Avoid the home buying clash for cash

By Rebecca Burstein

(NC)—When young home buyers come to family for financial help, purchasing property can turn into a tug-of-war.

“The dependency of the younger generation on their parents has increased in recent years,” says Mary Sblendorio, a real estate agent on the W Network reality series My House Your Money, a show that documents prospective home buyers that turn to their extended family members for financial help.

“In the past, parents have always tried to help their kids, if financially capable. Now, it seems the parents are expected to 'help' – more like 'finance' – their children's dream homes. The rationale for children is that they have been accustomed to living a wealthy lifestyle and the thought of downsizing or downgrading is implausible.”

And since both parties have a say in the purchase, real estate agents are working harder to ensure properties appeal to varying age groups. As more parents accompany their adult children to viewings, homes must be strategically staged to please everyone involved. This boils all the way down to the paint colour on the walls.

Having been through the process previously, parents tend to be much more critical in home purchasing and are a bigger challenge to delight. “The young couple is usually more excited, and focus on the things on their wish list they are getting. In fact, they are excited to just purchase something they can call their own,” explains My House Your Money real estate agent Claudine Montano.

Mixing family and financing is never simple and when it's a case of generational home buying, conflict is inevitable. The reality series, My House, Your Money on W Network chronicles the family dynamic that young home buyers are facing in the current market.

When it comes down to it, winning this war is easier than imagined for the new home buyers, says real estate agent, Helene Baguley. “Most parents or extended family members, even if they are providing the down payment, want to see their kids happy at all costs.”

Rebecca Burstein is a Toronto-based writer and editor, specializing in lifestyle content.

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Find out how home renovations affect your insurance

(NC)—Homeowners renovate for a variety of reasons. Some build additions to accommodate their growing families. Some replace outdated systems, making their house more energy-efficient and eco-friendly. Still others want to increase the aesthetic appeal and market value of their homes.

Whatever the reason you decide to undertake a renovation project, it's important for you to know that you are contractually obligated to report additions and other significant renovations to your insurance carrier. That's because renovations typically increase the value of your home; if you don't update your policy, you may fall short on coverage.

The Insurance Bureau of Canada recommends that you insure your home based on its replacement cost, the amount it would cost to rebuild the house if it were destroyed. (This dollar figure differs from the market value and the tax assessment value of your house.) If you raise the value of your home by renovating, the replacement cost will rise as well.

“If you remodel but don't report that activity to your insurance carrier, then you might not have enough coverage to pay any claims that arise,” explains Jeff Burke, president and CEO of Western Financial Group. “For example, if you remodel your kitchen but then a fire destroys much of it, your insurance isn't likely to pay all of the costs of restoring the kitchen unless you have updated your policy to reflect the new granite countertops, high-tech appliances, flooring, and the rest.”

It's important to get your insurance company involved as your renovation project is taking place so that you are covered in the event of accidents that may occur during the project, harming you or workers who may be involved. Also talk with your insurance representative about these three items: whether you are required to remain in your home while the work is being done, since some policies will not cover claims for accidents that happen while the house is vacated; whether your renovation is extensive enough to change the classification of your building while work is being done (to that of a “building under construction”); and what impact unknown challenges (such as uncovering hazardous materials) could have on your insurance coverage.

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