You know how it’s easy to look at another person’s situation and be emotionally removed from the decision making? I face that regularly as a financial coach. Money isn’t always about the numbers. There are strong psychological pulls that sometimes make it difficult when it comes to making our own financial decisions. While I can emotionally remove myself from someone else’s decision, I can’t always do that with my own. I suppose that’s also why lawyers don’t do their own wills and doctors go see someone else when they’re sick.
I’m also prone to over analyzing things and not one to make a big decision on the spur of the moment. I love helping other people process their financial decisions. When it comes to making my own, I occasionally get stuck.
This is a two part issue.
Part 1: Should we buy a house if we’re only going to live there for 5 years?
I live in a beautiful small town. I love it here. I’ve got friends and family nearby. My parents live close by and help out with baby-sitting. We live in a beautiful small house in a great neighborhood and the kids, one of whom has some special needs, are in a great school. If it were up to me I’d retire here.
Brian is in the last year of a PhD. I’ll be doing a happy dance when that’s over! He has been offered a 5 year contract in another city. It’s a great starting position and one from which he would like to transfer out of and into something different after the 5 years are over. The contract is in the Toronto area and frankly housing is WAY out of our price range for what he’d be making on a starting salary and I’m going to have to find a new job.
Our only hope would be to find a small townhouse in Pickering or Ajax and commute in from there. Neither one of us wants to live there long term. No offense to anyone who calls that area home. We just prefer smaller cities.
Renting a 3 bedroom place in the GTA is astronomical. Should we:
- Rent and live off the equity from selling our house?
- Buy a small townhouse outside the city limits at about the same price we could sell our house for?
- Stay here and have Brian rent a room in a house during the week and commute home on weekends?
- Other ideas you might have?
Part Two: If we did sell our house, should we sell it to a friend?
I’ve been doing some research on the pros and cons of using a real estate agent or selling privately. Just when I thought for our case we’d use an agent, because we want to sell quickly and it’s a ‘starter home’ my best friend approached us as asked if we’d consider selling privately to her.
There goes all the disadvantages to selling privately.
- takes longer to sell
- harder to advertise
- can’t have it on www.mls.ca which is the #1 way Canadians find a new home
- hosting your own open houses
- negotiating yourself
- difficult when selling a ‘starter home’. The seller pays all the real estate fees there there are few advantages to a first time buyer not using an agent.
Suddenly, if she can get the financing, we have a buyer without any of the hard work involved in selling our own home. We can split the savings on the real estate fees we didn’t pay, and both save money in the process.
Is selling to a friend or family member a good idea? Money and friends don’t usually mix but if we get the offer approved through lawyers and we’re both happy with the price, is it a wise move to make? Are there potential pitfalls we should be concerned about?
So, what are your thoughts, should we move and if we do, should we sell privately to a close friend?
Kathryn works in public relations and training for a non profit. In her off hours, she volunteers as a financial coach helping ordinary Canadians with the basics of money management. Her passions include personal finance and adult education. Kathryn, along with her husband and two children live in Ontario.