Our Home-buying Experience
Seven years ago, we bought our first house. Jake and his Mom, Linda Jenkins, were partners in their Real Estate business. Linda was representing the sellers and was very familiar with the property. It was a hidden gem, great location, with amazing potential. The previous owners had maintained it well and it was going to be a very good investment for somebody.
Jake and I were living together in a basement suite, and we were working towards finding a way to buy our first home. I had been a Dental Hygienist for just under two years, working four days a week (sometimes less depending on the availability of work). Typically, mortgage lenders would like to see proof of permanent full time employment for at least two years. The odds were stacked against us already. Jake, being self-employed as a Realtor, had zero buying potential, especially since he had no money saved and was investing everything he had into his growing business. We knew that if we wanted to purchase something it was going to be riding solely on my position as a Hygienist. Jake was always looking and had his eyes peeled for potential properties for us. Until this point, he had only been excited enough to show me two or three places, and those didn't really peak our interest.
Jake really wanted to own a place with suite potential, in order to supplement the mortgage. I secretly wished we didn't have to go that route (we lived in a basement suite, and I knew how annoying they could be), but the excitement of owning our own home was enough to calm my nerves.
Jake remembers walking in to the house for the first time and heading straight to the kitchen. He was completely wrapped up in the views of Vernon, B.C. and Okanagan Lake, it was definitely more house and a bigger price tag than we were planning to buy. He thought to himself, “This is not possible, get this place out of your head!”, but he was already becoming emotionally attached. I can remember Jake talking non-stop about this house and he showed it to me as soon as he could. As soon as I walked in I felt the very same way, excited because I thought it was so great, but also disappointed because it just didn't seem possible in the time frame we were given. But we decided to take a crack at it.
We had been getting our ducks in a row for a while now, and I had been pre-approved to borrow $380,000 based off my employment status at the time. We called Jake’s Mom and submitted an offer, and then sent it to our mortgage broker for the lender’s approval. The house was listed at $379,000.
Because Linda was the listing agent for the property, and Jake was business partners with her, we were in a conflict of interest presenting my offer. Jake needed to detach himself from the listing and have nothing to do with the negotiations entirely. We reached out to Deb SteenKamp (who is an amazing Sutton Realtor btw!!) to represent me. We were notified that another agent was writing an offer and we were going to be in a multiple offer situation. Deb asked us, “How bad do you want this house?”, in other words, we were going to have to step our offer up.
In the end, we offered $1000 over list price (that’s all we would have been approved to borrow without finding additional funds). Luckily, the seller chose to work with our offer, but the journey was far from over. We had to secure financing before subject removal, and this had us on the edge of our seats till the very end.
I had to get declaration of full-time permanent employment from my employer, and the banks had LOTS of questions about the stability and frequency of my position. I was covering a maternity leave and the hours were fluctuating. Thankfully, I had a very good credit score, and had worked hard to pay down my student debt very quickly.
In the end, I barely qualified, but White House Mortgages helped us get into a product from Scotiabank which was a high ratio fixed mortgage with 5% down cashback. We planned to use the cashback towards the costs of the basement suite conversion.
This was a very risky situation, and not one that Jake would recommend to most first-time buyers! We knew it felt right for us and we were willing to work this plan till the end. After five years we were able to reduce our 5.89% interest mortgage to an under 3% fixed rate.
For the first few years we operated the suite and had tenants. It was a good learning experience and assisted us financially for a while. Aside from the electrical/plumbing, flooring and kitchen we added downstairs, we have just been maintaining the house as is and repairing things as they come up. The next project we are going to tackle is renovating the back deck and stairs on the side of the house.
We're still not really sure what direction we would like to go for the future yet. Do we just live in this house and improve things slowly while we pay the mortgage down? We could look for another property to move into, and then rent out our current home. Or, live through a full reno and sell for as much as we can?
The options just don’t seem clear to us, and we actually really like living here!!
Although the process we endured to secure the house was risky, we highly recommend investing in a well-maintained older home (especially as a first-time buyer). The potential can be huge if the location is right and the improvements you choose to do are desirable. We aren’t trying to impress anyone with our blue carpets and are able to live the lifestyle that suits us without having massive payments. For us, owning and maintaining older properties/cars and assets in general is worthwhile. Of course, we see the benefit of building and buying new, but not at the cost of our sanity/lifestyle. Getting our “foot in the door” and keeping our options open has always been the goal. Now that we are in the Vernon Real Estate market, we will have an easier time moving our money around and possibly upgrading to a different property in the future.
If you are a first-time home buyer and are overwhelmed by this process, don’t feel bad, we were in the same boat at one point too. I shed many tears while we were waiting for financing, and let's not mention the fact that we were moving furniture on Christmas Eve. In the end, it was well worth the effort and a wide range of emotions is normal and expected.
Hiring a skilled and patient Realtor can really help narrow down the options available for your specific goals and budget.
Happy house hunting!!