Our very first farm

Happy New Year, everyone.

Jan. 2 is always a special day for us. Three years ago today, we finally found our farm.

It took us a long time to find our perfect farm. The search started about a year and a half before our forever farm even came up for sale.

I still remember the very first property we saw. Want to see it?

Large country mansion

Ummm… yeah… it didn’t look like that when we saw it.

At the start of our farm search, we were looking for an empty piece of property. Our plan was to build our own house from scratch.

So when we went and looked at this farm, it was a rocky cow pasture. There were no buildings, there was little grass. As we stumbled through the rough field, I realized that building from scratch was going to be a lot of work. We’d have to put in a driveway and a well and hydro and never mind actually building the house!

Well, two years after we passed on the cow paddies, someone else built their dream home. I can’t say that this is anywhere close to my dream home, but I do have to give them a bit of credit. They built the barn first.

(And for scale, that’s a full-size barn behind the trees to the right of the house. This place is massive.)

Because our search went on for so long, we saw a lot of properties. Since we looked at them, a lot of them have gone through renovations or even complete rebuilds. It’s kind of neat to retrace our steps sometimes and see what people have done to build their own forever homes. Fortunately, we’ve found our own forever farm, and it’s so nice to start another year here.

Have you gone through a long real estate search? Or what about a really short one? Do you ever go back to your former houses, or houses you looked at and see what’s been done to them? Are you in your forever house yet?

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Six tips on how to stay organized when buying a house

When I was organizing my office the other week, I came across the binder I made when we bought the farm. This thing was my bible. I thought it might be helpful to share how I stayed organized during our relatively complicated house closing.

How I stayed organized when we bought our house

1. Come up with a system capture the paper work and information that comes with selling and buying a house.

You want to have all of your information in one place that’s easily accessible. For me, this system was a binder that I carried everywhere for about three months. For you a file folder might work. You might even be able to set up an electronic file on your computer, tablet or phone. In my experience, buying a house comes with a lot of paperwork, so having a paper-based system worked for me.

2. Once you capture all of the information, keep it organized.

I used dividers to categorize information in my binder.

How I stayed organized when we bought our house

You’ll have your own categories that work for you, but the ones that I used were mortgage broker, mortgage provider, mortgage quote, life insurance, house insurance, lawyer, storage, eco-energy audit, geothermal, insulation, water, internet, home inspection, property taxes, finances, offer, move-in and “fun & plans” (more on this one later). Sections were a mix of information we needed to complete the purchase of the farm and the sale of our first house, along with the fixes we planned to tackle first.

3. Keep track of everything

Make note of every conversation, every contact, every transaction, every flyer. You never know what you’ll need some day. I found it was particularly important to have a photocopy of our official offer and all of our financial information that I could quickly refer to.

Here’s the first page in my “lawyer” section. I have everything from appointment times, notes on title insurance and land transfer tax, even the scrap of paper where my dad first wrote down the lawyer’s contact information (which I’ve blurred out) stapled onto the page.

How I stayed organized when we bought our house

Other sections have written quotes from insulation contractors, flyers for rural internet providers and business cards from other contacts. Our water section had the reports from all of our initial well inspections, but then it grew to include research that I gathered on different water treatment and pumping systems, estimates from contractors and other notes as we went through the process of installing our new system.

4. Keep a calendar

There are lots of things to remember when buying and selling a house. A calendar or schedule is essential to keep things on track. I made a customized calendar that showed the two months from when we purchased the farm to after we moved in all on one page. The front cover of my binder had a plastic sleeve, so I slipped the calendar in there, where I could always see it at a glance.

How I stayed organized when we bought our house

5. Make sure your system is flexible.

In order to work throughout your whole house purchase, your system will have to grow and adapt and travel with you. Part way through the closing, I bought a second package of dividers and doubled the sections in the binder. As new information came in, I could write it down or print it out, punch holes in it and slot it into the appropriate section. Wherever I was, I could whip out the binder to access information or jot down a note.

6. Make room for some fun.

Buying a house can be stressful. Often, it can seem that you’re spending all of your time with depressing inspection reports that show everything that’s wrong with your house, exorbitant contractor quotes that show you’re never going to be able to fix your house, or complicated legal and financial forms that make you question if you’re ever going to be able to actually buy your house. Occasionally, you’re going to need some help to look on the bright side.

