While where a property is located is undeniably important, there are two other variables that have equal impact.  In addition to location, all properties also have a price and a set of features or attributes.

Each variable is tied to the other two and changing one impacts the others.

Every buyer of a home approaches their purchase with their own specific mix of what is important to them and it is rarely the case that all three variables are given equal weight.  Let’s look at how to optimize the result for you as a buyer or seller by making one of the variables your primary focus.

Location Comes First

As it says in its name, real estate is about physical, actual property, and that property has to be located somewhere.  Location is undoubtedly crucial in real estate, for both objective and subjective reasons.

For buyers, location is most often important due to subjective reasons – proximity to work, being within a certain school catchment area for the kids, or simply being close to friends and family.  If you’re focused on buying in a particular location for any of these types of reasons, you need to be as flexible as possible when it comes to the features of the home and the price you’re willing to pay.  Remember to take the very real benefits to you of the home’s location into account when you’re comparing against other properties that might be lower priced or have more desirable features.

For sellers, location discussions are typically focused on objective reasons – a short walk to a nice retail stretch with shops and restaurants, easy access to highways or transit, or being situated in a mature neighbourhood with trees.  If you’re selling a home that is blessed with a number of objective reasons as to why it is well located, you (and your agent) need to make the location a central part to your listing story.  They aren’t simply buying your home, they’re buying into living where the home is located.  If you’re missing features that might be appealing to buyers, you can still command a good price based simply on location.

Features Make It A Home

During the COVID pandemic, we saw location decrease in importance for many people.  Whether it was for subjective reasons such as no longer needing to keep a short commute to work due to a shift to working from home, or objective reasons like a lessened ability to enjoy the nearby retail stretch with restaurants and shops, many people chose to focus on features rather than location.

For buyers, focusing on the set of features or attributes of a home over location often offers a significant break on the price.  We often see very similar homes sell for very different prices depending on the location.  If you’re focused on a particular type of home with certain attributes, then be very open to where you will live.  Structure your search around these desired attributes and you will quickly see that you can get more home (whether that means bigger, better or simply better suited to you) for the same budget.

For sellers, a home that is primarily being sold based on its features and attributes needs to present very well inside.  If you need to ask buyers to forgive some lacking elements related to location, you better be making up for it by providing the features they will love in the home.  While over-improving a home in a less desirable location is a genuine problem, you can and should work to make your home show as one of the best in the area.

Price Matters Most

Many people assume that price is the most important variable in a real estate equation.  While this is understandable, it is wrong given real estate is not comprised of standard products with limited differentiation.  As we’ve discussed, location and features are both fundamental variables and within each property there are a multitude of differences from another, some large and some small.  Some buyers do, however, focus heavily on price and there ways for such buyers – and sellers who will be dealing with them – to optimize the result.

For buyers, the cost of the home can and should be an important part of your purchase decision.  If price is absolutely crucial for you, then you need to gain a good understanding of where you can get the most house (best mix of features and attributes), in the best possible neighbourhood (location) for a certain price.  By focusing your search on areas that are lower-priced than other areas, you then only need to seek out the best option in that area with your budget.  It doesn’t make it easy, but it is far more achievable than looking for a lower priced property in an area that commands higher prices than your budget.

For sellers, when we talk about a situation where price matters most to buyers, you need to think carefully about any upgrades or expenditures you make on the home that you are hoping to recoup from the buyer in the form of a higher sale price when you sell.  If your does not do well on either the location or the features side of the equation, you must make up for it on the price side.  We always recommend sellers in such situations focus on any negative aspects of the home and work to bring them up to at least a neutral.  A dated kitchen is not a negative and should not be renovated in such cases.  A damaged countertop or broken tiles, however, are negatives that may have a large impact on the impression and therefore the sale price of the home.

It is simple to say that real estate is just about location, price and features, but these three variables influence each other in very complex ways.

Price is often wrongly considered to be only on the result side of the property equation, such as location plus features, equals price.  This is short-sighted and fails to recognize that price is a variable, not just a result.

As we’ve just reviewed, sometimes location is the focus, where buyers say what price can I pay, what features do I want, in the location that I need.  Other times, features matter most, with buyers looking for a particular size, type or finish in a home, and willing to pay within a certain range for it, in any number of locations.

As all transactions require both a buyer and seller, it is always worth it for both sides of the transaction to put themselves in the shoes of the other side.  By understanding what someone focusing on location values, or what’s important to someone who cares most about the price, or what it means for someone thinking about the home’s features, you can adjust your approach and get a better result.  If that sounds appealing and you want to work with agents who understand, get in touch.

We have all heard the old adage about the three most important things in real estate.

“Location, location, location.”

While that may make for a pithy statement, in truth there are three fundamental variables in real estate and each is tied to the others.  If you change one of these fundamental variables, it will affect the other two variables.

How do each of these variables impacts the others?

• Love a particular neighbourhood? The options for the type of home that you can buy there will be dependent upon your budget and the price sellers are getting in that area as well as the features of the home.
• Looking for a certain type (detached, semi-detached, townhouse or condo apartment) of home with certain features? The location we look in will be dictated by your budget for the desired type of home with the features you want.
• Have a maximum budget due to a pre-approval amount from a lender or your comfort level for monthly costs? The type of home and location will both be impacted by this financial consideration.

