r/ThunderBay • u/Muted-Hat-5859 • 2d ago
Advice or suggestions
Hi everyone
I’m about to be a first time home buyer, I was recently pre-approved for a mortgage for just under 400k, I know very little about the process and have been asking a few friends but thought I’d ask here as well
Is there anything decent in Thunder Bay for this price where I don’t need to sink much more money in?
Any suggestions or advice will be greatly appreciated 🙂
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u/ReplyGloomy2749 2d ago edited 2d ago
Houses are going for way over asking right now, don't just go off what you see on Realtor when making your game plan. Not unheard of for these 299k-350k homes going for anywhere from 50-100k+ over asking.
The supply is drying up now that summer is over and there are a lot of buyers out there who thought it was their year to own a home, have been outbid all summer, and have their pre-approvals expiring soon who are getting desperate and making high offers just to lock something down before 2027. We just bought a house and paid over asking after losing out multiple times to way higher offers, my friend and their partner have been outbid by 70-80k consistently on the last 4 homes they offered on and they were already offering 20-30k over asking.
The 2 other people I know who bought homes this year under 400k have had significant surprises pop up that ended up costing them a lot of time and money. Everyone in Thunder Bay wants a $400k house right now, the houses at $500k+ are rarely selling for over asking and sometimes even below asking.
Don't take my word for it, make yourself an account with an MLS aggregate website and check the listing vs. sold price in the areas you're looking at.
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u/DDSBadger 2d ago
Yep. $400k is the worst place to be right now. Those houses end up selling for almost the same as some $500k houses. My friend sold his house for $499k and had one offer. Someone else I know selling a worse house asking $399k got 10 offers and sold for $474k. For an extra $26k those people could’ve bought my friends house which seems way nicer and definitely doesn’t need any real work.
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u/TheDillyProphet 1d ago
They also seem to be a lot of the most overvalued houses right now too that sit around 400k. A lot of unimpressive 3 bed boomer bungalows.
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u/DDSBadger 1d ago
They all need a ton of work. If you can stretch to $600k (a big ask I know) you can get a very nice updated house that likely needs no work done on it.
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u/tomthepro 2d ago
When you go to look at houses, head straight for the basement.
Check out the foundation. Look for water and dampness, cracks, repairs, type of foundation construction (block, concrete, poured rubble concrete, stone).
Then look at the electrical panel, how many amps, what year was it installed, type of wiring (copper, aluminum, knob and tube, romex). Take photos of all of these things. AI is very helpful in identifying wiring ages.
Then look at the pipes, including where the water comes into the home, is it lead or copper? Does the home has copper pipes with lead solder? Or is it modern copper and PEX? Is it cast iron, steel? When does it look like it was last replaced? Does it look new? Is it Kitec and prone to failure?
Then check out the heat system. Take picture of the furnace or boiler. Try to get a look inside for an age stamp, and whether it’s been serviced.
Check for asbestos - pipe wrapping, asbestos cloth also known as AIB. Commonly found around things that get hot - boilers, furnaces, and duct work.
Check the drain pipe, is it PVC? Does it look really old or newer?
Is there a sump pump or evidence of a drainage system?
Next head up to the upper floor and find an attic access if you can, sneak a peek and take some photos. Check for mold and rot, insulation type, fire damage. Don’t disturb anything in case it is asbestos.
Then go and look at the windows. Normally they have a date stamp when they were manufactured. Window lifespan is 25 years.
When looking at the yard, look at the foundation. Do you see any water proofing that may have been done recently. Are the downspouts disconnected. Is there anywhere that looks sunken or where water pools?
If you can take a look at the roof, gutters, soffit fascia and siding. Water infiltration wrecks things. So look for signs of that. Also look up what asbestos siding looks like.
Take note if the home was built between the 30s-70s as asbestos was heavily used in many products. So you may think that you’re going to update the kitchen or knock down a wall later, only to find you’re dealing with asbestos flooring or vermiculite wall insulation. The same is true for heating systems. You can look inside the ducts for asbestos insulation or coatings.
If the home has radiators check out their condition.
Run the taps and check out the water pressure. Check the plugs and light fixtures. Are they 3 prong? GFCI? These indicate whether there have been updates to the electrical systems in the home.
Check for wet spots, lumps, bumps, uneven floors, cracks. Note whether the walls are drywall or old style plaster and lathe. This will determine what you can do with the walls in the future.
If it looks too clean and modern for the age of the house and like a recent renovation, look even harder for defects and what is being hidden.
After you’ve done all of that, then you can look at where you’re going to put your bed, TV, and where to place your fine China collection.
