Toronto Real Estate | Judging a House from the Inside Out

You might think youÕre buying a house, but according to Kara Reed of Chestnut Park Real Estate, ÒyouÕre really buying a lifestyle thatÕs associated with a neighborhood.Ó And whether that neighborhood has access to the TTC, the right schools nearby and is convenient to shopping and services all adds up to valueÑvalue that is likely to be maintained regardless of the specifics of the house or even the market. ÒIf the market tanks, better locations will always be hit less hard,Ó says Reed.

But next-door to that location, location, location can be almost as good. In TorontoÕs hot market, many prime areas have been priced out of reach of average buyers says Helga Teitsson, a Toronto-based real estate broker with Re/Max Hallmark Realty. And thatÕs pushing smart money into adjacent neighborhoods, so that Òthe desirable neighborhood starts to spread,Ó she says.

ÒAs a renovator, buying the worst house on the best street is a great idea,Ó says Marc Paill}, a sales representative with Bosley Real Estate in Toronto, because it allows you to quickly boost equity or profit (depending on whether youÕre staying or moving on). Buy at the top end of your streetÕs value and there wonÕt be much you can do to boost that value. Plus the reno route can be your entr}e to an area that would otherwise be financially out of reach.

But if the idea of dedicating your weekends to home improvement projects makes you shudder, this truism will quickly ring false. And it doesnÕt apply if thereÕs a problem with the house that canÕt easily be addressed, such as an oil tank buried on the property or a railway track that runs through the backyard.

What this truism actually means is as much debated as pricing strategies themselves. Yes, you want to price to sellÑbut whatÕs the right price? Some sellers deliberately price low to encourage a bidding war. It can work, says Paill}, if the house is near perfect: in excellent shape and in a desirable neighborhood. Other sellers prefer to price in accordance with the highest sale on the block. ÒThey think Ôso and so down the street sold for half a million, my house is worth at least that much,ÕÓ says Teittson.

But both routes are risky. Going low in the hopes of sparking a bidding war can just as easily backfire, leaving the seller with offers that donÕt exceed the too-low price, while pricing too high can mean youÕll just have to cut the price later. Not surprisingly, the experts suggestÉconsulting the experts. Have the house appraised by one or more realtors and ask for a run-down of what other homes in your area have sold for. Then make a cold-eyed comparison: how does your house really stack up?

So there you have it, some tough questions to ask. But in the end the questions will yield answers that make your investment all the wiser.