Monday, September 29, 2014

Matrimony Monday: I Am Not a Bride

I’m over 9 months into this wedding planning business, and things are moving along. A few logistical kerfuffle’s here and there, but overall things are barrelling ahead. But at some point in the past few weeks I’ve realized something. I don’t think I am a bride.

Hold on, don’t panic Mike, parents, or future inlaws, I am totally and 100% ready to be Mike’s wife. But this whole bride stage is freaking me out. I know by definition my role in all this is to be a bride, but in the traditional way of looking at weddings, being the bride doesn’t quite suit me.

Lets back up a bit. As a kid, I remember planning a school “wedding” in grade 1. Did anyone else do this? Basically the boy would get pestered enough to “marry” the girl (my mom will tell you that my “wedding” got out of hand, and there may have been a “minister”, dresses and suits and rings and flowers involved. I’m sure in some cultures, I may actually be married to that guy haha). And the funny thing is, I’m sure little 6 year old me felt more like a bride than I do now, as an actual bride-to-be.

The wedding industry complex has put a certain pedestal around being a bride. The whole 86 Billion Dollar industry is built on it, in fact if you look at 95% of wedding marketing, the groom doesn’t even have to exist, and to me that is ridiculous. But advertisers play this up. The minute Mike and I got engaged my facebook was filled with “you are engaged, come look at this wedding related thing”, whereas Mike’s was still filled with advertisements based on his occupation and interests.

To the “industry”, I stopped being “Kaylee: Civil Engineering Grad, Full Time Engineering worker, Math Tutorer, Triathlon and Hot Yoga Doer, Part time blogger, Bike Commuter, Veggie Eater, Toronto Liver, Cat owner, Candle Stick maker” to being “Kaylee: Bride.” Along with the other 25K+ brides each year. Thanks wedding industry, I am now part of the collective. And even for alternative, unique wedding websites/planning etc. you are still “Bride”. You may be “Hipster Bride” or “Traditional Bride” or “City Hall Bride”, but deep down, you are “a bride”. Poor Barbie, now I know how she feels.
Ironically, I actually do really like this dress! Source

And with this label, comes an expectation of ways to feel. You (and only you, not the groom), are expected to decide every little detail of the wedding, and not with logic, but with EMOTION! (Fun fact, I do not care AT ALL how my bridesmaids do their hair, but this is something I "should" care about). You are expected to get bridal privileges of making requests/demands because it is “your day” (not to be confused with Bridezillas, but one step below that is still considered completely acceptable, which can still fall in the range of acting like a princess). And you are supposed to invest (time and money) every waking minute into picking, and falling in love with your dress.

And this brings us back to the reason of this post. I am in the middle of dress shopping, and I feel that no matter what dress I try on I will feel like I am playing dress up….because I don’t feel like a bride! I don’t think I will ever have that emotional reaction to a dress, but the industry has made us believe, thanks to the tv shows, that the moment has to happen. When in reality most of the people I have talked to have said it doesn’t.

I don’t feel like a bride, I feel like a girly, who is trying to plan a function (and that part I love), to sign a legal document to marry Mike, commit in our families’ religion(s), and then have a big party. As another friend of mine said “all I want is for my wedding to be surrounded by people I love and who love me, being happy for me that I'm marrying someone I love”.

And technically that could be done wearing a paper bag.

Dragon's are totally invited to my wedding. Source
Post Script: If when you got engaged, or when you do get engaged, you are the most excited about being part of all the “bride” glory…that is totally ok!! You are the normal one, I am the weird one, and I don’t want this to come across as me saying my opinion is better/worse…it’s just how I feel! In fact I’m jealous!! It would make this whole wedding planning thing a lot easier if I could just dive fully into being a bride!

Wednesday, September 24, 2014

How we Bought our First House in Toronto in a Sellers Market-The Close

(Disclaimer, I am not an expert on this! This post is solely based on our own experiences, talk to Real Estate Agents, Banks, Lawyers, Mortgage Brokers etc. for information and advice specific for your needs.)

Part 3: The Close

Or the period where you spend all your money and sign a lot of papers. 

