On September 2 2019, Canada’s National Housing Strategy’s biggest playing card hit the table in the form of the First Time Home Buyer Incentive. The program lowers mortgage costs for new home buyers by giving them 5 or 10 percent of the house’s cost. The program is available to pretty much everyone, including all Canadian citizens, permanent residents and non-permanent residents as long as they are legally permitted to work in the country. To qualify, household income must be equal to or less than $120,000, with the total borrowing amount limited to four times the qualifying income. For cities such as Vancouver and Toronto, the program won’t help many people, but here in Winnipeg where the lowest average home prices (among major Canadian cities) prevail, it’s a big incentive. Beginning next week, qualified first time buyers can submit applications to the government.
Everything above can be taken as both good news and bad news for owners of older run down homes. Let’s find out how and why.
What the First Time Home Buyer Incentive Means to Owners of Older Homes in Winnipeg
The Bad – Your Old Home Is No Longer Appealing to New Buyers
Recent news about the near record low fixed mortgage rates already had owners of fixer-uppers scrambling to sell their houses. Between low rates and low average house prices new buyers had the pick of the litter. They no longer needed to consider old properties to enter the market. But now, with the First Time Home Buyer Incentive taking effect, they can call the shots more than ever before. Old houses in lower income communities have pretty much lost all appeal and market values will begin to fall as first time buyers gobble up favorable properties that were once less attainable.
In the grand scheme of things the First Time Home Buyer Incentive appeals to the greater good, but in your neighborhood things got a lot more complicated. You may be stuck with that old house indefinitely. Or, maybe not. Keep reading.
The Good – You Can Sell for Fair Market Value if You Act Now
The scenario above is one of the reasons a service such as ours exists. We believe no Winnipeg homeowner should be stuck with a house that they find to be a burden or outright hate. We know that buyers are not interested, nor are Realtors willing to list the property, so we step in with a helping hand in the form of a mutually beneficial relationship. We will buy your fixer-upper for FAIR (not projected) market value and will pay you in cash within the week. All you need to do is act now, before fair market value drops under Canada’s new National Housing Strategy system.
Didn’t we just lay out a great solution? Yep, but there may be another. When you sell your old house for cash to us, you immediately get money to put towards a downpayment on a more appropriate home, perhaps an affordable condominium better suited to your lifestyle.
Now if you factor in the First Time Home Buyer Incentive you can really walk away a big winner. But wait, don’t you need to be a literal first time buyer to take advantage of the program? Doesn’t the fact that you own a house at the moment disqualify for you? Not necessarily.
Let’s look at the program’s definition of a first time buyer:
- You have never purchased a home before
- You have experienced the breakdown of a marriage or common-law partnership (even if you don’t meet the other first-time home buyer requirements).
- In the last 4 years, you did not occupy a home that you or your current spouse or common-law partner owned. It is also possible that you or your spouse or common-law partner qualifies for the First-Time Home Buyer Incentive with the 4-year clause even if you’ve owned a home.
As you can see, there are some loopholes here. You may simply have inherited a home (and thus are not defined as a previous buyer), or you may be coming out of a divorce. Either scenario can qualify you. Can you imagine? You can get cash in hand today for your old house AND you may qualify for the First Time Home Buyer Incentive. And if the latter comes a reality you’ll be happy to know that all types of homes are included in the program, whether a single detached property, townhouse, duplex, or condo.
In the end, it’s great to know that you’ve got options for selling your run down property, no matter what the market throws your way. It all starts with a friendly phone call. Give us a ring at 204.222.0022 today.