The final section of my binder was called fun & plans.

How I stayed organized when we bought our house

This wasn’t a huge section, and I confess it didn’t get a ton of attention, but it was a spot where I could do things like this.

How I stayed organized when we bought our house

Or this (pre-Pinterest).

How I stayed organized when we bought our house

Our two-month closing process was a little complicated because we were dealing with a country property and a fixer-upper, but I think a binder like this would be helpful no matter what kind of house you’re buying. It can be scaled and customized for whatever you need. And its usefulness continues after the sale closes. It’s been two years since we moved to the farm, and I still pull out this binder occasionally to find a contact or double check some information.

Now it’s your turn. Anyone have any tips on how to stay organized when buying a house? Are you a paper or computer person?

Farm-iversary 2

Two years ago yesterday, we took possession of the farm.

As I did last year, I’m going to take a look back at the milestones and accomplishments from the past year.

This year wasn’t as big on projects as year one. As much as I love DIY and improving my house, it was really, really nice to sit back a little bit and enjoy the comfy spaces we’ve created.

Relaxing in a cool basement

Part of settling into the farm was focusing a little more on decorating, rather than renovating.

I found inspiration on a local home tour and took in the Toronto Home Show with one of my friends. I got crafty, making a monogram, dice and painting a tray. I revealed my obsession with chairs and added two to our collection, receiving Strandmon for my birthday and winning Austin at Blogpodium.

I also went thrifting more than I ever have before, scoring a metal washtub to hold firewood, lamps, flags, pillows, tchotchkes and our beautiful dining table. Thrifting worked the other way too, as I sold the woodstove, our original kitchen stove, a rotisserie and a wing chair on kijiji.

Antique dark wood dining table

However, we did still accomplish a few things that fall more in the reno category.

We increased storage and counter space in the kitchen with the addition of a kitchen island, complete with a DIY wood countertop. We added more storage and reorganized the front hall closet. We made over the mudroom to be a bright welcoming space. I finished a cozy reading nook in the basement, including my favourite chair and a simple DIY ottoman. Oh, and then there was our most recent project, painting the kitchen, foyer and hall.

Simple bright country mudroom

Landscaping was supposed to be the big project for year two… and it turned out to be a really big project. Too big for just one year.

I swear, landscaping at the farm equals rocks. There were the four hours Matt, my Dad and I spent moving a pile of rocks from beside the driveshed to the official rock pile behind the barn. Then there was the new garden around the well that I edged with rocks. I finally had to enlist Matt and his Dad to move the most massive boulders into position.

The path across the turnaround was the one place where I wanted rocks–or at least bricks–but of course Matt and I first had to dig up another big rock that was in the way.

Digging up a large rock from our brick pathway

An extreme summer heatwave put an end to my landscaping. The intense heat was just one example of the extreme weather we saw in our second year. Spring came really late. Summer was really hot. And winter has been really snowy… and really, really, really cold. On top of it all, there was the ice storm. Spending three and a half days without power (and water and heat) was a challenging lesson in the realities of country living

Despite the difficult weather, we managed to grow some of our own food for the first time last year. We only picked a few tomatoes before the rest of the fruit was struck down by a blight, but we are keen to try again. The annual raspberry harvest was much more successful. A vegetable garden is still on our wish list.

Rotting tomatoes

Beyond our small vegetable plot, our fields produced another crop of hay, though our farmer only took one cut. In the fall, the fields were prepped with manure for their transition to soybeans coming up later this year.

Waste was a bit of a theme for year two as I did my own much smaller manure application, we had the septic tank pumped, and I did a major clean up of our 2km of roadside.

Four full bins of recycling

Change was also a theme in year two. In the fall, I left the organization where I had worked for the past 10 years for a new job. I was a bit scared to leave, but I was ready for a new challenge. I’m loving my new job–it’s definitely a challenge–and I’m really glad that I made the leap.

Interestingly, I wouldn’t have had this opportunity without the farm. We’re now located within reasonable driving distance of a bunch of new cities that were too far away before.

