This makes me think of The Man of La Mancha - The Impossible Dream.  While condo dwelling is highly unlikely to be as unpalatable as living in Don Quixote’s dungeon, itmay not live up to the expectations of the carefree living the Boomer is hoping to obtain. 

When retirement finally arrives, many Boomers have plans to spend time traveling, reading, relaxing by a pool, maybe fishing and spending weeks every year at a cottage.  Having the big suburban home AND having the freedom to live the nomadic life may not be compatible objectives.  This is when the Boomer starts dreaming of moving to a condo.  Boomers were brought up to be owners.  Condos are a type if shared ownership.  Just remember, condos were not likely in existence when the Boomer was an apartment renter and just starting out on his or her own.  Some things are going to be a surprise. 

In life, there are always trade-offs and compromises.  The attraction of a condo is to have the freedom to close your door and take off for months without worrying about your home, to never have to mow the lawn or water the flowers, to have the exterior of your home maintained and to share in the costs of the common parts of the property.  The downside is:

• You do not have complete control on the costs.  The condo board and members (of which each owner is a member) vote on the expenditures.  So, if you decide you no longer will be using the pool and you know that it cost a lot of money to insure and maintain, you do not have the sole right to close the pool.  When the roof needs immediate replacing, SURPRISE, unless there is an adequate reserve fund, you too will be have to pay for the roof through a special assessment. 
• You do not get to pick your neighbours.  What happens if they are loud or play the drums, or have parties every Friday night, or cook weird smelling food?  Those neighbours are owners like you so the dispute is between the two (there is no landlord to impose rules and resolve issues).
• You do not make all the rules.  Some condos won’t allow pets or smoking or Christmas lights or hardwood floors or renovation work after 4:00PM or……  etc etc.  Those rules are written in the by-laws.  Check those rules before buying BUT also be prepared for new rules to be voted in at the Annual General Meeting.
• You do not have a landlord to check your unit when you are away.  In fact, there is no one to let you in if you have lost your keys.  Who is the property manager?  Can you get ahold of them at 1:00AM when you are locked out?  Do you have friends who will look in your unit while you are away?  Check your insurance, a vacated unit still needs to be checked to keep the insurance active. 
• You do not have control over the common elements. If family and friends come to visit, where are they going to park?  You only have so many assigned / purchased parking spots and the visitor parking will, in all likelihood, have limitations of who can park and for how long.  Hate the decorating in the lobby?  This is not something you can take over.  Want more outdoor seating?  Take it to the Board. 
• You cannot control the value of the condo.    Not only are condos subject to market forces but the value of your building or complex is going to be based on the condition of the property – inside the unit (which you control) and outside (which the owners control).  Buyers are going to look at special assessments, the engineering reports and the condition of the roof, windows, HVAC, etc.  These have not all been within our control. 

After living in a suburban home with the independence of total ownership, condo living trades some of this for additional freedoms and peace of mind for not having to be personally responsible for the property. 

Don’t tilt at the windmills.  Make sure that you see the windmill and not your dreams   

Photo credit:  Windmill

This is a story that is being repeated all over the country.  Boomers want to downsize.  This is hardly a surprise.   The surprise or even shock is that it is going to cost them money to live in less space.  To some, it is so appalling that they have decided to stay in their current home.  

Boomers own their home in the suburbs.  Most are mortgage free.  The home has four bedrooms, three baths, a family room, a rec room in the basement, two or three car garage and a huge yard full of trees and shrubs and maybe a pool.  Okay, there may be variations of this but the essence is – the boomers own family friendly property.  Now……  The kids have finished school and left the nest.  The Boomers are rattling around a big house and find that they live in the kitchen – family room space and their bedroom.  It seems that it is time to move to something smaller.

Here is the rub.  The new home or condo may cost more than the proceeds from the sale of the big home in the suburbs. What?  

