6 things I’ve learned from watching home buying shows
I couldn’t help myself – I love home buying shows for so many different reasons. I love comparing Vancouver real estate to the rest of North America, and also other places in the world. I love learning about their budgets, expectations, style, and renovation reveals. And still, even to this day, I find it insane that a $200k house in a small town in the U.S. would be worth $3 million if it were located here in Vancouver. Sometimes when watching home shows, I get envious, sometimes I’m puzzled, confused, or irrationally angry … but I love them and I always come back for more.
Here are 6 take-aways I learned from binge watching My First Home on Netflix:
Men are obsessed with man caves
What is the deal with man caves? Why is this even a thing? It just seems really weird to me that men get a special space in the house that’s all their own to “get away” from their wife and children – where they can shut the door and drink beer and watch football and play video games with their friends. Where is that same space for women?! Look, I understand hobby rooms and places in the house dedicated to certain activities (RD wants an area in our condo so that he can set up an easel and paint, for example), but having a space in the house that’s so aggressively male – and only for males – just irks me I guess. And the fact that not having one can be a deal breaker to an otherwise perfect house? Come on.
Buyers believe what the banks tell them they can afford
I was constantly surprised that buyers would just take what the bank told them they can afford and that so many people spent to their maximum pre-approval. Not that there’s anything wrong with that if you’ve run your own numbers and can fit that mortgage payment (and all other associated housing costs) into your budget, but many of the buyers just said things like “the bank pre-approved us for $140k, so that’s our budget.” No. Please please please. If you’re thinking of buying a home, please run the numbers and consider all scenarios – what would happen if you (or your partner) lost your job? What happens if you have kids? Do you have an emergency fund? Are you saving enough for retirement? Did you leave room in your monthly budget for property tax, insurance, and strata fees? I’ll admit that perhaps my budgeting spreadsheet(s) are too detailed to be enjoyed by most people, but the minimum you should be doing is spending a few hours looking at your finances and seeing what you can actually afford, not what the bank says you can afford. Because the bank? They’re not looking out for your best interest. They’re looking to make as much money off you as possible.
Nobody had a 20% down payment
I think out of the entire two seasons I watched, only two buyers had a 20% down payment, and one was because he received an inheritance. As for the other buyers, some didn’t have down payments at all. But I was mostly surprised that many were going house hunting with such a small amount saved (even though they often had good salaries). It made me wonder if they even had any additional money set aside for an emergency fund or moving costs. Because if they say they’ve been able to save $4,000 for a down payment, that’s a small enough number that it makes me think that’s probably all of their savings, no?
Related: Why I don’t want to burn my mortgage
In some places, normal people with normal salaries can afford houses
The amount that RD and I paid for our condo was more than anyone paid for their house on the show in the 2 seasons I watched. It made me cry a little bit inside when one guy (who had no down payment, btw) signed the papers on a 3-bedroom house where his mortgage would be less than $500/month. Or another episode where a guy bought a 2,200 sq.ft. house for $200k. That same house would have easily cost $3 million if it were located in Vancouver!
I definitely got super envious at the housing prices – I’d love a house for $100k, thanks – but then I think about living in Rural Wherever and I’m okay with spending what we did to live in a big city. :) Lifestyle and demand and all that stuff mean that in big cities like Vancouver or Toronto or New York, normal people with normal salaries will never be able to afford houses.
Some people don’t have Realtors
Okay this one really did shock me. I didn’t realize people went house hunting on their own without representation. I’m not saying that in a snarky way, I really was surprised. I know that sometimes Realtors get a bad reputation, but not to have one at all to give you advice and protecting your best interests … I dunno, it feels like going to court without a lawyer.
In this one episode, a woman was looking to buy a house and had searching on her own for MONTHS without any luck. She was getting into multiple offer situations, often got outbid, and was extremely frustrated. Yet she kept commenting that there was no way a Realtor could do a better job than what she was already doing. Her friend reluctantly convinced her to use a Realtor, and she ended up finding her dream home with them. When you’re buying real estate, using a Realtor is free (you only have to pay commissions when you sell using a Realtor). I’ve only had very positive experiences using a Realtor, and can’t imagine ever navigating the property market without one. But of course that’s my own experience and my own opinion!
(Curious – has anyone been successful in not using a realtor to buy?)
Buying a home with someone is a huge commitment
In some ways, buying a home with someone is more of a commitment than marriage, so you better be sure that person is the right one for you! There was one episode where a couple had been dating for 7 years, but when she realized that a mortgage meant they’d be committed for the next 30 years? She freaked out and they broke up. There was another episode where the woman wanted a huge house to fill it up with future children, and the guy looked so frightened and the Realtor looked like she wanted to die it was so awkward.
I personally think it’s important to figure out what you both want (now and in the future) before you start your home search. Think about where you want to live, if you want kids, if you plan on getting married – all of the big life decisions don’t have to be made immediately, but at least openly discussing them before committing to a home could potentially save a lot of arguing, and also money. From a financial perspective, I think it’s also important how you plan on combining financing, splitting mortgage and household payments, as well as who actually owns the house (or how it’ll be split). It was interesting to see the creative solutions the home buyers on the show came up with in terms of ownership rights, and payment to the mortgage, which goes to show that there’s not one right way of doing things.
Related: Combining our finances
Anyway part of me is really glad that we don’t have cable, otherwise I’d have access to all those other home buying/house flipping shows that I’m obsessed with. :) What are some of the things you’ve learned from watching shows like this?!
Author: Krystal Yee
I’m a personal finance blogger and marketing professional based in Vancouver. I’m a former Toronto Star (Moneyville) columnist, author of The Beginner’s Guide to Saving and Investing, and co-founder of the Canadian Personal Finance Conference. When I’m not working, you can usually find me running, climbing, playing field hockey, or plotting my next adventure.