The biggest change that came to us in year two is of course Baxter. Matt and I both wanted a dog for a long time. However, we agreed that we would wait to get one until we were living in the country. We thought it might happen in year one, but we ended up waiting until year two. I think that we were just waiting for Baxter.

Family picture with Baxter

He is absolutely the perfect dog for us, and I love experiencing the farm with him. Rain and shine, day and night, hot and cold, I’m spending way more time outside enjoying the property than I did before.

There have been some not so perfect moments: the three run-aways, the pink-eye, the brownies, the chicken bones, the nail clippings and the skunk come to mind. Nonetheless, my love for the sleek sleepy creature dozing in the corner is immense. I have become a massive dog person.

While we gained Baxter, we lost Easter. In the fall, she disappeared for a few days, came back for one night and then disappeared for good. We’ve not found any evidence of foul play, so I am still wondering whether she might return this spring.

I think that’s some of my naive city-girl optimism overshadowing my realistic country-girl side. It’s been hard to think that the little fur ball that was born in our driveshed and that we watched grow up from a helpless baby into a spoiled kitten might not be part of our lives any more. I called her baby all the time for goodness sake, and she loved to be cradled like one.

Matt and Easter eye to eye

Ralph, whom I still call mama, is as constant as ever. She’s packed on the fur–and the pounds–as she presides over the barn. She humours us and now allows us to hold her like a baby. She’s learned that she gets the best belly scratches that way.

Beyond our family animals, we continue to keep a tally of the other animals that come through the farm. Year two gave us a few close encounters that we’ve not had before.

We went beyond seeing turkey footprints to seeing actual turkeys. We saw more deer (and then Matt hit one with his car and his Dad and his shotgun added another to our freezer). We saw a skunk for the first time, and then got sprayed for the first time (but not all at the same time). Down at the pond, we had what we think was a fisher. Watching all of the birds who come to the new feeder we built has been a highlight for me this winter.

Two wild male turkeys

In last year’s anniversary post, I came up with two words to summarize our first year at the farm. Last year’s theme of “big and more” still applies to all of our experiences at the farm, but I wanted something specific for year two. It was harder than I thought to come up with a theme, but I feel like wins and losses sort of summarizes this past year.

We were successful at a decent number of projects but didn’t accomplish as much as I’d hoped. We lost power, and I won a chair. We lost one precious family member and gained another extremely adored one. We settled into the farm a bit more, and the wins have far outweighed the losses. Year two confirmed that it’s definitely a country life for us.

Bird’s eye view

A few weeks ago as we headed into this year’s major undertaking that is landscaping, I posted an overview of what I call the residential portion of the property. That post got me thinking that you might be interested in seeing the whole farm. So let’s zoom out a bit, shall we?

Birds eye view of the farm

Voilà. The farm. All 129 acres of it. Clear? Good. Post done for today.

What? Oh. Not clear? Perhaps you’d like some explanation of where and what things are.

Layout of our farm

Obviously, the residential portion is a very small part of the property.

The farm is a fat L-shape. The small severance on the west side belongs to the people who owned the farm three owners ago.

During our real estate search, it was very hard to find farms that hadn’t been chopped up over the years. Lots of them had rows of small one acre lots cut off on all sides, and it became a running conversation between Matt and me about how I didn’t want a property that was missing any pieces of pie. This single severance is relatively small and tucked around the side, so I don’t notice it too much. Ironically, it’s an unusually shaped lot: triangle, just like a piece of pie.

Anyways, before you all leave me and go looking for dessert, back to the explanation of the farm.

At the top of the image (on the west half), the dark squiggly line cutting across the top left corner is the creek that runs across the front of the property and under the driveway. It flows into the pond and then continues out to the back half of the property, which is mostly marsh.

When I describe the property, I say that about half of it is cleared for hay fields and that the other half is natural. The natural half is very wet, but it’s also thickly forested.

Marsh

According to the third season of Sarah’s House (where Sarah Richardson bought her farm), an acre is about as big as a football field and fits 16 small city lots. So using that math, we could have more than 2,000 houses on our property–or a whole lotta guys in tight pants. Yikes.