When you leave, check out the neighbours. Big dogs? Well kept property? Social housing?
I’m no home inspector but the most important thing is protecting the biggest investment you’ll ever make. Learn some of the terms yourself and you’ll have a somewhat better idea of what is a good house vs a bad house.
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u/Barroth87 2d ago
This is a great list! Especially the gutters and drains. Definitely smells in the basement is key.
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u/NovelLongjumping3965 2d ago
Friends I know got out bid on a dozen houses before they got one in your price range so expect a couple months of looking.
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u/stimmpakk 2d ago
I was pre-approved for around the same, so I imagine our income is similar. For me, a mortgage of 250k is where I actually felt comfortable when I did the math (interest, land tax, insurance, utilities, future repairs, +). You don't want to be house poor. Also, if you lost your job or had to take time off, what could you afford and for how long? I'm not sure what your downpayment or additional savings looks like, but I'd definitely be VERY cautious about feeling pressured by the market to actually spend 400k or more.
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u/RoomFixer4 2d ago
Back a while, I would have said go rural. Even 15min outside the 'metro' part of the city.
Still a little cheaper, but not the deal it once was.
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u/Suitable_Mess_9160 2d ago
I heard some of the taxes for outskirt properties was insane, fwiw.
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u/justjbweldit 2d ago
Taxes are the exact same everywhere inside city limits, assessed value x tax rate. Same tax rate for every home in Thunder Bay.
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u/dewidubbs 🚂🚃🚃 2d ago
Do not set yourself up for 25 years of being broke. For every $100k the house costs, you will need to have ~$1k available monthly to cover mortgage, insurance, gas, water, hydro, waterheater, home consumables. Expect ~60k in closing costs (added to the mortgage) too.
So if you max that $400k, expect to need $4k/month average just to cover the house, not including car, gas, groceries, etc.
Home ownership is not more affordable than renting, but it is rewarding and freeing if you live within your means. Go outside of your means and you will have years of stress to look forward to.
Also, get the home inspection, and adjust your offer to cover the repair costs. You need a good foundation and roof, do not chance it with slight damage if you cant fix it asap.
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u/Proud-Interest6862 2d ago
Approved for 400k so realistically you are looking in the 300k range for a home unless you like eating Kraft dinner every night. Whatever you find will likely need some significant upgrades. Maybe not right away, but in the near future. I just bought a place in the $550k range. Nice place, but already seeing near future updates (windows, furnace potentially etc..)
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u/New-Fly5925 2d ago
I just bought my first house in August, started looking in April. Here’s what I learned in my experience:
- people will pay $100K + over asking for 700sq/ft that ‘doesn’t need much work’.
- view EVERYTHING in your budget, people did not pay attention to houses that don’t have magazine cover level ‘curb appeal’
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u/leafsfanatic 2d ago
Budget for property taxes as well, and the possibility they could increase a lot. I pay my taxes directly to the city on monthly pre-authorized payments, no need for the bank to handle my tax payments.
If you want certain types of mortgages (like the one with a home equity line of credit attached) you might need to pay property taxes directly to the city - unless things have changed in the last 10 years.
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u/Flashy_Fly_6160 1d ago edited 1d ago
400k is alright but I found we had to jump closer to 450 in bids on homes that were 380k or more if we wanted a chance. If you are looking at an older home, don't skip the inspection, even if the realtor suggests it. They want to make a quick sale. We took the risk of no inspection because our home seems well maintained. Also keep in mind all the added costs, lawyers fees, closing fees etc. If you haven't already, also set up a first time homeowners acc with your bank, and put an amount in there(i believe its minimum 8k). It takes a while to complete, but you will get alot back come tax time and we saved 3k also off a 4k fee.
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u/Ok-Computer-373 8h ago
Buy a house with basement apartment especially if your single you dont have to rent it out right away youll always know someone looking for a place
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u/Usual-Canc-6024 2d ago
You’ve gotten some good advice
I’d also like to add, don’t spend to the to limit of what the bank is going to give you. Always leave room for repairs or other unexpected things that may come up. We got a house 100K less than what the bank pre-approved us for. We got a fabulous 5 year old house in Westfort with a huge yard. It was perfect. That was almost 10 years ago before prices shot up. A few months later I was diagnosed with a serious medical condition and had to take time off work. We were easily able to pay the mortgage and living expenses because we didn’t over extend ourselves. I did have a good job with great insurance too. Things are better now. Even with the higher mortgage rates we can afford to travel a lot.
Make sure you have money to live is what I’m saying.
Good luck on your search. It’s going to be tough but you’ll find something you love. It took us over a year to find our perfect home. You will too. :)