In the last post we had our offer accepted and we had BOUGHT A HOUSE! Immediately after signing the offer, things started rolling.
The Money:
For the deposit, within 24 hours of our offer being accepted we had to drop off a certified cheque for 5% of the purchase price. Luckily we were expecting this, so we had that money in “cash”, not stuck in TFSAs or RRSPs. I can imagine though this may be a surprise to some people, so it is good to note. We both went to our banks and took out half the deposit each (note to bring an ID). Our realtor, Rory was great and he ran around the city to our work places to pick up the cheques and drop them off with the seller’s agent. Lesson Learned, the first chunk of money is hard to part with.
Next came collecting the rest of the down payment from the various accounts. First of all, be careful with work retirement savings accounts. As much as they are great, I learned the hard way that not all of it can be accessed until you leave the company, so a large chuck of savings I thought I could use are actually “locked” in. That wasn’t a fun surprise. Lesson learned would be to call the work savings plan company earlier in the process to get an idea of how withdrawals can be made.
Same to be said with any RRSPs. Under the Canadian Home Buyer Plan, up to 25K can be withdrawn for a home purchase. Things to note are that you need to fill out and submit this form, and only money deposited 90 days before the withdrawal can be taken out. Also important to note is that this is a “loan” to yourself and the money has to be paid back in over the next 15 years, starting 2 years from the withdrawal, so we had to make sure our budget still had room for RRSP savings. I worked with the RRSP accounts to determine the best day to withdraw the money to maximize the withdrawal.
I was a little OCD with this and tracked every penny as it moved from one account to another, and was constantly running numbers to make sure we would have enough on August 29th to pay the down payment and all the closing costs, and still be able to buy groceries (spoiler alert, we were totally fine, but I still lost sleep over it).
The Mortgage:
During this time we worked less with realtor and more with the Mortgage broker. We had to prove that we had the full down payment amount in our account, and get her all the paper work. Even though we were pre approved, more documentation was needed, but it wasn’t too bad. At this point we knew our rate and our monthly payment and could double (quadruple) check our monthly expenses. I won’t get into how to get the best rate, or the difference between all the mortgages/terms are, because a lot of way better websites do this one. Once again for us it just meant reading through it, asking questions, and then making a decision that suited our lives.
Our mortgage provider didn’t require an appraisal, but keep that in mind if you have no conditions on financing, the bank might not agree on the value of the house, and may not finance the entire mortgage. Something to consider if we had gone way over value for the house (note that over asking, does not necessarily mean over value.), so we made sure our house was of good value comparable to the others in the neighborhood.
The Lawyer:
We got our lawyer as he was referenced by our realtor, and because he specialized in real estate law and was located conveniently. We were bad and didn’t get a quote, but trusted our realtor. Everything worked out fine, but lesson learned would be to get a quote first. The lawyer basically takes care of collecting the down payment, land transfer tax, and other fees and in turn gives you the keys to the house. More details here about what the lawyer does. The lawyer also requires proof of home insurance, and mortgage info.
A few days before closing the lawyer sent us the expenses, and we went to the bank and got a certified cheque of the remainder of the down payment and closing costs. Our estimated closing costs were between 1-2%, and it was around the 1% in reality (we didn’t have CHMC insurance, and we didn’t buy a new construction home so there may be additional taxes on top of that for other buyers), so keep that in mind when buying the house. It depends on the complexity of the deal. 
We met with our lawyer the day before closing to sign all the paper work (we had to consider things like Joint Holding Tenants vs Tenancy in Common). The lawyer also sent the information to the city for the transfer of utilities and property tax, but not all lawyers do (note that a transfer fee is applied on the first bill).
Other stuff:
Home insurance- this needs to be done before the documents are signed at the lawyers office, we did it the same week as closing, but we should have/could have done it right after the offer was approved.
Life insurance- we are getting this vs Mortgage insurance (that protects the bank, life insurance protects each other), Life insurance takes a while to be processed, and we forgot to double check our work plans so we had a few steps back before we got everything finalized. Lesson learned, I would have started this process right after we had our offer accepted.
Utilities- As mentioned the Toronto stuff should automatically be transferred but check with your lawyer, the fee is 51 dollars if both are transferred at once. A good suggestion was to check the water meter on the day of possession.
Power- Luckily for us we were just transferring from one address to another with Toronto Hydro, so it was very easy (a few clicks on a website).
Gas- Since we are a new account, we need to pay the deposit, and set up an account for them to transfer the meter over. A good suggestion was to check the reading on the day you take possession to make sure you are charged correctly.
Viewings- We had agreed on 2 viewings of the house before closing, but only really needed one due to the short closing time, so we went with our realtor 2 days before closing to make sure everything was ok.
(Don’t forget about the more optional utilities such as phone/cable/internet, and all the other moving stuff such as change of address etc. perhaps I’ll do a moving post at some point!).
After all that commotion, we finally had our house!! YAY! We are currently moved in and unpacking, and getting settled into the new routine and ever growing to do list of home ownership!