One of our most frequently asked questions is, “What are you going to do with all of that land?” My answer is always, “Enjoy it.” The opportunity to live in these surroundings is a luxury that I do not take for granted.

I’ll admit that my environmentalist side was one motivator in buying such a large property. I am not a fan of suburbia, and I’m happy that I can preserve this small (or large, depending on how you look at it) corner.

Year one theme: Go big

For me, our first year of farm ownership can be summed up in two words: big and more.

Everything we’ve done, every experience we’ve had has been bigger and more than I expected. It’s been amazing, frustrating, awful, exhausting, expensive, testing, uniting, surprising and wonderful–all to an extreme degree.

As this week is the one year anniversary of the farm becoming ours, I thought it would be a good time to look back at some of what we accomplished and a few of the lessons we learned over the first year. Click here for the two-week and six-month wrap-ups.

We started big, installing the new geothermal system the very first week. The excavation was bigger than if we’d been digging a foundation for a new house.

Geothermal excavation

Upgrading one central system for the house was quickly followed by another, when we decided to redo the entire water system, including a new well.

Our original plan for the basement to patch the walls, move a couple of things around and redo the bathroom quickly grew to a full gut job that involved reframing, rewiring, reinsulatingredrywalling and recarpeting.

Eventually, we did get to painting, furnishing and decorating. We still need art and furniture in most of the basement, but the TV area is done. And it’s awesome. We spend every night here–if we’re not working on one of our other projects, of course.

TV area with sectional couch in the basement

So far, the basement has turned out even better than I envisioned.

The bathroom, which was the most disgusting room in the whole house when we moved in, is now one of the best thanks to new plumbing, marble tile, dramatic dark paint, extra storage, a shower bench and a big mirror. After breaking the concrete floor, running all new waterlines, marathon tiling and grouting sessions and, oh yeah, the snake, we ended up with a bright, clean, shiny, functional and modern space.

Small basement bathroom with white tile and big mirror

While the basement has been our longest project and most dramatic transformation, it wasn’t our most difficult. The hardest project was definitely the roof. Over five days in the middle of the summer with average temperatures around 30ºC, Matt reshingled our house. For him, this project is his proudest accomplishment for year one. For me, this project taught me my most memorable lesson: roofing is not a DIY job.

Half shingled roof

Away from the work and the projects, there’s been a few other big developments in our lives over the past year.

First, the property came with other occupants already living here: most notably, Ralph the barn cat. Sticking with our theme of everything being more than we expect, Ralph kept things interesting by turning out to be both female and pregnant.

Kittens with mother cat

Her four kittens were a fun addition to the farm for the spring.

Kittens

Gratuitous kitten cuteness

Three went on to new homes in suburbia, but one, Easter, stayed on at the farm. Learning that I’m a cat person–as long as they stay outside–has been my most surprising lesson from year one.

Cats on the windowsill

Ralph and Easter pay a visit to the dining room window sill. This is Easter’s “meow–let me in!” face. Ralph knows better.

In addition to our feline family members, our family expanded with the addition of Wiley, our tractor. He’s been quite handy for the various jobs we’ve had to do, from mowing the grass to blowing the snow. Tractor maintenance and how to use the front end loader are lessons we’re still in the process of learning. Lesson from last weekend: a hairdryer can be used to get a tractor to start.

Kioti CS2410

Outside, we’re still learning how to manage a large property. We’ve had the paddocks and run-in shelters removed from all of the fields, added a gate to the driveway, cut down a few trees, put in a flag pole and cleaned up the property a bit. We’ve eaten apples and raspberries from our own land, and watched two hay harvests. We’ve spent hours walking the fields, admiring the pond, hiking the woods and even managed to go tobaganning on our own hill and skating on our own pond.

Walking in the hayfield

When I imagined living on a farm, I envisioned lots of friends and family around, fun parties and big gatherings. This vision has absolutely come true, whether it’s the fun days we’ve spent with nephews, the relaxing nights we’ve had with friends, or big family parties we’ve had for Christmas, Easter and just because. Most rewarding of all, though, has been all of the help our friends and family have given us to make the farm ours over the past year.

Drilling post holes with an auger

We’re still in the process of putting our own stamp on the farm. We know there are more projects and more lessons to come.

