How Price, Style and Location affect Home Purchases
So you’re looking for a new home in Kitsilano and you have a set budget in mind (after you’ve spoken with your Mortgage Broker of course). Are you stretching your budget or being exact in your pricing? Is this your first time looking for a home? Are you moving to a different area of town?
Some advice: nail down a tight price point, then look above and below that number (not too much, consider +/- 10%). This will give you a sense of a few things, including: what the Seller’s are competing with, whether an extra den means that much to you, how lucrative the building is (you know the ones close to Kits Beach), how close you are to a busy street like Broadway or West 12th, and more. People buy homes for a few reasons, and price is only one of them.
Coming from a realtor who makes commission off the sale price of the home, you may be thinking that I’m trying to sell you into something more expensive so I make more money.. that couldn’t be further from the truth! Frankly, there isn’t much difference in commission between a $500k home and a $550k home! I make money (and referrals) from happy customers, not people who feel stressed over their budget or forced into anything. Realtors offer for professional advice, useful knowledge and above all else: support.
We see a lot of clients get pre-approved for a certain amount, but then decide to spend a little bit less so they have less strain on their financials. We also see a lot of people stretch their budget to get into their perfect home now (rather than in 3 years). Do some research so you know every angle you could take (that includes spending more and less than expected). Maybe $50k more can get you a Kits townhouse with your own private entrance and garden, rather than a typical condo unit (meaning you won’t have to move in a few years to get more space). Maybe it can get you higher quality finishings. Maybe it can get you a storage locker. I find this process helps people determine exactly what they want. Present people with many different options and they have to make a choice. This leads Buyers to be more critical, especially when looking at homes high above or below their ideal price range, which leads to confidence when deciding on if the home is for them or not. Believe me, you won’t be looking at listings too above and below your price range for too long – you’ll soon develop a great sense of yourself and homes that suit your needs.
Price, Type and Location
When you’re searching for a home, you have to consider many things: the top three are price, location and type.
If you want to live in a certain location in a certain type of home, you can get a good sense of the average price based on a quick market search (i.e. detached house in Kits: expect to pay at least $1.2 million). If you want to stay at a certain price in a certain location, you may have to settle for a certain type of home (i.e. $300k in Kitsilano: you’ll be in an older condo building). If you want a certain type at a certain price, you’ll have to move to the location where you can find it (i.e. Kits townhouse for $600k, you’ll be living in a fourplex south of 4th Ave).
There are good possible outcomes to every situation:
- Keep the price range (as well as your expectations) exact and buy and enjoy what you can afford.
- Look above your price range, and possibly get a smoking deal on a high end listing with a motivated Seller (this is the ideal situation, doesn’t happen often).
- Look below your price range, find a home with great bones and use the extra money to renovate it to your liking (or save your money, that’s always good too).
Final words: see a Mortgage Broker first! They will give you the best idea of what you can afford based on a multitude of situations, rates and timing. And tell your Realtor how you feel about every condo you see; we can far better serve you if we know what you like and don’t like about the units you see.