1. The market has reacted to the demand for large condos and retirement homes by placing a premium on the sales price.  Remember, the Boomers are a tidal wave moving through demographic data.  If you, a Boomer, are thinking of downsizing then so are millions of your fellow 1946-1964 birthday buddies. Simple supply and demand economics at work.
2. Your lovely home is a wee bit tired.  Forty plus years of the same kitchen, with the wrought iron railings, pink carpet, parquet flooring and paneled rec room is telling the story.  Although you have house size you have a house waiting for updating and renovations.  Your home is not competitive.  It is not giving Buyers what they want in updates.
3. You want to move but you are certainly not going to settle for apples to apples.  Your tastes are now refined and you want granite and a bungalow backing on a golf course with grounds keepers or the whole top floor of a condo in the downtown area.  You are selling a MacIntosh apple to buy an organically grown Star Fruit.   Would you be happy buying the little bungalow down the block from your current home with the need for the same updates as your current home?  Would you be happy with the location?   No?  

After finding out that their home is not the gold mine that they hoped for, many potential Boomer Sellers make the decision to stay in their current home. In some cases, the Boomer will update the family home, adjust the buying expectations and make the move at a later time.  

Photo Credit:  UK Baby Boom and Bust by David Willets

Oh, it is tempting to see residential and condo opportunities at an unbelievable price.  For Canadians, the temptation is compounded with the strength of the Canadian dollar.  Buy or rent?  Buy or rent?  I get asked this question a lot.  Mostly these come from friends and acquaintances who have been going to Florida – Texas – Arizona for years.  I have a couple of questions just to make them think that there are both pros and cons to buying.

• Flexibility.  Buying ties you down to one location.  Do you want to travel to Europe or Africa next year?  What happens if you find that all of your friends are renting at another location in Florida?  Can you move to be near them?  
• Worries.  When you are not there, are you going to be worried about your property?  If you spend all of your time worrying about the care and maintenance of your current home then think of doubling that if you also have a home several thousand miles away.  
• Condo concerns.  If it is a condo that you are considering, take a very long and hard look at the management of the facility, the costs of maintenance, the number of full time owners versus renters.
• Rental Opportunities.  Are there real opportunities for renting when you are not there?  I know one couple was keen to buy a place and have it available all winter for themselves and then rent it out in the summer. Well, the question to ask is – If you don’t want to be there in the summer then why would anyone else?  If you want to skip a year, can you manage renting your home and having strangers living in it for periods of time.  Will they care for your things as well as you do?  
• Tax laws.  For Canadians there are tax implications if you stay in the US for longer than 6 months.  If you buy in Florida, there are tax penalties for out of state and out of US buyers.  If you rent then you have an income property and that will bring you into the tax system.  Be sure to talk to your lawyer about estate planning.  Having a property in another state or country may be a complication for the executor and for those who you hope will inherit your money.      
• Health care concerns.  Can you continue to get insurance for long periods away from your home state or province?  What happens if you get sick and cannot use your home for one or more years?  
• Value.  Has the market bottomed out and you will be getting the best possible deal?  I know people who have purchased a vacation home only to have it drop in value by $50,000 in the three years that they have owned it.  If you are buying for the long haul, do you care about the vagaries of the market?  Is there something else you would like to be doing with the money that you would be using to buy the vacation property?  
• Mortgages.   Securing financing for a vacation property is not the same as getting a mortgage for your home.  This is especially true for foreigners.  Lenders will be very hesitant to provide financing.  Most foreign buyers have to pay cash – either because they have the savings to do so or they have refinanced their home to make the funds available.  There you were, mortgage free and suddenly you have a mortgage.  Something to think about.
• Nesting Instinct.  How strong is your nesting instinct?  Do you have to paint and renovate and decorate every place you stay?  If you are renting then this is not an option.  Ask yourself if renovating is how you want to spend your winter holidays.  Maybe yes, maybe no.  If you think renovating will help you flip the property, make sure that you have a long discussion with your real estate agent about the wisdom of investing more money in the property (for resale value).  You are not always going to make your money back plus profit.

 Photo credit:  Snowy Owl

Your house is on fire….  The standard Purchase Agreement has a clause saying that the sale is conditional upon the buyer being able to get the home insured. If you have never had home insurance then start shopping for insurance (through an insurance broker) at the same time as you shop for your mortgage.  It takes time.  You want the right coverage and the right price.  Make sure that you get insured on the day of possession at 12.00AM, even if you don’t get the keys until 6:00 PM. 

You cannot get a mortgage for an uninsurable home.

Photo credit:  ladybug

Before buying your house along a river find out the history of flooding on that section of the river.  Most rivers, with residential property on the banks, have a conservation authority that established building rules (such as proximity to the bank, type of construction and plantings).  Go to the Authority and find out the flooding history.

