How A 33-Year-Old Vintage Seller Bought His $485k Hamilton, ON Home

This month: A 33-year-old vintage furniture store owner with a joint income of $140,000.

Location: Downtown Hamilton
The home: A 3 bed, 2 bath, 1250 sq. ft. home built in 1910. The house was last updated in the mid-1980s and in need of some upgrades to the floors, electrical, and appliances. It has a front yard, covered front porch, back patio with hot tub, and rear laneway access big enough for two parking spots.
When I bought: March 2021

What I spent: $485,000
Downpayment: 20% at $97,000 (My partner contributed 88% and I contributed 12%)
Mortgage payment: $1,300 monthly (Split 50/50)

How I bought it: My partner has been planning on owning a home for a long time, and he has been actively saving towards that goal since 2015. (He paid off around $90,000 in student debt in 2016, by putting $1,000 to $2,000 away a month into savings and his RRSP, applying to scholarships, and living with family friends during his bachelor's and master’s degrees.) He’s worked with a financial planner since 2004 ,who helped him invest his money and started contributing to a Tax Free Savings Account (TFSA) while he was still in school.

Once he paid off his student debt and moved to Hamilton in 2017, he started saving towards a home, putting $1,000 a month into a TFSA. The pandemic also meant that we were both saving a ton just by being home. As for me, I saved the majority of my portion over the last year. We had a trip booked for Greece (which would have cost around $6,000) that was cancelled and we would have done a lot of travelling and spent more money if we were able to do stuff out of the home, so basically all my living and entertainment budget just went into the bank. When it came time to buy, we dipped into our RRSP and used the full $35,000 available for first-time home buyers. This gives us two years of loan forgiveness and 15 years to pay it back. 

We decided to have only one of our names on the mortgage and the title of the home. Because we’re not married, we had a cohabitation agreement drawn up by a lawyer to in the event of a breakup. The legal agreement outlines that we've agreed to split any home related costs 50/50 and are  each entitled to 12% and 88% of the home value at time of resale — the percentage each of us put into the down payment — or have the option of buying the other party out for the same percentage. 

Why I bought it: After a few years of tire-kicking we finally made the decision to try and buy something during the pandemic. My partner and I had both been renting for the majority of our adult lives. The last place we were in (a two-bedroom, two-bath semi-detached house in downtown Hamilton), cost $1,950 a month. We were there for about a year and a half. During that time, we made a list of wants and needs for a potential house: downtown so it was walkable, minimum two bedroom and one bathroom, original character. We set a max budget of $500,000. Being Hamilton locals and first-time buyers, we didn't want to overpay for a house and decided to not get into a bidding war, meaning we’d just walk away and keep looking. The price of homes was increasing very quickly. [For context: In May 2021, Hamilton was ranked the third least-affordable housing market in North America, ranking higher than cities like New York and Los Angeles]. 

How the deal went down: When we started looking in January 2021, we didn't have a realtor. We were contacting listing agents directly and making appointments with them. We made this decision because my parents — who were in real-estate mortgaging — and my older sister had all previously bought their homes without buyer representation and said they knew enough about buying a house that we didn’t need an agent. But they also haven’t bought anything in years, so the market is way different.

I wouldn’t suggest doing this in today’s market, because realtors really don’t like it (they think it’s unethical). More often than not, we’d contact the listing agent and they’d forward us to another agent in their firm and try to get us to sign a deal with them; so the firm was double-ending the deal (trying to get commission from both the seller and the buyer). We had one woman who refused to show us the house until we signed for representation with her colleague!

During this time we were using the Realtor app and Zolo to track the market in Hamilton and educate ourselves on what things were listing at, how fast they sold, and what they were selling for. Zolo has a "recently sold" feature which is amazing; I would highly recommend it for anyone looking to buy, to get a sense of what the market’s like and to see what areas you can afford within your budget. It also gave us an idea of how much an updated versus un-updated home would go for, which helped us factor in renovations into our total cost. After battling the system for about a month, we eventually decided to use a friend to represent us, and that made things easier. Most of what we looked at was priced at $399,900 and selling for about $600,000, which was very discouraging and frustrating, especially as we were looking in the winter, during a pandemic when inventory was at an all-time low, and buyers were at an all-time high. The week we saw the house we bought there was a small spike in inventory in our price range, so we set up appointments to see six houses in one day. (This is super tiring and we definitely had house fatigue!)

For me, what really made our house stand out was the barn-shaped roof. In comparison to the other homes we were looking at, the lot is pretty big as well, and it had a hot tub, which we wanted. We loved it, but the home was listed at $479,900, a price we didn't think we could afford. Regardless, we put in an offer of $480,000 and, by a miracle, there was only one other offer on it. We got a call back that we had the best offer and if we could go up to $485,000 we had a good chance of getting the home — so we did. Then we got another call that we had the best offer but the seller wouldn’t accept it because she was expecting to sell for around $520,000 or more. Eventually the listing agent reduced his commission so the seller would take the deal, and the house was ours! 

We’re pretty much renovating the entire house except the basement (this was factored into our home buying budget). Our initial budget for upgrades was $10,000, and now we’ll end around $15,000. We had to put in central air right away (for around $2,700), and the rest of the budget will go towards redoing the floors in the kitchen, redoing the bathroom, painting the interior of the house, new kitchen appliances, and any extra surprises. My mom and I are pretty handy, so we’re doing the majority of the work ourselves. 

What I wish I’d known before I bought: We had a condition on our offer for a home inspection, but removed it to compete with the other offer, which didn't have any conditions. We did this after being assured by the listing agent that the house had fully updated electrical in 2011 and all knob-and-tube wiring was removed. After we started renovations, our electrician discovered that this wasn’t true; most of the second floor wasn't updated and did still have knob-and-tube. We have it in writing from the listing agent that it was updated, but in hindsight I would have asked for confirmation or proof of this, either a certificate from the electrician who did the work, or a letter from the previous homeowner. We opted to update the wiring on our own (which goes above and beyond our initial reno budget), but are pursuing action with the seller via our agent and real estate lawyer to see what we can get recouped.

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