The saying “Don’t just take their word for it” is true for most cases in life, especially homebuying. When house-hunting, you shouldn’t accept the asking price of the home without questioning it. You should check the price in a house value calculator in Canada, do the required research, and then trust the number. However, there’s a tricky bit involved here. At times, two seemingly similar homes can have two very different price tags. Let’s dig into the possible reasons behind this and figure out the best approach you can take in this situation as a homebuyer. 

Possible Factors Behind Drastically Different Price Tags of Two Similar Homes

Location, Location, Location…And Micro-Location!

Sure, both the houses are in a good location/neighbourhood. But you need to see where their exact spots are in the neighbourhood. Houses on a quiet cul-de-sac backing into a beautiful park will have more demand. On the other hand, houses that face a busy main road or a commercial area may not attract much attention and, hence, have a lower price tag. Proximity to amenities also matters. A home closer to schools, grocery stores, or public transit stops can be more expensive. 

Bigger Yard or Better Position Equals Bigger Price Tag

One home might have a bigger backyard, perfect for a pool or garden. Meanwhile, the other one might have a smaller, oddly shaped yard that feels cramped. The position of the lot counts too. A corner lot often means more privacy, which some buyers love. 

Condition and Upgrades Make a (Big) Difference

Two homes might look the same from the outside, but inside, they can be worlds apart. One might have gleaming hardwood floors, a renovated kitchen or new windows. On the flip side, the other could have outdated fixtures, worn carpets and a kitchen that looks like it is straight out of the 80s. We can bet the updated home will cost more. After all, buyers are willing to pay more for move-in-ready homes with modern upgrades. 

Better Layout and Flow Makes a Home Feel Right

Two houses with the same square footage can have very different prices depending on how they are laid out. If the home’s layout feels more functional and flows better, it is naturally going to attract more interest and a higher price. But if the house has a more chopped-off layout with small, closed-off rooms, buyers will not find it appealing. Even simple things like how the kitchen connects to the dining room or whether there is a bathroom on the main floor can influence a buyer’s decision. 

Timing is Everything – Market Demand Plays a Huge Role

The listing time of the house can have a huge impact on the price. If one house was listed during a hot market with lots of buyers but not enough homes, it might have gotten multiple offers, driving the price up. Meanwhile, the other house might have been listed during a slower season with less competition and, hence, the lower price tag.

The Story Behind a Home Can Shape Its Price

Every house has a history, and that history can affect the price of the property. If the house was the site of a crime or was previously a rental property (more wear and tear), it could be priced lower to attract buyers. On the other hand, a house with a positive history – like being maintained by the same owner for decades – can be more appealing and, therefore, more expensive.

Sometimes, It Is Not About the House – It Is About the Seller’s Situation

Finally, it often comes down to the seller’s motivation. If a seller is in a hurry – maybe they have already bought another home or are relocating for work – they might price their home lower for a quick sale. On the flip side, a seller who is not in a rush might hold out for a higher price, even if it takes longer to sell.

So Which One Should You Buy – The Cheaper or the More Expensive Home?

You need to do your due diligence before making the final call. You must make sure the cheaper house won’t end up costing you more down the line. On the other hand, if you are leaning toward the more expensive home, double-check if the high price is truly justified.

Buying the Cheaper House

It’s obviously tempting to go for the cheaper house and save more money. But be careful; the house could come with hidden issues that could end up costing you more money. To avoid this, here’s what you should do:

1. Figure out the reason why the home is priced lower – near a noisy area, has an awkward layout, or the seller needs to move out quickly. Think about whether these issues are things you can live with or are deal-breakers for you.
2. A professional home inspection is a must in this case. The home inspection process can help you figure out the true condition of the house.

If you find no deal-breaking issues and are truly confident about the house, then – and only then – you should move forward with the cheaper house. Remember, the goal is to get a good deal, not a headache. 

Buying the More Expensive House

At times, you may consider every angle you can think of and still struggle to see why the price of a house is so high. Yes, this can indeed happen. Some homes are simply priced high for all the invalid reasons –

• The seller might be emotionally attached to the home and price it unreasonably high. 
• The seller may be trying to recoup the cost of expensive upgrades that don’t actually add value to the house. 
• The seller could be setting the price by relying on the estimate provided by a house value calculator in Canada. These tools just give an estimate; they do not take into account buyer preferences, specific conditions of the house or local market conditions. 

So before you convince yourself that a higher home price equals better value, take a step back and do your due diligence. Dig a little deeper and find out why the house is priced higher than similar homes in the neighbourhood. If possible, get an appraisal to see if the price is fair. An appraisal can give you a clear, unbiased value based on the property’s condition, location, and recent sales of similar homes. If you find that the high price is truly justified, then it could be worth your investment. 

A House Is a Big Investment – Take Your Time

Buying a home is one of the biggest financial decisions you will make, so don’t rush it. Do your research, ask questions, and get the necessary inspections and appraisals done. At the end of the day, the right home for you is the one that meets your needs, fits your budget, and makes sense as an investment. Trust your instinct, but back them up with solid research. Happy house hunting!