartment, to buying a house. Renting a House to buying a house is a fairer comparison. Otherwise, why don't we compare costs at living at home with parents vs buying a house.
> *


people LOVE to feel good about their life style decision, so they need to make stuff up to feel warm and fuzzy inside


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## Sampson (Apr 3, 2009)

blin10 said:


> people LOVE to feel good about their life style decision, so they need to make stuff up to feel warm and fuzzy inside


And sometimes anonymous internet comments make absolutely no empirical sense.

If you compare apples to apples... in Calgary, Scarboro neighborhood. The $1.5M 2400 sqft detached houses, and you compare it to an apartment of similar size, fit and finish. Those West end downtown apartments rent out for $5000-$7000 per month. This is roughly equivalent to a $900,000 to $1,200,000 mortgage.

Is this still a warm and fuzzy comparison?

Of course the OP could move into one of the $750,000-$800,000 houses in the community, but they would be getting 1200-1500 sqft, a 50 year old house renovated 20 years ago but why compare apples to apples? Better yet, the family of four could move into one of the 500 sqft lowrise apartment condos for $215,000.

Of course apples to apples is critical.


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## tygrus (Mar 13, 2012)

Try the analysis assuming $50 oil for a few years and see if you still want to sink er all into a mill plus place.

This is the highest peak ever in canadian RE goosed by lax lending and emergency rates, not wage and income gains so anybody contemplating buying now is playing with fire. I wouldn't touch Calgary with a 10 foot pole right now, especially with the post flood hysteria. When Brisbane was hit by floods a few years ago, their RE market fell 15% in a matter of months.


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## catherinegriffin (Aug 22, 2013)

*Seriously, you need to talk to your husband*

Seriously, you need to talk to your husband more than us. It is important to both of you to have good communication when it comes to family matter. More especially when buying a property that will be yours soon (or if you want to pass it on to your children, who knows?) Somehow you are reasonable, but I think the best way to settle this argument is to talk to your husband.


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## atrp2biz (Sep 22, 2010)

^Ergh?

Anyways, we still have our eyes open but nothing is coming up on the area. We actually went to an open house over the weekend for a place asking ~$1.5M. We both agreed that if this house was in our desired neighbourhood, we would jump on it, but alas it is overpriced for where it is located and it would be well over $2M if in our desired neighbourhood.

The search continues, but neither one of us is in a rush. We just hope that the interest rates continue to creep up.


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## alingva (Aug 17, 2013)

http://www.cnbc.com/id/101150382?ut...=PersonalFinanceReader&utm_campaign=109799564 REAL ESTATE is in a bubble


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## atrp2biz (Sep 22, 2010)

Update:

We made an offer on a house today. It was the first day the property was listed. We bid 2% below ask but then found out there were three other bidders. We didn't end up getting the property, but at least we're trying. It also helps that we got a kick in our behinds since our landlord gave us notice that they were ending our lease at the end of the term so that they can sell. It looks like we're going to have to move into another rental place for the time being. It's disappointing, but ready to move on to the next one.

I am happy to report that nahc has taken infills off of the list. We saw two of them yesterday and she said they were outright no's. She's coming around.


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## martin15 (Feb 18, 2014)

atrp2biz said:


> Update:
> 
> We made an offer on a house today. It was the first day the property was listed. We bid 2% below ask but then found out there were three other bidders. We didn't end up getting the property, but at least we're trying. It also helps that we got a kick in our behinds since our landlord gave us notice that they were ending our lease at the end of the term so that they can sell. It looks like we're going to have to move into another rental place for the time being. It's disappointing, but ready to move on to the next one.
> 
> I am happy to report that nahc has taken infills off of the list. We saw two of them yesterday and she said they were outright no's. She's coming around.



I would wait til next year..

http://www.zerohedge.com/news/2014-02-12/did-canada-just-pop-its-housing-bubble


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## Taraz (Nov 24, 2013)

If I was going to buy a million+ dollar house in downtown Calgary, it would have to be in Upper Mount Royal. The lots are insanely large for the middle of a city. There is plenty of room for even a big kid to ride a bike. 

*swoon* :02.47-tranquillity:


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## Karlhungus (Oct 4, 2013)

I would definitely buy a house if i were in your position. Dont try to time the house market like a stock. Having your own place has so much more benefits then renting, you dont want to end up like that other poster none, who got kicked out just before christmas and comes on here constantly complaining about landlords.


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## nahc (Feb 22, 2011)

Update. We have a conditional sale on a house that mostly fits our needs (4+2 bedrooms, newish-well, at at least not the70+ yo disasters we were used to touring, excellent schools and decent size lot in a respectable area) although it ended up not being in Scarboro. Atrp2biz is pumped about getting "adult" non-ikea furniture etc, while my stomach heaves at the $$$ (the largest sum I've spent in my whole life.) however, it consoles me to think we got it at a good deal (stale listing, poor show due to seller agent inexperience, and heavy pressure to sell by owner). Because it was such a good price I won't cry too much if the property loses 30%...so I tell myself.

Anyways, does anybody in Calgary have recommendations for a real estate lawyer? And a moving company?