Between rural living, a farm, a large property and DIY home renovations, we’ve chosen a somewhat unique lifestyle. And it’s exactly the life for us.

The first year has been more than I ever expected. I’m excited to see what comes next.

Farm-iversary

A year ago tomorrow, the farm became ours.

Late in the afternoon on Friday, March 2, 2012, we finally got word that the deal had closed. We immediately drove to our dream property, talking excitedly about our plans for the next week and everything we had to do before we moved in.

It had been a long search for the perfect property. The two-month closing had been a little uncertain, as the sellers were in a very difficult situation and it was not a pleasant sale for them.

The sun was going down as we turned into the driveway, and we could see a fire burning at the top near the house. Ummmm, who’s having a campfire at our farm? It’s ours now.

It turned out that one of the sellers was there with his friend reminiscing. We chatted for a little while, and then as the rain started to fall, they went on their way, and we went into the house.

Dream house it was not. The heat was still turned way down, possessions and garbage left by the previous owners littered every room, lights were burnt out. It was cold and dim and dirty.

Messy room

The scene a few weeks before the sale closed. We kept the desk, but threw out the dead pillow.

But this is what we had expected. This is how we saw the house for the first time at the beginning of January, and this is what it had looked like every time we’d come back. Now it was ours–all of it. We rolled up our sleeves, tugged on our gloves and got to work.

My priority was the fridge, because we had both of our families coming the next day to help with the clean out and we needed to feed them. Unfortunately, along with having next to no heat, we had absolutely no hot water. Cleaning a cold sticky filthy fridge was a slow process.

Matt started picking up cardboard, paper and anything else that was burnable and carrying it out to the still smouldering fire. Eventually, he had a roaring blaze going, even in the pouring rain.

Big bonfire at night

This is Matt’s “I have made fire” pose

We stayed for hours, finally heading back to the city near midnight. The next morning, we were back–this time with a kettle and helping hands.

When my mother walked into the house, the first words out of her mouth were, “Oh, Julia.” The tone was not happy or congratulatory. Her lips firmed into a thin line–you know the look–and she said, “Where do you want me to start.” I assigned her to our bedroom, where the closet was still full of the previous owner’s clothes–eight garbage bags worth.

My sister got another bedroom. Matt’s mom–who cleaned the bathrooms at our first house when we moved in–went to work on the main bathroom. My brother replaced light bulbs and washed the fixtures. Matt’s Dad headed out to the barn. The seller and his friend returned with pick-up trucks and trailers–told you it was a weird situation–and they, along with Matt, my Dad and me, went to work clearing out the basement. Three trucks and trailers fully loaded went to the dump that first day.

Pick up trucks and trailers full of garbage

That’s Matt playing peek-a-boo from behind the trailer

A year later, the clean out and clean up continues in a few spots. We still have campfires every so often.

But the best part is that the novelty has not yet worn off. Thinking we want to live in the country, have a large property and DIY our own house is one thing. Actually doing it is another.

Now, a year into it all, I couldn’t imagine us anywhere else. It feels exactly right, but at the same time it still feels very new. I am amazed that it’s already been a year.

All about farm property taxes

The first installment for our 2013 property taxes are due this week. I realize this topic will not apply to some readers, but I decided to write this post anyways, as our experience may be helpful to some of you.

Property taxes on a rural property can be a bit complicated. However, it’s worth it to seek out rebate programs, as the savings can be significant.

For us, the farm is divided into three parcels: residential, agricultural and conservation.

Large hayfields

The residential section is exactly the same as most people’s property taxes. It includes the house and one acre of land immediately around it. These are taxed at the regular residential rate.

The agricultural section of the property is the fields. These are classified under the farm property class and are taxed at 25% of the residential rate.

The conservation section of the property is the woods and marshland. For us, this adds up to 42 acres that is classified as “provincially significant wetland.” Under the Conservation Land Tax Incentive Program, these acres are tax exempt as incentive to maintain them as natural areas.

None of these tax rebate programs are automatic, as we discovered last year. Previous owners had let the rebates lapse, and between 2010 and 2011, the property taxes nearly doubled. The whole 129 acres was being taxed at the residential rate–ouch.

