What does x equal? You spent four years in high school trying to answer that question and, if you were anything like me, four years trying to figure out why the heck you should care. I don’t want to bring you back to those dark academic times, but I’ve worked out a foolproof equation for new homebuyers that will resolve most of their real-estate conundrums.
Let’s use the typical x + y = z model as a starting point—stay with me here, folks. There are three major variables involved in sourcing your perfect home, minor quibbles over parking and crown moulding aside: location (L), price (P), and style (S). By plugging these factors into the formula above, once you figure out two of the three, I believe you can easily solve for the third. This will ultimately help determine what type of home you’ll buy, where you’ll buy it, and how much you’ll spend. That is, if you have a vague idea of your ideal neighbourhood (L) and an established budget (P), you can figure out whether your future abode will be a condo, a semi, or a freestanding home (S). Let’s break down the variables a bit further with real-life examples:
Location (P + S = L): With your working budget and preferred home style ironed out, I can suggest neighbourhoods that fit your criteria. For example, if you want to spend $700,000 on a three-bedroom, two-bathroom semi-detached house, you’ll likely be looking at Leslieville, Roncesvalles, and a small handful of other neighbourhoods around the downtown perimeter.
Price (L + S = P): If you roughly know the style and location of your ideal home, I can estimate what it will cost you. What does a simple one-bedroom, one-bathroom unit with parking cost in the St. Lawrence Market area? About $350,000. What is P equal to when you want a detached bungalow on a 30-foot lot with a private drive in East York? Six-hundred thousand dollars. Price is usually the unknown variable for most buyers—my clients often know what they want and where they want it, but have no idea how much they’ll have to pay for it.
Style (L + P = S): With price and location settled, I can tell you what your new house might look like. If your mortgage is pre-approved for $400,000 and you want a condominium in King West, you’re looking at a one-bedroom space that includes a den, but not parking, in a new building. Or you could choose to stretch your dollar even further if you go west of Bathurst towards Strachan, where $400,000 might garner you a two bedroom, two-bathroom setup.
You can play around with the formula a bit, too. Let’s say you thought your price and area were locked in, only to find that the style wasn’t exactly what you wanted. Changing one variable necessarily changes the others, so if you can’t find the size or layout of condo you’re searching for around the $400,000 range in King West, change your location. Push closer to Liberty Village, and voila: more options.
Too many buyers simply try to ignore the math, thinking they can have it all, and fall out of touch with reality. If you’re looking for a hard loft with 14-foot ceilings, exposed yellow brick, and huge picture windows, I could show you a few locations where you’ll find it, then estimate the price associated with those areas. But if your price and style requirements put you at Broadview Lofts in Riverside and you’re dying for Queen West’s Chocolate Company Lofts, you can either accept the result of your equation or revisit the variables once again. “Well, I want that, but I want it there” will not get first-time buyers very far.
The beauty of this equation is that it works every time, but the drawback is that it can provide a rude awakening for homebuyers who aren’t willing to be flexible with their demands. And unlike high school, where you could cheat off a friend, there are simply no shortcuts in today’s real-estate market.