If I have forgotten anything about the process please add in comments below!!  

Saturday, September 6, 2014

How we Bought our First House in Toronto in a Sellers Market-The Hunt

(Disclaimer, I am not an expert on this! This post is solely based on our own experiences, talk to Real Estate Agents, Banks, Lawyers, Mortgage Brokers etc. for information and advice specific for your needs.)...

Part 2- The Hunt

As detailed in our last post we spent almost 3 years planning to buy a house, starting with boring things like bank meetings and saving money, to fun things looking at houses and neighbourhoods. After we had narrowed down our options, we met with a realtor in April of this year to get real about the home search.

..Side note, these posts are coming across like it was all happy rainbows and unicorns and sunshine. To be honest, I was nervous about every step of the process. I was (still am) fully aware of the responsibilities of owning a home, and no matter how long we waited I would always feel nervous…but Mike on the other hand was super excited about everything so we balanced each other out. So with the first “real meeting” with the realtor, I was a nervous wreck, since this made it seem so much more legit…

Get a Realtor:
We used the same realtor, Rory Armstrong, who helped us find an apartment. We chose him because he wasn’t pushy, very laid back, and listened to what we wanted. We also liked that he always was quick with getting back to us, and answered our 100000 questions. Realtor’s are typically free for the buyer, so why not!! We signed a contract with the Rory (fairly straightforward), and started our home search on Easter weekend with my parents in tow (they were visiting from NB at the time). Lesson learned: east coast parents will be shocked by prices of Toronto houses.

Know the Market:
Even though we had looked at houses for fun, actually analysing the market was a whole other story. I signed up for sold listings through to see what the houses we viewed sold for, even if we weren’t interested. Some (aka Mike) may have called me obsessed with this email. Almost every house we looked at sold for over asking, except for the ones that were tear downs. Most houses were listed lower than value to drive up a bidding war. The market might have cooled slightly from last year, but for the price range we were looking at it was still a sellers market with every house going into multiple bid situations (aka a bidding war dunn dunn dunnnn). This makes house buying so much fun (sarcasm font).

Get the Stuff together:
Shortly into the process, we found house we liked! It was a big old semi detached with lots of character and funky paint colours.
First fav walls and all!
As we were driving home from the showing discussing if we should make an offer the next day, Rory called and told us that a bully offer had been made, 3 hours after the house was on the market, and then the bids were pushed up to be due 12 hours later.  Not enough time to get our stuff together, but it made us realize that we had to get all of our stuff together for the next potential house. That is where we got involved with a Mortgage Broker (referenced by our realtor) to get a mortgage. Once again this is a free services (typically paid by the lendor) so why not. We started providing her a ton of paper work (tax files, income statements etc.) so that she could get our pre-approval.

The War:
From April until July we saw a lot of houses, I can’t remember the exact number but I bet it was close to 50. A good house hunting check list is located here, but items that stood out to me were check the electrical panel, check the attic if possible, turn on taps and lights and open windows/doors, and check to make sure car can fit down the drive way if it is back parking space.

We saw some good ideas while we were house hunting:

Gorgeous backyard and screened in porch!

Nice beadboard!

Renovated bungalow...too fancy for us, but I loved the fireplace

I loved this floor and the cabinets!
We also saw some interesting stuff:

Funky built in murphy bed

This house had an intense security system...we are thinking just for this!
This house looked like a castle!

Worst kitchen ever, looked nice but the counters were too high, and the electrical panel was built into the COUNTER
Other exciting things we found, an empty house except for a jar of pickles in the basement (same room lead to this picture!), "central" air conditioning, a house full of mold with a creepy back yard, and LOTS of wood panelling!

We put in 3 failed offers in multiple bid situations that all sold way above our budget. This was a time consuming and stressful period. For each of those offers, I would be anxious all day waiting to see if we got the house or not. Lesson learned here was to not get too attached to a house. Mike and I are fairly logical people, so we stuck to our budget. Even if we really loved the house, we couldn’t go higher just because of emotions.

