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:

  1. Rent and live off the equity from selling our house?
  2. Buy a small townhouse outside the city limits at about the same price we could sell our house for?
  3. Stay here and have Brian rent a room in a house during the week and commute home on weekends?
  4. 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 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.


  1. Kathryn on August 14, 2009 at 4:42 pm

    This is a lot to think about. Thanks for posting your thoughts!

    More info: When we move our kids will be boy (age 12) and girl (age 10) so we are really looking at 3 bedroom places.

    I don’t know where I’d be working yet.

    So far the consensus seems to be ‘Don’t even think about living separately unless he can get his workweek down to 3 longer days” and “seriously consider renting if you are there for 5 years or less”.

  2. Kathryn on August 14, 2009 at 4:48 pm

    P.S. Where do I look for rentals in Toronto? The newspaper? Is there a good website to look at for condo rentals?

  3. Novice on August 14, 2009 at 5:02 pm

    Kathryn — the first thing to do is decide on a neighbourhood / location. Then probably a realtor may be a better option to find a lease, especailly since you’ll probably be on a time limit (I’m a dad, I know how it is). But if you’re looking at places in Ajax in the morning, Don Mills in the afternoon and Downtown in the evening, you’ll exhuast yourself.

  4. Alexandra on August 14, 2009 at 5:09 pm

    Where do I look for rentals in Toronto? The newspaper? Is there a good website to look at for condo rentals?

    I would consider using a rental agent to look for you. Many get paid by the owner (I think the usual cost is a month’s rent), so the service would be free to you, and since you are out of town this could be a real time saver. You give them your requirements and they do all the leg work. There are too many rental units out there that are terrible, or the ads are misleading, etc.

    For the money and sheer square footage, I would also suggest that renting a home, not a condo, would be much better in your situation. Some of the newer condos are unbelievably small. Houses (especially the older ones) have the advantage of having way more space, perhaps a backyard, and you don’t have to worry about inflated rent prices to cover the condo maintainance fees (which are considerable in many cases).

  5. Ms Save Money on August 14, 2009 at 7:49 pm

    Alexandra, – Why don’t you look at

    There should be plenty of posts on rentals.

    Good Luck!

  6. Sarlock on August 15, 2009 at 1:28 am

    A rental agent is a great way to go. Rent a nice 3 bedroom home: If you’re going to rent for a good period of time, make it a place that you’ll call home and feel comfortable in. Explain what you want to your agent and he/she will help find the right fit for you and your family. We went with an agent (in Vancouver, BC) and found a nice, well-maintained 3 bedroom home for rent and were very happy there.

  7. Rebecca on August 15, 2009 at 10:38 am

    Be careful of rental agencies. Make sure you understand the service that they provide. I went to one where i paid money only to get access to a phone number that just have automated recordings of various rental listing. I wasn’t as lucky to work with rental agencies like those in the posting above. Needless to say, I didn’t end up using it.

  8. Kathryn on August 15, 2009 at 11:01 am

    Wow, Rebecca, that’s scary.

    Anyone know any reputable rental agents in the GTA who are paid by owners looking for tenants?

  9. qmanrei on August 15, 2009 at 11:43 pm

    Funny enough – I rent out townhouses in Pickering, Ajax and Whitby. So if you are looking to rent feel free to contact me. I have a 3 Bedroom 1.5 Bathroom available for Sept. 1 across from the Pickering Town Centre – located off the 401 at Liverpool, and right by the Pickering Go Station. :)

    I’m biased towards purchasing Real Estate as you can tell. At the same time, I don’t believe buying Real Estate is for everyone at every time in a person’s life.

    I could give you many reasons why you should buy. I guess the big question is – are you looking for an investment or a place to call home. They may not be the same thing. Happy to help you out if you need some support.

  10. Sarlock on August 16, 2009 at 2:16 am

    The good agents will expect a commission after finding you a place, not before. I paid $400 for mine only after we signed the rental agreement with the landlord.

