Sweat the Small Stuff When Buying a Home

A man walks into a condo sales office and buys four units within a condo building. It sounds like a joke without a punchline, but there was a punch for this Irish investor buying in Sydney. One of the units doubled in value by closing time, two units had a small increase, and the fourth actually decreased in value. As I sell my condo in North York (Toronto), and sniff and sob over the lowly 6% appreciation it's had over 5 years, I can relate to the Irishman and the punch in the story.

What happened? Didn't Toronto experience a big boom in those five years? Not everyone has profited from that boom, as I can now say with first hand experience (after 45 days on the market, I finally accepted offer for $9,000 less than asking and a paltry sum more than I paid for it five years ago). The lesson I learned from this is to sweat the small stuff when buying a home.

The Irish investor explained that the unit that doubled in value was ground floor, with a lovely courtyard, a great view and sunshine in the evening. The two that had marginal increases were on higher floors of the building and street-facing, while the unit that didn't increase was above the entrance to the building. His lesson was that it was not just the location or quality of the building, it was the details of each unit that mattered a lot in the resale.

My condo story is similar. It's in a rock solid 6-year old building right across from a subway stop. It's minutes from the 401 highway and located conveniently by all the essential amenities including grocery stores, restaurants, gyms, community centres, and schools. So what went wrong? Well, here are the major issues:

• The area has ballooned with over 2,000 new units in the past 5 years;
• Most of those units are similar in size to mine;
• My unit is 1 of only 2 units in the building without a balcony; and
• My unit is above the main lobby entrance.

Virtually all of the prospective buyers noted they wanted a balcony and would prefer to wait for a unit with one. We lived in this condo for several years and did not miss the balcony - especially because BBQ's were not allowed on balconies. It's a quiet, warm and welcoming unit. But when you're buying a home you tend to have a list of things you are looking for - and for condo buyers - a balcony is usually one of the things. Similar units in the building have sold for up to $15,000 more - but they have a balcony and are not above the entrance.

How can you learn from my mistake?

1. Trust your instincts - if there is something that makes you hesitate when buying a home (and you can't fix it), don't buy it!

2. Watch for details like:

• Lack of sunlight;
• Close to elevators and entrances;
• Limited or no views;
• Lack of street parking; and/or
• Many new developments in the area that are similar to the one you are looking at.

If you find that a unit has some or all of these details, you may miss out on some great potential capital growth if you buy it! So, sweat the small stuff when buying a home, and then hopefully, when it comes time to sell, you will make your money back and then some!

Julie is passionate about real estate, and has spent the last eight years investing in real estate, writing about real estate investing and helping others make money in real estate. She shares her stories in a free newsletter that you can sign up for at http://www.revnyou.com

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