We showed her the market analysis that was completed on her house and then showed her what we thought a fair market price would be based on the information the real estate agent guy showed us (about $300,000K on the open market - if her home was ready to be sold).
As there is an expectation that my great aunt will leave her home the way it is when she sells which is NOT move in ready. Renovations would be required as would a lot of cleaning to get rid of the smoke, we started with a range of $250,000 - $275,000, we talked about what Jordan and I could afford and what my great aunt was expecting in terms of the sale of the house. My Great Aunt told us that the range we were thinking of was the same range she was thinking of. She suggested a number in between, so $262,500.
She asked us if we could make that work, and we said it would. We asked her if it was enough money for her to either buy a small condo for herself, or to give her enough money for rent in an assisted living place (she's exploring options right now). She said that it was absolutely plenty. She has three healthy pensions as well as a variety of personal savings - she doesn't need the money.
Throughout the entire conversation, I sat next to my Aunt and Jordan sat across from us. It was important that we didn't overwhelm her by our posture/eagerness. As hard as it was, I didn't talk throughout the whole conversation and questions to engage my Aunt.
Jordan and I went in the conversation knowing that if my Great Aunt wanted over $300,000 or so - it probably would have been a deal breaker - because although her home is in a very desirable neighborhood, you can get a brand new townhouse for about $350,000. If that was the case, we were fully prepared to still help her on her search for her next home when she's ready and help clean up her place (as best we could w/out investing our own cash) to get it ready to sell. I think knowing that we didn't HAVE to come out of the conversation with a price or a deal, really made it easier to have a great conversation - and, it wound up working out, because we do have a price.
So, we know what the price will be, what we don't have is a set timeline but we are looking at a range of 8-18 months.
I am a lifelong Calgarian, so I know the market. Regardless of the condition of the house and any needed repairs / renovations, I believe you just got yourself the deal of the decade. You will be getting a good size lot. Judging by the age of the house in the photo, it appears that you would be in a community with driving distance to downtown of no more than a 15-20 minute commute (if that)?
ReplyDeleteTo compare to a new build townhouse in the neighbourhood - you have to also remember that with a townhouse you are only getting the structure, not the land. Plus the added monthly condo maintenance fees, my guess would be at least $250 - $300 per month at minimum on top of the mortgage itself.
Like I said, deal of the decade.
Further to what I just wrote above, I want to stress that my comment was only with respect to money value of the land and house. Of course I have no idea about the family relationship and support dynamic which cannot be quantified. I am only commenting strictly about the dollar figure of the proposed sale amount!
ReplyDelete@ Anonymous - thank you for your comments!
ReplyDeleteJordan and I know that we are truly lucky to have the opportunity to buy her home.
An investor/developer could have easily bought it for $300-$350 and stuck two new build townhouses and sold those for $750K (just happened to her neighbors house....but I don't know the actual sale price).
This is great b/c my Aunt really wanted to help us buy our first home, and we really wanted to make sure she had what she needed when she's ready to move.
It's also entirely likely that no one would have bought her home at the realtor's recommended sale price - there's a few in her neighborhood price around $300k that didn't sell due to the state of the home.
oh - and on a side note, the townhouse's we looked at didn't have condo fees and were in the 300-350 price range.
that's great news! :D
ReplyDelete@ Financial - thank you! It feels so good to be able to start working to a concrete goal!
ReplyDelete