  11. Germack on August 16, 2009 at 12:24 pm

    Paying $90,000 over 5 years to rent scares the daylights out of me.

    I know it sounds scary, however a house of 400K would cost you much more in the long-term:

    Interest/Opportunity costs: 20K (~5%)
    Property tax: 4K
    Utilities: 3K
    Total: 30K per year or 150K in 5 years.

  12. Alexandra on August 17, 2009 at 10:25 am

    Kristy Wellwood – She helped several of my friends find rentals, and she is wonderful to work with.

  13. Nathalie on August 17, 2009 at 4:40 pm

    Cost of rental: $1500/month + heat and hydro and water, phone etc
    Total cost of rental with water: $1600/month + heat/hydro phone etc.

    Cost of buying the house:
    (assuming house costs $250k and you put 90k down)
    Mortgage payment: $860/month (at five year fixed rate of 4.1%)
    Property Taxes: $300/month ($3600/year)
    Water: $100/month ($1200/year)
    Maintenance: $166/month ($2000/year)
    Insurance: $60/month ($720/year)

    Total cost per month: $1486/month + heat, hydro, phone etc..

    Looks like owning the house is slightly cheaper, most times when you rent an entire house you have to pay the water bill as well.

    I guess it depends on whether you think the market will go up or down over the next 5 years. Personally I would buy, you’re staying long enough to want to paint, make changes in the house etc and there are plenty of nice townhouses in your price range in the North York area. I would live close to husband’s work so he doesn’t miss your kids growing up also.

  14. Novice on August 17, 2009 at 5:41 pm

    I think the numbers can be worked any way to show that any one decision is better financially then the other (rent or buy). To me, the biggest issue is that the poster doesn’t know the neighbourhoods, or what they want. Renting gives a way to taste the neighbourhood without fully committing and is really the most logical.

    Nathalie — where are you looking? Houses in my part of North York (Don mills) detached 3 bedroom start around $400K. Even a semi would be more than the 250 you have above, unless it’s North york as in Jane/Finch and even then, maybe not. You’re also ignoring all the home improvement costs, which the various housing bears are sure to mention. To me, it’s not about the numbers, i’ts about being able to make an informed choice and the poster doesn’t have enough information to make a truly informed choice yet.

  15. Nathalie on August 17, 2009 at 5:57 pm

    I was looking at attached townhouses on and found quite a few. (select the townhouse option, freehold so you get no condo fees, 3+ bedrooms)

    I had 2000/year for maintenance which is what we spent in our 40 year old home/year, now we live in a new home and it’s about 400/year only.

    Home improvements are optional so I didn’t include them, you can also spend more money on rentals if you want.. If you buy a house make sure it matches your needs so you don’t spend 20k on a new kitchen etc right away in my opinion.

  16. Nathalie on August 17, 2009 at 6:07 pm

    Novice, never mind, I didn’t select freehold in my previous search, you are right there are much fewer freehold properties so you’d have to also include the condo fees making the owning of the townhouse about the same price as renting. But if you select house instead of townhouse there are some as well.

  17. TheAutomatedMoneyMachine on August 19, 2009 at 12:04 pm

    I suggest to buy a house in Oct 09 to Mar. 09. That’s when there’s going to have distress in the housing market as the Stock market crashed again like last year. People will be in a depress mode that they are probably going to sell their homes in low value.

    The banks will have more incentive as the market will froze. So you locked in a low interest mortgage fix for a few years and sell it when the market improves in a few years.

  18. Bruixa on September 28, 2009 at 1:38 pm

    I haven’t seen anyone take into account that if you move to be closer to your work, you can deduct all your moving expenses in your tax return, even the sales agent fee.
    Also, I have friends that live in Ajax and work downtown, take the GO and it only takes them 30 minutes, so I would buy there, something that you can put a big downpayment on and sell the house. With prices at a low level, there’s no where to go but up. Interest rates are very low, your husband is just starting out, so chances are his income will increase and you will be able to make lump sum payments on your mortgage. Buy something that’s not too old and have it inspected!

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