A life changing decision – moving to Alberta
It was 6 pm and we had just finished our goodbyes. Our daughter Freya was lured away by Grandma with promises of chocolate to avoid any tears. One last check. Tires, headlights, trailer and snacks… we were ready for the road. It was time to start our fourteen hour drive alongside a bunny, two cats and two dogs. Excited and a little anxious we were ready for the next chapter in our lives, we were moving to Alberta.
Why would you ever decide to leave Vancouver for Alberta?
A few months before we were looking at buying our first home. With a growing family and pets we knew we likely needed to find a house. We researched all over BC and very quickly narrowed our search down to Chilliwack, Hope and Mission. We were hoping to find a house with a big yard while being relatively close to schools and grocery stores. It became clear to us very quickly that any attempt to have a budget was out the window. It was all about how high we could push our maximum purchase price and how quickly we could act. On top of this, we realized quickly that we had to narrow down our needs and eliminate most of our wants.
As a mortgage broker and a single-income household I was worried about the possibility of rising rates and declining income. We knew that if we got into financial trouble we were on our own and that family would not be able to help. Quite a few nights I lost sleep thinking about the real estate market values dropping due to rising interest rates and my income vanishing at the same time. Having worked with well over a thousand homebuyers before I knew I was not alone.
The timing of the market was against us
On top of our concerns, the market kept rising, by the time we were ready to write an offer (the joys of being self-employed and waiting to be able to file 2021 taxes) the market had gone even crazier. Now we were forced to choose between stretching ourselves even further financially or purchasing a home that needed a daunting amount of work.
If you don’t like your cards change the game!
One night my wife Karoliina and I were chatting and we decided to expand our search. We began to look up properties around Edmonton…what a difference, the genie was out of the bottle.
How to buy a property in Alberta
We began to ask questions, research our options and build a team of professionals to support us.
After a week of digging into the details we had made a few discoveries.
What we discovered about buying a home in Alberta
For less than half the price we could find a newer home on an acreage. Instead of looking at a house in desperate need of work on a 5000 square foot lot we could find beautiful homes on 200,000+ square foot properties.
Balancing the property, home, location and access to reliable internet was tricky and we learned as we went discovering the different types of rural internet available, well vs cistern water systems, and each county’s unique zoning bylaws. We eventually narrowed down our search and ultimately found the perfect property.
Taking action, writing an offer on a home
A 1976 bungalow surrounded by trees on a ten acre lot (for less than an old town house in greater vancovuer!). We wrote an offer on a property (having an exceptional realtor made a massive difference) and the seller accepted our offer.
The due diligence when purchasing a new home.
It was time for our due diligence and we were going to go overboard, we had asked for twenty days for conditions and we planned on using it.
How a general contractor can help with your new home
We had an incredible and trustworthy general contractor walk the property and provide his opinion on the repair records on the home. He was able to help us understand the cost and timelines of changes as we explored the property.
Working with a Real Estate Lawyer to buy a home or acreage
With the help of one of the best real estate lawyers in Alberta we went through the real property report and a few items on the properties title report.
How to work with a property inspector when purchasing your home
Our property inspector spent almost five hours combing through the home and providing us with a thorough and detailed report of the home, well and septic field. He then called me and spent thirty minutes verbally breaking down the inspection.
How a quality Realtor can help you make an educated purchase
Our realtor helped with more than making sure our purchase contract was correct and negotiating with the seller’s agent. Once we had a property in mind he pulled a detailed list of comparable properties and assisted us in evaluating the value of the land, the home and the other structures. We were able to do this through a comparison approach, we looked at other properties that had sold, broke down their value by location, size and the structures on the property.
The extra due diligence we did with our new home
We requested all of the maintenance and work records from the seller. Using this information we review what work had been done and then called the service providers asking for details and notes on the property (well, septic, roof ect).
We also called the city to confirm that major work had been completed with permits and to get a solid understanding of how we could potentially subdivide the property.
If you have kids you will also want to look into the rules are school buses and school catchment zones. In our case we will have the choice between two sets of schools and access to a free school bus.
Finding internet for rural properties and acreages
A special mention when buying an acreage – beware of the optimistic internet provider, we called five providers who all promised they could provide internet. After weeks of back and fourth only two could provide internet and at a third of the speed they initially offered.
We felt in control, had time to review all of the details with our team of experts and ultimately asked for a small price reduction to cover some of the work we needed to do on the property. A ten acre yard with our own personal forest, a house that was twelve minutes from the city, minutes from the elementary and high schools was too much to resist, we took the plunge, removing subjects.
How to get a mortgage on an acreage
I joked with Karoliina that I would deal with the mortgage and she chould handle the packing… it didnt go over well. Apparently if you do something for a living it does not count! For our purchase we chose a readvancable mortgage (has a home equity line of credit that grows as we pay off the mortgage) and to a fixed payment variable. We expect the property to have some expenses come up so access to capital is important for us. This allows us to pay off the mortgage aggressively knowing we can borrow back some money if needed.
The fixed payment variable was important for me as a mortgage broker as my income can fluctuate with the market. Anyone who has income that varies but does not want a fixed rate should consider VRM (fixed payment variable). Often monthly payments are the better choice as well, here is a break down to why. We will use our prepayment priviledges to make sure we do not significantly increase our long term borrowing costs due to the VRM product. Learn more about the hidden costs of variable rate mortgages here.
Lending on an acreage has a few quirks. The size of the property matters with lenders. Many lenders would have only valued the first 5 acreas of the property forcing us to increase our down payment. Instead I chose a lender that values up to ten acres. More than ten acres gets trickier but we do have lenders that consider larger property sizes.
If you have any questions or need help let us know.
Waiting for the keys to your new home
Now we had to hurry up and wait. Our closing date was over two months away and we had a lot to do. Finalizing our mortgage, securing home insurance, packing, planning the move, the list went on and on! The months blurred by and next thing we knew it was time to move. We had a lot of fun teasing our two year old, she was very confused and excited when mom and dad said we were all going to live at the dog park.
It was time to move
After two days of packing we jumped into our truck, waved goodbye to our family and set off for our new lives.
We have moved to Alberta, now what?
Its our fifth day at our new home and we couldn’t be happier. We chose to trade to warm winters and expensive real estate of Greater Vancouver for an affordable home and cold winters (there is also over 400 hours of extra sun in Edmonton per year). Being a numbers person, I crunched the numbers and it looks like this choice will lead to being financially independent fifteen years faster (due to a more manageable mortgage and lower monthly expenses). I am keeping my mortgage license in Vancouver (my business partner Scott still lives there as well and thinks I am totally crazy for moving) and getting my mortgage license in Alberta as well.
Everyone keeps asking how we will survive the winters, I’ll have to get back to you on that one but we just couldn’t justify the the heating bill for a warm, raining winter in Vancouver!