Expert: Jessica Bryan - 12/22/2005

Question
Hi Jessica-

Here is my problem. Im a single guy looking for a condo in an exlusive condominiun complex. I found an apt complex comverted into a gated condominium complex today. So I went to look at it.

I found a condo I liked. It was a tiny 1bed/1bath second floor condo with a fireplace. (555 sq ft.) Beautiful! It was 89,900k. But it was already sold!

Then the real estate agent showed me another condo in that same complex. This other condo was also a 1bed/1 bath with a awesome view of the pond and facing the woods! The best view in the entire complex! But it didnt have a fireplace and it stunk like stale cigarette smoke. It was priced at 99,900k because it was 626sqfeet.

I liked the smaller 1b/1b better with the fireplace. Problem is there are none left.

My question is this....
Just because the 1bed/bath condo with no fireplace is selling for 99,900k is 71 sq feet bigger does it mean I will get a better return on my investment? I plan on living in it for 5 years. I'm still paying more.
He told me because of the view it will sell quicker and I will make more money on it!...Maybe he is right. But it will probably break my bank before I sell it.

The extra 10k for 71 sq feet more doesnt seem worth it for a 1bed/bath. To me a 1b/1bath is the same regardless of sq footage. I couldnt afford 2bed/1bath

BUT, the good news is that the complex is in an excellent location. So in essence im paying for the location.

So I plopped down 3k in escrow to reserve the condo with the good view. I have 15 days to decide and I hope I can get my money back without a struggle if choose not to buy condo within 15 days.




Can you tell me what is smartest thing to do? To buy or not to buy? MY budget is barely stretching it. But I think I can turn a profit when I sell because I have 15k in reserve money in the bank.

Thanks, Todd

Answer
Dear Todd;
You didn't say where you live (what state) and I don't pretend to know the market in all states, but I do know that everything is negotiable--especially at this time of year. The fact that this was the last unit left may mean that Buyers didn't perceive this unit to be the best one or worth the higher price.  I would check to see how long it has been on the market and make sure that you aren't paying more when you don't need to.  With that in mind, a home that has a nice view is going to be worth more (probably $3 or $4 thousand) than another without the same view.  You can also figure that the extra square footage is probably worth an additional $5 - $7 thousand more.  However, I would subtract about $3,000 from the value for no fireplace especially if it is in an area where the climate is colder in the winter.  Basically, I think that you should offer $94,000 and let the sellers (perhaps)counter at $98,000 then split the difference at $96,000.  This would be a good value and I do think that in a couple of years you would recover the difference in price.  If the Sellers are not willing to negotiate, then of course, bite the bullet and go for it. If there is nothing left, then the price goes up.  
Good luck and best wishes,
Jessica Bryan
Managing Broker
House to Home Realty Services