Real Estate Question? Ask David...

“Real life answers to your Real Estate questions” David Schooley, Broker

Dear David: We are saving for the down payment on our first home. We have 5% saved so far, should we put off buying until we have 10% down, to reduce our CMHC fees? — Every Penny Counts Dear Every Penny: Once you have your 5% down, I advise you to get into the market as soon as you are ready. It's unlikely you can save as fast as the real estate market typically appreciates, and the reduction in CMHC premiums earned by that extra 5% down won't put you ahead of the curve. Here's what I mean: Let's say you qualify to buy a home for $300,000. If the market appreciates at a rate of 4% per year (which is conservative), the value of that property increases at a rate of $12,000/year, or $1,000/month for the first year. While the value of that property is increasing, you're also paying down your mortgage at a rate of about 2.5% (or $7000 per year). If you wait to save an extra 5% down before jumping into the market, you're losing ground, as the reduction in CMHC premiums earned by putting 10% down on your purchase rather than 5% is pretty negligible (only a few thousand dollars). To build equity quickly, I would advise getting into the market sooner rather than later. Dear David: My parents are in their seventies and want to downsize to a retirement community. Any advice to get them started? — Moving Mom And Dad Dear Moving: My advice to your parents would be to focus on the fresh opportunities in this next chapter of their lives. I often remind people that their car's rear view mirror is much smaller than the windshield for a reason: they should focus more on where they're going than where they've been. Once your parents have decided on their next step and can get excited about it, they can take a more business-like approach to selling their existing home. This allows us to employ our most effective strategies and get the best results. Dear David: We are trying to set up appointments to see commercial properties. We have time to go after work and on weekends, but our requests are getting turned down. Don't they want the business? — Short On Time Dear Time: If your real estate experience to date has focused on residential transactions, it can be a bit of a wake up call to learn that commercial real estate is a bit of a different world. Unlike the realm of residential real estate, phone calls aren't typically returned late at night or on weekends, and for the most part, appointments are kept during typical business hours. Keep these "business day" protocols in mind and you'll be much more successful with your appointments.