The residential classification was still in place when we took possession of the farm last March. We went to work right away to apply for the rebates that were available to us. What we learned is there is no single point of contact for farm property taxes.

Farm property tax paperwork

The Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA) handles applications for the Farm Property Class Tax Rate. Operations such as tree farms, animal farms, greenhouse operations or crop farms like ours count under this class of property. The farm must simply generate at least $7,000 of income a year. The most important part of the application is the Farm Business Registration Number. Since we do not farm the property ourselves, the farmer who rents our fields has to complete this portion of our application and supply his registration number.

The Ministry of Natural Resources (MNR) manages the Conservation Land Tax Incentive Program. Most of our property is restricted under the local conservation authority. However, this does not automatically qualify us for the CLTIP. The Ministry has to deem a property—or a section of it—as provincially significant. Fortunately, our property was already in the MNR’s system, so we just had to apply for the rebate.

Marsh in the winter

We also went through our local municipality for a few other adjustments specific to the house itself: their records showed a mobile home on the property and a working indoor pool, both of which did not exist and which impacted the value of our house. After the “demolition” of the mobile home and the pool, our taxes decreased by a whopping $257.56–hey, I’ll take whatever I can get.

The Municipal Property Assessment Corporation (MPAC) is the overarching organization in Ontario that manages everyone’s property taxes. Approvals from the city, OMAFRA and MNR flowed through to MPAC, which pulled all of the information together, determined our tax rate and notified the city of what we should be billed.

The flow of applications, approvals and adjustments is very, very slow. Our applications went to the various organizations last spring. I followed up monthly by phone to make sure all of our applications were wending their way through the system and no information was missing.

Some of the approvals came through in the summer. However, none of the adjustments were applied at the city level until the fall. We paid three installments at the full residential rate—ouch again. However, by the end of the year when the reclassifications finally came through, we had a huge surplus on our account—so much so that we didn’t have to pay our last installment and the city still sent us a cheque at the end of the year.

Now heading into the 2013 tax year, all of the rebates are in place, and the quarterly tax bills are very manageable. In fact, the amount of property tax that we’re going to pay this year is equivalent to what we paid when we were living in our little house in the city.

The farm we almost bought 2

A few weeks after losing our first farm to a bidding war, another farm came on the market. It was just around the corner from the property that we had lost.

One hundred acres of forest, creeks, corn fields, one large barn and another medium, and an old farmhouse with numerous additions. A few features made it particularly notable. First was the pond. Or should I say lake.

Large pond

I still think about this pond. It is massive and made me realize a pond was pretty much a must-have feature for me. In addition, several wide and deep creeks wind their way through the property, flowing to a large river.

Unfortunately, this was not the only water on the farm, which brings us to the second notable feature.

When touring historic farm houses, we were often advised to wear our shoes when we went down to the basements. We’d seen rubble foundations and dirt floors, but we’d never seen what we found in the basement of this house: approximately eight inches of water and a rubber dingy fully inflated and floating around in the cellar. Never mind shoes, we needed high rubber boots!

Aside from the water, the basement was in great shape for an old farmhouse: fairly generous ceiling height and a concrete floor–albeit under water.

Upstairs, the house had original door knobs and light fixtures in a few spots, although for the most part it was characterized by dated 70s finishes and bad additions.

Poorly renovated farm house

Most of the original character had been lost, but the graffiti sprayed on the painted brick did add a certain… something.

Painted over graffiti on brick

It certainly had potential.

We made our offer that day. Believe it or not, we went in at full asking price, and we were the third offer.

We were only competing with two other bidders, which was one less than the last farm. But it was two too many. The farm ended up selling for $82,000 over asking.

We were nearly a year into our search, we’d seen only two farms that we wanted to buy and we’d lost both in bidding wars.

We were a little bit heartbroken–I still think about that pond. We were very frustrated. And we were starting to wonder if we were ever going to find the farm of our dreams.

The farm we almost bought 1

The thing you should probably know about our farm search was that when we started looking, I wasn’t ready. My plan was to wait until we had paid off the mortgage on our starter house. But about five months before that, Matt started spending time on MLS and soon enough he was making appointments with real estate agents.