Don’t get sandbagged into buying the wrong property. 

Photo credit: 090325-F-0681L-066

In 1997 I lived in Winnipeg, Manitoba.  The Red River flows north through the city up from Fargo and Grand Forks, North Dakota.  What a river!!!  Because it is situated on the prairies there is flat land all along the this northern part of the river.  Flooding is an annual concern.  In 1997, there were devastating floods.  Downtown Fargo was under water.  Millions of dollars was spent saving lives and livestock.  The military in both countries came to the rescue.  Sandbagging, that hard back breaking work, was carried on day and night. 

It is my hope is that the snowmaggedon of winter 2010/2011 will not result in a repeat of the flooding.

Today there are 125 residential listings of $1,000,000 or more.  In fact, the prices range from  $1 Million  to $9Million.  Of the 125 homes, 26 are priced at $2 Million or more. 

Almost all homes are in the defined Ottawa Real Estate area (there are a couple of listings outside of this area).

There are:

•   1 – 1 1/2 Story Homes      
• 71 – 2 storey
• 15 – 3 storey
• 32 – bungalows
•    1 –  High Ranch
•   3 – other
•   2 - Split level homes

The number of bedrooms range from 0 to 8.  Most of these homes have 3, 4 or 5 bedrooms. 

One home has 9 bathrooms.

As your Buyer’s Agent, I will:

• Give you 100% loyalty to your interests at all times throughout every stage of the transaction
• Promptly respond to your phone calls and emails – before, during and after representation
• Explain/discuss what to expect during a home search
• Provide you with an explanation of what your costs will be
• Assist with mortgage preapproval – whether that means referral to a qualified mortgage lender or assist with answering questions about the mortgage preapproval process
• Show you properties that you request to see or that I help select that meet your criteria
• Disclosure and discuss aspects about the property and its characteristics even if it means that you will decide not to purchase the property
• Talk to you about Condo Board or Home Owners’ Associations requirements and restrictions. 
• Provide advice and consultation on a negotiating strategy
• Work with you on coming up with an offer price based on current market conditions and sold comparable properties
• Negotiate on your behalf to get the best price possible
• Provide you with a list of referrals for licensed home inspectors, home stagers, lawyers and mortgage brokers
• Attend the home inspection and help you ask questions
• Negotiate with the Sellers and Listing Agent on issues raised at home inspection – whether it be a request for repairs or re-negotiation of price
• Assist with meeting requests of the lender during the loan approval process
• Provide you with an explanation of the closing process and what to expect
• Give you information regarding service providers (gas, water, electric, cable, etc.) so that you can make necessary arrangements prior to move
• Coordinate follow-up visits and inspections, if additional work is required, scheduling and attending the walk through prior to closing
• Attend any meetings you request at the closing and provide you with assistance, if necessary, with issues that come up at or prior to closing

I will visit you in your new home, get the tour and see how you are settling into the neighbourhood. 

I will come to your housewarming party!

Photo credit:  DSC_0831

This list has been reviewed and modified from a posting by Christine Smith , a Buyers’ Agent in Canton MA.

I have to tell you that this is one of my favourite rants.  You, the Buyer, are looking at a home to buy and there is a wonderful tub in the bathroom.  You see yourself with candles, soft music and bubbles.  Now you need to know if you fit in the tub. Are you kidding?  Do you try out the toilet to see if your a– fits on it?  At the very least, DO NOT try out the tub with your shoes on.  Would you do this at your home?  What are you thinking?  You could leave behind scratches, marks and ruin the acrylic.  Get out of the tub, for pity sakes! 

You may be marking your own territory if you decide to buy.

Photo credit:  Mmmm soaker tub

Buy where you want to live.

One condition that may be in the terms of a mortgage is the ability to put down money, without penalty, during the term.  This is called a LUMP SUM PAYMENT.  The mortgage condition will say something to the effect that the Borrower can make a single payment annually that is not part of regular payments.  The condition will likely restrict the amount to a percentage such as 10% of the principle. All of the money will be applied to reduce the principal.

 For example you have just received a $5,000 bonus cheque and a $5,000 tax return and are weighing the options of:

• new furniture
• winter vacation
• mortgage LUMP SUM payment.

If owning your home and saving money is important to the Borrower, then the best tactic is to use all or most of the bonus as a LUMP SUM payment.