The Very Personal Side Of Buying Real Estate

The Very Personal Side Of Buying Real Estate

Our McCullough Team is constantly asked by buyers during the process of buying a property questions such as “What should I offer?”, “What do you think of the property?”, “What do you think it’s worth?” and other questions that are very hard for us to answer. The fact of the matter is, real estate is very individual  – much like buying a car, a watch, or something that someone might ask your opinion as to whether or not they should buy it or not.   The issue that arises is that you might not consider buying that car or watch for yourself, so it is difficult to have an opinion on something that you may not be qualified to provide advice.

It is much the same with real estate.   People need to buy a property to suit their wants, their needs, and their priorities at the time. Very often, the property which a buyer is going to buy or is interested in wouldn’t be the property that we would buy for different reasons (that are not to do with the property itself). It may just be location, style or floor plan or something that doesn’t suit us. Buyers need to focus on what they want and opinions from us that are very valid such as construction issues, location issues, and market issues. We can do a comparative analysis on the property to get a close idea of what a reasonable price should be in a reasonable market, but it still has to be what fits your needs.  it is important to recognize that a property may not fit everybody’s needs AND that property may be worth a little more to some people compared to other buyers.

Myles and I have a very simple and basic approach to buying. Firstly, identify what it is that you’re looking to achieve. Buy within your means so you don’t have financial issues later and pay it off as quickly as possible. Look at your foray into real estate as being a long-term investment and as a vehicle for your retirement. In your later years, you will never regret having put aside money you would have otherwise blown.  By investing in real estate, you will be allowing others to pay off the mortgage so your retirement years will have added income flowing from those investments to you so you can enjoy those later years.

Some debt is good debt although that is not the case with all debt. Credit card debt that you will struggle to pay off should ALWAYS be questioned. Debt on depreciating assets should always be questioned as to why and if you actually need it.

A recent article from Real Estate Professional newsletter wrote:

“Canadian HELOC (Home Equity Line Of Credit) and reverse mortgage balances have reached unprecedented highs in June, according to latest figures from the Office of the Superintendent of Financial Institutions.  The balance of HELOC debt nationwide was at a record $302.23 billion in June, having grown by 5.37% year-over-year. In recent months, this loan type has been seeing renewed acceleration in growth.  The 12-month increase is ‘almost twice the pace of growth seen during the same month last year… [although] the growth rate is still below the peak seen in 2017,’ Better Dwelling explained in its analysis of the data.  A vast majority of loans secured by real estate was for personal purposes, OSFI records indicated. This segment accounted for $269.06 billion of the June volume, 0.19% higher month-over-month and 3.90% larger annually.  Business loans secured by residential real estate had a proportionally much larger 19.12% annual increase, reaching $33.17 billion in June. This was also 1.66% higher than the month before.  Meanwhile, Canada’s reverse mortgage debt reached a historic peak of $3.74 billion in June. ‘This represents an increase of 26.3% compared to the same month last year. That works out to over $778.9 billion in reverse mortgage debt added over the past year,’ Better Dwelling stated.  And even though growth in this product type has been slowing down, borrowing among Canadian seniors ‘is still one of the fastest growing segments of debt’.”

Always question before spending. Maybe wait a day before buying expensive unnecessary things as you may not want it as much after the immediate desire to buy it has passed. I read once that 30 days after buying things like cars, clothes and other things of an expensive nature, that the initial thrill or high was gone and the realization of owing more than it was worth started to set in.

Real estate will serve you well over time and that is where a large portion of today’s wealth has come from. We are always available to discuss setting yourself up for a bright future.

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