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!