All buyers are subject to these three fundamental variables.  Even those buyers who have no financial constraints are really just able to prioritize location and features over price.

Let’s look at properties for sale right now to see how prioritizing each of these variables impacts the others.

Priority #1 – Living in a particular neighbourhood

For a buyer who has prioritized a certain location as being crucial to their purchase, they will need to adjust their preferred budget or the ideal features of the home.

Here’s three options if you’ve decided you must live in the catchment area for the Frasier Institute’s number one ranked public school, Whitney Junior Public School.

118 Rosedale Heights Drive, Toronto

This is a condo apartment with three bedrooms and two washrooms, for sale at $2,050,000.

Photos courtesy of ROYAL LEPAGE REAL ESTATE SERVICES HEAPS ESTRIN TEAM, BROKERAGE

286 St Clair Ave East, Toronto

This is a detached home with three bedrooms (plus two in the basement) and five washrooms, for sale for $3.18M.

Photos courtesy of RE/MAX PARTNERS REALTY INC., BROKERAGE

167 Douglas Drive, Toronto

This is a detached home with five bedrooms and five washrooms, for sale for $6M.

Photos courtesy of SOTHEBY`S INTERNATIONAL REALTY CANADA, BROKERAGE

If you’ve decided you must live in a particular neighbourhood or area, then the location is one variable you will not compromise on in your hunt for the right home.  This means that you have to be willing to be flexible on the features or attributes or even type of home as well as the price.  In this example, a family looking to make sure they were within the catchment area for the highest ranked public school in Toronto could buy a condo or a house, spending from $2M to $6M on their purchase.

Priority #2 – Living in a certain type of home

For a buyer who has prioritized a specific set of features or attributes for the home as being crucial to their purchase, they will need to adjust their preferred budget or the location in which they buy.

Here’s three options if you’ve got a big family who needs space (minimum 4 bedrooms and 4 washrooms, with a finished basement), and a pool to enjoy during the summer.

260 Glen Hill, Whitby

This is a detached home in the Blue Grass Meadows area of Whitby, for sale for $999,000.  It has the minimum required 4 bedrooms and 4 washrooms with a finished basement and a pool.

Photos courtesy of RIGHT AT HOME REALTY INC., BROKERAGE

39 Whitney Ave, Toronto

This is a detached home in Rosedale-Moore Park area of Toronto, for sale for $9.1M.  It has four bedrooms (plus one in the basement), seven washrooms, a finished basement and a pool.

Photos courtesy of CHESTNUT PARK REAL ESTATE LIMITED, BROKERAGE

2315 Mohawk Trail, Milton

This is a detached home in the Campbellville area of Milton, for sale for $2.7M.  It has four bedrooms (plus three in the basement), five washrooms, a finished basement and a pool.

Photos courtesy of RE/MAX HALLMARK CHAY REALTY, BROKERAGE

If your priority is specific features or attributes of a home, you can pay a wide range of prices depending on the location and variation within the features.  In this example of a family who wanted lots of space and a pool, you could spend between $1M to $9.1M and end up in Whitby, Toronto, or Milton.  While such a wide budget range is very unlikely, it showcases that if your priority is anything other than price, you can get what you want, wherever you want.

Priority #3 – Buying within a certain budget

For a buyer who has set (or had set for them) a maximum budget for their purchase, they will need to adjust the location in which they buy or the ideal features of the home.

Here’s three options if you’ve got a budget of $1 million and you’re willing to be flexible on location or features.

33 Ashmore Drive, Toronto

This is a detached home in the Stonegate-Queensway area of west Toronto, for sale for $995,000.

Photos courtesy of SUTTON GROUP OLD MILL REALTY INC., BROKERAGE

853 Fairbank Avenue, Georgina

This is a detached home in the town of Georgina, for sale for $999,000.

Photos courtesy of EXP REALTY, BROKERAGE

3476 Sommerville Drive, Clarington

This is a detached home in the town of Clarington, for sale for $999,900.

Photos courtesy of THE NOOK REALTY INC., BROKERAGE

As you can tell, if your priority is a specific budget and you were open as to location and features and attributes of the home, you can get very different homes for the same budget.  Do you decide that after budget, you prioritize living in Toronto?  If so, then you’re looking at a smaller home that needs updates.  If you’d rather spend your $1M on a home that is also recently renovated, you can buy an updated home up in Georgina.  Finally, if you think that for $1M, you’d like to have some more space, then you can buy a country estate in Clarington.

We hope you’ve enjoyed seeing how prioritizing one of the three fundamental variables in real estate can have a massive impact on the home you buy.  Whether it is location, features or price, if you focus on one, it absolutely impacts the others.  For most buyers, it is a juggling act between the three variables where you are trying to get the best possible combination of all three.  In order for that to happen you need to work with real estate agents who understand when compromising is necessary but who won’t settle for unacceptable trade-offs.  Get in touch with us and we’ll make sure you get the best possible mix!