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## martin15 (Feb 18, 2014)

nahc said:


> Update. We have a conditional sale on a house that mostly fits our needs (4+2 bedrooms, newish-well, at at least not the70+ yo disasters we were used to touring, excellent schools and decent size lot in a respectable area) although it ended up not being in Scarboro. Atrp2biz is pumped about getting "adult" non-ikea furniture etc, while my stomach heaves at the $$$ (the largest sum I've spent in my whole life.) however, it consoles me to think we got it at a good deal (stale listing, poor show due to seller agent inexperience, and heavy pressure to sell by owner). Because it was such a good price I won't cry too much if the property loses 30%...so I tell myself.
> 
> Anyways, does anybody in Calgary have recommendations for a real estate lawyer? And a moving company?



Make sure you get a really good home inspector, not one who is being paid to close the deal.

"A good deal" these days is very hard to find.


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## AltaRed (Jun 8, 2009)

martin15 said:


> Make sure you get a really good home inspector, not one who is being paid to close the deal.
> 
> "A good deal" these days is very hard to find.


Preferably an inspector with the technical CV/credentials to know what he/she is doing. Possibly retired city building inspectors or firemen. Don't be shy in asking for this information before hiring them. Also make sure you are present and tag along with the inspector asking questions as you go along. Inspectors are more likely to do ALL the things necessary if you are tied to their hip.

Watch for any major renos done and make sure the building permit/gas/electrical/plumbing inspections are signed off. Make sure the Real Property report is recent and signed off by the City AND do a visual check yourself comparing the content of the Real Property report against a visual on site comparison. Things that are added after the date of the Real Property report may be in violation of city bylaws, e.g. side yard A/C condenser encroachment, deck encroachment, garage built without a dev permit, etc.

As for lawyers, it is pretty much a cookie cutter process and there are dozens of them out there. Most will do a package deal for circa $600 with the bulk of the work done by an experienced paralegal. I won't vouch for them nor have any relationship with them, but I used Dave Wright (Wright Law) by Westbrook Mall for a number of RE deals over the last 3 years....although I think they may have a new (to them) paralegal there now.


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## atrp2biz (Sep 22, 2010)

Thanks, Altared. Wright is pretty close to our current location so we'll likely use him. Home inspection is complete--we contacted an inspector independently from the realtor. We waived the condition so now our deal is firm.

Generally, we're pleased. We're not ones to jump up and down and get overly emotional about buying a house. If we didn't get the house, we wouldn't have been too upset. We're happy that we got a decent deal out of it. Market prices in Calgary seem to be 10-20% higher than assessed value and we were able to get it for 1.6% over assessed value. I know there are a lot of moving parts in an assessment valuation, but at least we're on the left side of P25 on the distribution.

Like nahc said, it's not Scarboro, but the schools in the area are top-notch.

As for financing, the prime minus 1.00% from Investors Group seems awfully attractive. We're meeting with a rep tomorrow. I'm sure the rate is to hook clients onto their other products, so we'll try to go in appearing naive and interested in all of their great products ("MER of only 3%--that's great! Wait, what's an MER?") and say no in the end. The only product we would be remotely interested in would be life insurance for our corporations. Apparently, the pool of funds IG has allocated to this promotional rate is limited so it's first come first serve. Anyone else looking into this? I wonder if our current banks will match IG's rate.


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## marina628 (Dec 14, 2010)

IG Is one experience I would love to forget to be honest ...


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## kcowan (Jul 1, 2010)

IG is akin to Timeshare vacation properties. They are a great deal only for the people selling them.


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## atrp2biz (Sep 22, 2010)

So what would you do? Would you approach IG for their prime minus 1% variable rate mortgage or go with another lendor for prime minus ~0.65%. I'm assuming we have the pubic fortitude to say no to all of their other product offerings.


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## techsoul (Feb 27, 2014)

Wow, this thread makes me feel very inadequate. My wife and I are in a similar stage in our life with a similar housing situation. The main difference is our income is barely breaking into 6 figures (no nanny, but a stay-at-home parent). We're very diligent with our money, but your family has already made more money this year then we have made in our entire lives combined *sigh*

Envy aside, good luck with your new house. Take comfort that your financial situation puts you in the 0.001%.


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## Jagas (Feb 11, 2013)

tech - Don't sweat it, compared to the average Canadian household you are killing it. Somewhere out there someone has already made this year what the original posters have made lifetime and so on and so forth.

atrp2biz - Congrats on the house, very interesting thread! I would *probably* try to get the other lender to match P-1 and not worry about it much if they won't, if P-0.65 is the worst case alternative.


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## My Own Advisor (Sep 24, 2012)

Not much else to add here....

Congrats on the house atrp2biz! P-1 or P-0.65 or anything in that ballpark is excellent, especially given we're still in a historically low rate environment.


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## Pluto (Sep 12, 2013)

atrp2biz said:


> So what would you do? Would you approach IG for their prime minus 1% variable rate mortgage or go with another lendor for prime minus ~0.65%. I'm assuming we have the pubic fortitude to say no to all of their other product offerings.


I'd talk to them to see what the exact deal is. I heard - could be mistaken - there is a condition that you can not refinance and you have to stick with them as long as you own the house. 
If you don't like the deal, get a mortgage broker. (Going directly to a bank is unlikely to get you a good deal. )


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