About a month into our premature farm search, Matt and I drove out to see a property. We were about 20 minutes early for the appointment, and as we circled the rural country roads peering out the car window at the farm I said to Matt, “How did you do it? How did you find the perfect place?”

A long gravel driveway bordered on one side by tall pines and on the other by a manicured meadow led to a small house perched on the top of a rise. Undersized dormers poked out of the roof and the weathered wood of a big barn towered over the ridge line.

Farm house with undersized dormers

The original farm house had been added to over the years becoming a hodge podge of traditional tiny rooms connected to larger open spaces including a big eat-in kitchen and a generous family room with windows on three sides. Bathrooms were classic 1980s: a vintage six-piece complete with pink jacuzzi tub and matching bidet and an avocado three-piece.

In terms of potential, it ticked the box. My vision for the reno included digging out the basement, building a full second story–complete with properly proportioned dormers, reconfiguring the main floor and adding on a garage.

Outside, acres and acres of manicured grass beckoned family barbecues. Rolling hills hearkened of winter sledding parties. A small creek winding around the house and barn, 10 acres of forest and more than 50 acres of corn fields (of the property’s total 94 acres) were exactly the atmosphere we were looking for. And of course, the big barn with its own fabulous dormer drew us in.

Wood barn with dormer

But they only drew us so far. Though the price tag on this first farm was less than what we would ultimately end up paying, it was so early in our search that it still seemed very expensive. My sticker shock combined with my renovation ambitions–plus some electrical issues, no proper well (cistern only) and baseboard heat instead of a furnace–made us hesitate to put in an offer.

We visited the farm a few times. Talked about it a lot. Thought about it almost constantly. And then we watched the listing expire at the end of the fall.

That whole winter, every night as I walked home from work, I thought about the farm. We decided that if the listing came back up in the spring, we would put in an offer.

We watched MLS, and sure enough a few months later the farm came back on the market. We went and saw it again. The issues were the same, but so was the appeal. We put in an offer.

When our agent called me to say that there were three other offers and we were all being sent back, I was completely stunned. How could this farm that no one wanted to buy four months ago now be selling in competition?

We upped our offer.

And that night as I climbed into bed I felt like we were making a mistake. After about six months of dreaming about this property, it didn’t feel right.

The next day, we found out we’d been outbid. The amount the farm sold for surprised me and was more than we’d have paid. Between the price tag and my misgivings, the loss didn’t hurt too much. Apparently, I still wasn’t ready.

Financing the farm

It’s been a year since we bought the farm, and this month I’m revisiting some of our experiences from the purchase.

When we last left our heroes, they were standing in the snow next to a sold sign smiling giddily because they had just bought a farm.

In reality, they had a conditional sales agreement on a farm. In order to actually close the deal, they had to pay for the farm, which meant a mortgage.

Consumer mortgage application

Finding a lender for the farm was a bit like finding the perfect property–frustrating, trying, drawn out, complicated… although [spoiler alert] ultimately successful.

Matt and I had gone to our bank and been pre-approved before we ever started looking at farms. However, now that we had found our farm, we had to convert our pre-approval into an actual approval. And according to our conditional offer, we had eight days to firm up financing.

What we discovered was that in the case of a rural property a pre-approval is mostly hypothetical. Turning it into reality is another matter entirely.

Banks, and really most lenders, like cookie cutter. They have forms and check boxes and mathematical formulas. A 129-acre farm with a modest house, a massive barn, a semi-rickety driveshed, a bunch of hay fields and a few acres of forest doesn’t fit their molds.

Posted interest rates don’t apply. Nor do minimum down payments. Hoops and hurdles are placed in your path. Acrobatics–and lots and lots of paperwork–are required.

Signed offer in hand, we headed to our bank. To cover all of our bases, we also visited a credit union where Matt’s Dad is a member and connected with a mortgage broker recommended by our real estate agent.