Because most of the houses went 15% over budget, we started looking at cheaper houses, so that in a bidding war situation we would be able to actually put in a fair bid.

The Offer and Conditions:
If you google “how to buy your first home” you will see a lot of great tips, however, those articles are not written for a multiple bid situation. For example, having your own home inspection is “required” by those articles, but in a bidding war, typically the inspection is provided to all bidders to try to limit the number of conditions at closing. For us to mitigate the risk of the home inspection missing something, we didn’t ever go to the top of our budget. That would allow us to have some savings left over for any “surprises” after we bought a house. Also, with our backgrounds in engineering, and a little bit of research we learned how to identify big problems such as mixed wiring, and potential asbestos, roof problems etc. And when we were given the home inspection we read it cover to cover to identify any issues.

In this market and for our budget, we quickly realized that every house was going to have some sort of issues (one we put an offer in smelled so bad of smoke, you could smell it outside the house), but as long as we budgeted for them we would be ok. We did our research on costs of repair (ie knob and tube wiring can cost up to 12K to fix, getting smoke out would require new paint, and new floors) and made decisions on how much to offer based on the repairs we would need to do.

We also tried to make our closing date as early as possible (30 days) to allow for a quick close, but we had to consider moving times, and giving 2 months notice for our apartment.

The Winner:
On July 26th, after a string of no luck with showings, we had a particularly good day. 2 out of the 3 houses were what we were looking for, and one was at the low end of our budget. We decided to put in the offer on the lower cost one, a tiny renovated bungalow, with income potential, and amazing back yard. Our realtor ran the comparables, and recommended a competitive price range. It was over asking because the house had been priced low to get attention for a bidding war. We went just slightly over the mid range of comparable prices.

The offers were due late on Thursday night (31st). This bid needed the offers presented in person by the realtor, and that required a hard copy signature (vs email like the previous houses we had bid on)…and of course after being relatively free all summer that night I had something I had to go to. Luckily it was in the same area as the house, so this was a bit chaotic having the realtor drive back and forth to get me to sign the papers. Mike waited at the house, and about 15 mins after the bid was submitted, the seller’s agent came out to tell him and Rory that we had got the house. Apparently the bids were close, but we were slightly over with a quick closing date so we were the winners.
I got the phone call around 9 that night, and was picked up to go sign some final papers and meet the sellers. They were a young(ish) couple moving out to Mississauga to be closer to work, and had done most of the renovations themselves in the 4 years they had lived there. Seemed like nice people! Lesson learned though: You don’t need the actually certified cheque for the deposit at the offer, but you need to bring a normal cheque for the deposit “for good standing”. This we didn’t know which meant a waste of driving back to the apartment to get the cheque.

Overall for this period, my lessons learned would be to be prepared to make an offer at any point by having a pre approved mortgage, and enough money in your account for at least a deposit (5%); be prepared to be patient; understand the flaws of the house; and stick to your budget and must have list.

This phase was emotionally stressful, but luckily is basically free! Other than an inspection (if needed), and of course gas and time, no money is spent during this time. That all happens next, in the closing period.

Next Post: The Close (or where you spend all your money!)

Monday, September 1, 2014

How we Bought our First House in Toronto in a Sellers Market-The Plan

(Disclaimer, I am not an expert on this! This post is solely based on our own experiences, talk to Real Estate Agents, Banks, Lawyers, Mortgage Brokers etc. for information and advice specific for your needs.)...

As mentioned in my previous post, this summer was an exciting one, especially since Mike and I bought a house!!! In the process I gathered a few lessons learned, that I couldn’t seem to find organized all together online, so I thought I would share my experience- in three parts: the plan, the hunt, and the close.

Part 1- The Plan 
To buy or not to buy?:
First, a long time ago, we had to decide if we were going to even buy a house. We have heard millions of opinions one way or the other for the past couple of years. In Toronto (and similar in Vancouver), financially, renting is, in general, the way to go. Experts say you can take the money you would save by not owning a home, invest it at 7% (historical values), and have way more money in a certain time period compared to owning a home. For us (and yes we did the math), the numbers came out pretty darn close, but having the autonomy of owning a house and not being responsible to a landlord was a big factor in our decision. Also, we were hoping to do some renovations and/or create a income suite to help make the house a better financial option than renting. Everyone is different, but our financial situation and lifestyle led us to the decision to buy a house. 

