Strategic Home Buying
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NEW: A Special 2010 “Strategic Home Buying Update” on the Lowest Canadian Mortgage Rates. Learn what the banks don’t tell you about qualifying for Mortgages on your terms, both rates and loan amount”, by Shane Melanson
“I’m 100% convinced that learning how to buy a home properly (obtaining your mortgage, negotiating the purchase price, getting a home inspection, searching title) could have the largest positive impact on your future financial health…”
Shane Melanson 2007.
Dear Home Buyer,
If you are interested in buying a home, to increase your net worth and achieving financial freedom through home ownership, then you will want to read on.
As a Calgary mortgage broker and Realtor, I’ve helped hundreds of Calgarians over the past 7 years.
This website was created with mission to inform you of the right and wrong was to buy a home.
Why discuss the wrong ways?
In my experience, only discussing the right way to do things leaves buyers and sellers with only half the information they require to protect themselves. In the real world there are people who are not honest and can take advantage of the less informed.
This is why you will find a fair bit of information that discusses common pitfalls and real estate scams that are common.
Something to consider- wherever there is potential to make a lot of money and in a short amount of time, you will find people looking to take advantage of this. Simply put- human nature is to want more and do less.
Real estate is a perfect vehicle for attracting lazy people. The problems is, making money in real estate is not easy and buying a home or selling a home is not a simple- do this and do that and your done.
There is a reason why 30 year veterans in the business still take real estate courses.
I believe to truly protect yourself in buying a home there are few critical Success Factors:
#1) Learn the basics of the transaction.
Meaning, you should understand at the very lest what is involved in buying a home. There are numerous online resources for this. You can find most at Strategic Home Buying and links to others I trust.
#2) Work with honest, smart and successful service providers.
I have done businesses and bought homes through friends that were Realtors, got Mortgages through a buddy who was new to the business. Simply put, in most cases, they were not the best service providers for my needs and I paid for it.
If something goes wrong (in real estate high degree chance) and you are working with a new Realtor or Broker, or friend who is not closely watching the transaction- and something unexpected comes up- expect to pay for this mistake 1 way or another.
My suggestion- work with the experts. This is business and in my view it is not a place to hire a buddy and hope he does a good job.
#3) Have a clear outcome/result before you buy or sell real estate.
Too often would be buyers or sellers come to me asking for advice. The main issue, they have not considered what they really want and why.
By knowing what it is that you want and why, you will save yourself potential for disappointment and mistakes. Once I understand your motivation for buying, then I can recommend a clear course of action (the how).
Quick example- Renters looking to buy, say the #1 reason they want to buy a home is to lower their current monthly expenses.
Problem: Owning a home in Calgary (including additional expenses of Taxes and Insurance) is typically 30-45% more on a monthly basis than renting.
Just by having a little information- like what it will cost you on a monthly basis for a mortgage, how much you spend now and what you can expect helps potential buyers.
If your goal is to build equity and start living on your own terms (not have to answer to a Landlord) then buying a home is more in-line and would justify sacrifices of paying more on a monthly basis..
I feel it is critical for a mortgage broker and Realtor to do more than just qualify a client and collect a commission.
I value conservative, safe, planned, strategic home buying (why I named the site). Which means that I look at what is going in the market and determine what are the best options for a buying a home- using a more macro scale.
A few things I look at:
1) Are interest rates going up or down? If Interest Rates climb, house affordability goes down which means that pries of homes tend to come down.
2) Is Calgary generating new jobs? New employment in Calgary and Alberta means demand is going up and thereby increases the value of a home.
(Aug 2010- job losses in Alberta are still climbing and Net Migration is negative- people leaving Alberta in search of cheaper places to live).
3) How long do you plan to live in the house?
Transaction costs of buying and selling a home can be quite high. In most cases when the market is appreciating the average 2-3% year, buying a home and selling in 18 months are less will probably cost you money (after Realtor and Legal fees).
Fundamentally, I ask you why are you buying or selling a home. I always stress a long term game plan. The reason- real estate is not as liquid as a stock. Sometimes it is difficult to sell a house.
So helping a home buyer or seller make the right decisions upfront can, in my experience, minimize the risks of the ‘biggest investment’ most people will make.
I am not your typical mortgage broker or Realtor. My advice is straight forward and not real flowery. I feel it is important to be given the facts and sometimes the facts and truths are not always easy to deliver.
Over the past 8 year I have been a real estate investor (in commercial and residential real estate), commercial lender, Realtor and Mortgage Broker.
So I bring a different perspective to real estate.
Although buying a home to live in is not technically an investment (shelter is a need not, therefore I view your home not as an investment)- if you are buying a home in Calgary, then there is a good chance you are looking for some Capital appreciation.
I wanted to provide you with a step by step blueprint on buying real estate.
I encourage buyers to have a solid down payment (prefer 10% and up) as it provides more exit options.
Life throws us surprises and I can tell that there is value in peace of mind. Knowing that you have more than 1 option when it comes to buying or selling and that your have real equity in a home is critical.
I cringed when I saw friends qualifying for 100% mortgages. Reason being- after the CMHC fee’s it is really about 107% mortgage. You couldn’t sell your house even if you had too (unless you’ve got $20k to pay the Realtor and the negative equity).
On day 1, buyers were under water by about 10% (7% CMHC fee + closing costs, etc).
What to do if you are interested in learning how I can help you get a mortgage?
There are few ways to contact me.
Please fill out the form on the Contact Shane Page.
The more information you can fill out the better I am able to help. I will go through your form in detail prior to calling you. I am respectful of your time and make sure that I am providing valuable insight into helping you achieve your goal- home ownership.
The part of the equation that I fill is the financing part. I no longer do residential real estate (buying or selling homes) although I do have many good friends in business that I can put you on to. To helping you achieve your goals of home ownership and freedom,
Shane Melanson
1020-1st Ave NE
Calgary, AB
T2E 9C6
1800.931.7497 Ext 333- 24 hours, for FREE recorded message
Picture: Bankview, Calgary AB- From the balcony on the day I sold my family’s 1st condo. We later bought our dream home in Patterson which over looks downtown Calgary!
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