Here’s what our options were:

  • The bank: Throughout our dealings with our bank, we felt like they were trying to make things as difficult as possible so that Matt and I would just go away. Even though we weren’t planning on working the farm, they wouldn’t give us a residential mortgage. Everything had to go through their small business line of products. And the interest rate was a full percent higher than what other residential customers were getting.
  • The credit union: Service was great, and we really felt like our staff person was working with us to make the mortgage happen. They would do a residential mortgage, but the interest rate wasn’t any better than at the bank.
  • The mortgage broker: For the most part the broker struck out. Even though Matt and I were a good credit risk and the farm had no big issues, lenders didn’t want to step outside of their little boxes. He did manage to find one major bank willing to give us a residential mortgage. The snag was that the bank saw the “needs TLC” description in the real estate listing and wanted to hold back a portion of our loan conditional on us installing a new heating system and new roof within 120 days of taking possession.

So there was no clear front runner among our three options.

The biggest hurdle in securing financing was that every single lender wanted an appraisal. A real live person had to visit the farm, walk around and say how much it was worth. Except he’d only look at the house plus 5 acres. Maybe 10 if we were lucky.

A big part of the appraisal was looking online for comparable properties, which meant that since the appraiser was only evaluating 5-10 acres, he was looking for anything in the 1 and 15 acre range. Now maybe I place more value on land than other people do, but somehow in my mind 5 acres doesn’t compare to 129 acres.

It was important to us that the whole property be valued properly. All of the lenders would only give us a mortgage for up to 80% of the appraised amount, so if the appraisal came back too low, we could be in the situation where we might not be able to afford the farm.

Aside: The 80% loan speaks to my earlier comment about minimum down payments not applying to farm purchases. While in Canada people are able to purchase houses with as little as 5% down, if you buy a farm, your lender is going to want 20% minimum.

Anyways, the other huge frustration with the whole appraisal process is that the lender ordered it, required us to do it, kept the report and wouldn’t show us a copy, but required us to pay for it. I managed to speak with the appraiser our bank wanted to send out to the property and when I asked him how much the appraisal was going to cost he refused to tell me!

The appraisal ended up being the tipping point for us.

I managed to get the credit union to agree to appraise the full 129 acres–at a cost to us of $762.75. Given the urgent deadline of firming up our financing within a week, we gave their appraiser the green light to head out to the property.

The day our conditions expired, the appraiser’s report showed up at the credit union. Even though we hadn’t signed the final paperwork, we went ahead and waived the conditions on our offer. And by the way, the appraisal came out more than $60,000 higher than we had paid for the farm. Phew!

The day after we waived the conditions, a bank contacted by our mortgage broker came forward with a firm commitment for a residential mortgage at a half percent less than the credit union was offering.
Mortgage Loan Offer paperwork

Though he had no obligation to do so, our broker gave us the paperwork from the bank, so that we were able to take it to the credit union and use it to negotiate a better interest rate. The great service from our broker and our mortgage specialist at the credit union made what was an extremely frustrating process slightly less painful.

Some lessons learned for securing a mortgage for a rural property:

  1. Give yourself as much time as you can to finalize your financing. We had had lots of conversations with the bank throughout our property search, well before we ever placed our offer on the farm. We had some idea of what would be required to secure the mortgage. However, the financing was much more complicated than we could have ever dreamed. We squeaked in just under the deadline to waive our conditions.
  2. Have all of your financial information documented in detail and carry it with you at all times–extra hard copies as well as electronic files you can email. All of the lenders required three years of tax statements for both of us. In addition, we each supplied pay stubs and personal statements detailing our assets and income. Having all of our numbers on hand ensured we didn’t add any extra delays to the process.
  3. Consider working with a mortgage broker. Our broker’s contacts and experience were invaluable. He was a fabulous advocate for us and it was very helpful to have someone who was willing to explain the intricacies of mortgage conditions and vet any documents we received.
  4. Shop around. Don’t settle for the first offer you receive and consider alternatives to traditional banks. Even when you receive an offer, go back to the lender and ask for exactly what you want. You might not get everything, but you may be able to do a little better. Ask lots of questions and make sure you understand exactly what you’re getting.
  5. Be prepared for some extra expenses just because you want a rural property: you’ll likely face a bigger down payment, higher interest rate and appraisal fees.

For Matt and me, the extra expenses were worth it because we got the farm of our dreams. I can’t say the frustration was necessary, but we made it through.