Save Money:
This step started way before we bought the house, but knowing for the past 3 years that we were working towards home ownership made us stick to a budget. It also made sure that we didn’t get into a spending routine that wouldn’t fit our lives in the future, which will make the adjustment to home ownership more bearable. My advice for this is to maximize work savings programs (employee share plans and RRSP savings...more on this later), and take full advantage of TFSAs as soon as you can. I procrastinated moving money from a low return savings account to a TFSA because I was “afraid” to lock in my savings, but talking to someone at the bank made me realize I was ridiculous. I could have saved a lot more money the past 3 years if I had had that discussion the day I started working. Lesson learned.

How much Money?:
After saving for a few years we started seriously considering buying a house (once Mike was working full time), so we needed to figure out how much of a house we could afford. By using online calculators we had an idea, but we went to get pre-approved by a bank to make sure. Even for a pre-approval the bank needs to know that there enough of a down payment saved, so we were saving way before this point. Also consider the down payment %. Anything less than 20% will need CHMC mortgage insurance, which is expensive, and has additional closing costs. We had to determine if it was worth it to go with a lower %, or wait a few more years until we saved a 20% down payment. All those options and scenarios can be run on this great website:

We also ran a few numbers to determine our monthly budget with a house at the pre-approved mortgage amount to make sure we wouldn’t be living on Kraft dinner for the next 5 years, using some of the values on the Ratehub website. I recommend Gail Vas-Oxlades budget worksheet. Some house budgeting tips:

1. 1% of the home price saved for maintenance annually
2. A good ball park for utilities is $300 a month for a small house (from Rate Hub)
3. Don’t forget property taxes
4. Consider new monthly expenses above and beyond the house (additional transit costs, increases in car insurance etc.)
5. 10% of take home should be kept in savings and 3-6 months of living expenses should be saved in an emergency fund. Don’t consider the house a “savings account” since the money is locked in into the house.
6. Cut any unneeded expenses, for us it was cable. Not having cable was a small sacrifice to lead to being home owners!
7. (General budgeting tip) For me I consider I get 2 pay cheques a month all year, the extra 2 paycheques during the year are “extra money” compared to my budget, and I can use that for savings, or for travel, or big purchases but it is a nice contingency amount to keep on a yearly basis.

Research the market: 
Just because we weren’t in a financial position to buy 3 years ago (Mike was still in school), it didn’t stop us from starting our search. We checked out different neighborhoods, and started looking at and Zoocasa for housing prices.
First pass at favourite neighbourhoods
This quickly showed us that our dream neighborhoods (Runnymeade, Bloorwest, Swansea, Roncesvalle) were definitely out of our assumed price range, and narrowed down our selection. We also could have used this neighbourhood matching service from Realosophy to find a neighbourhood that met our needs. I also considered things like commuting time, walking scores, crime rates, and gentrification of the neighborhood. For us we knew we wanted to be fairly close to downtown and near the water, and west of the city, which focused our searching in the lake shore communities of Mimico, Long Branch, and New Toronto. 

Our search area

We even went to a few open houses to get a feel for what we could buy in each area for our price range, just for fun. The lesson learned here was to remember that at this point we were only browsing. Mike and I found a house we loved way too early in the process, and almost put in an offer before we had even talked to a realtor or understood ANY thing about the home buying process. I’m glad we waited, but it was a hard decision to make at the time.

Understanding our needs:
We had to figure out why we were buying a house, and what kind of house we wanted to buy. This may seem straightforward, but there were quite a few options. Condo vs house? Rental Property vs Fixer Upper? Detached or Semi? We had to ask ourselves what we want in a property. For us we wanted a detached house that provided some income possibility.  I preferred a two story, but that was negotiable. We only need two bedrooms at this time, so we were ok with a smaller house, but we definitely considered our “five year plan”.  In a hot market like Toronto, and for our price range, we knew we had to keep our "must have list" pretty short to find a house. If we had started searching thinking we were going to get a HGTV home, we would have been very disappointed.

By narrowing down the price, location and type of dwelling we were fairly well prepared to go talk to a realtor, without being overwhelmed by all the options.

Next post: The Hunt