# Further advise on my condo?



## ShannonC (Nov 16, 2012)

I posted a thread a while ago last summer regarding a condo I was trying to sell and would appreciate some more thoughts/insights. I took it off the marketing in October as it had been listed for nearly 6 months without one offer. I've been living in it since then and it's been fine for the winter but with spring coming, I need to figure out what to do with it. 

So the details are: 

Paid: $198,500
Balance on mortgage: $79,000
Equity: $119,500

The realtor says come on around $199,000 which is where we were at before. I think this is reasonable given some other similar properties selling in the same building and area and we will bargain from there. 

The big issue is there is supposed structural damage in the parkade. The management company has been doing the assessment/getting quotes since last summer and it's just dragging on forever. He won't tell us anything but says that as soon as he knows an exact figure, he'll be sending out a letter to everyone. He once said to ball park it around 10k however. This was the reason it didn't sell before, so I imagine will be a big problem again. The realtor says we'll try and get around this by doing a 10k hold back for x months after it sells. 

So assuming the sale route, if they negotiate down to say 
189,000
then you take on 10k, realtor fees and 10k for the hold back, I'm left with a final take-home of around $90k. Losing 30k in the process. 

Alternatively, I talked to my broker and we could take 80k of the equity out, leaving 40k and the new mortgage + condo fees/taxes would be $1350 and I could rent it for $1450. I had it up for rent last summer for a while at this price and got quite a high interest. 

I'd almost walk away with the same amount of equity out and then have it renting... but the headaches that go along with that. 

So any thoughts on what option is financially wiser? 

And if I went the rental route and that assessment comes back at 10k, can I write this off as an expense or reduce my personal taxes as it's a loss?


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## Just a Guy (Mar 27, 2012)

Why not go back and read your original thread...nothing has changed in regard to what you should do, or the advice we can give...

You bought a 1 bedroom for too much, if you rent you can get someone else to pay for your mistakes, but rents won't remain high forever and you could still lose your shirt. Rental demand is still high in Edmonton, but even there, your rent is on the high side. Yes, you can declare the loss against your income.

Asking the same questions and hoping for different answers doesn't work...


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## Taraz (Nov 24, 2013)

Actually, I wouldn't be surprised if rents continued to go up here. There's extremely low vacancy in Edmonton. An interest rate hike would just increase the number of renters (as less people would be able to buy). Most importantly, the rental increases have lagged well behind the house price increases.


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## Potato (Apr 3, 2009)

If you can rent it for $1450 then that doesn't look too bad: a price-to-rent of just 130X. But, getting interested responses from an ad and actually signing a lease at that price are different things.

Don't get too hung up on the "loss" though -- that's just the cost of living and moving frequently, plus some bad luck on the special assessment side. It's already happened and there's nothing you can do about it -- and it's not like you're underwater, so if selling is the right move for you then just go ahead and do it. Plus you never know if there's more than one special assessment lurking...

As for whether you can write off the assessment, I don't think so as it came about from an issue that happened while it was your principal residence. If the assessment doesn't come in for years and you turn it into a rental now, you may be able to write it off.


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## none (Jan 15, 2013)

Cut your loses and bail. I think you can either lose 30K now or 50K 2 years from now.


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## andrewf (Mar 1, 2010)

Taraz said:


> Actually, I wouldn't be surprised if rents continued to go up here. There's extremely low vacancy in Edmonton. An interest rate hike would just increase the number of renters (as less people would be able to buy). Most importantly, the rental increases have lagged well behind the house price increases.


Rents aren't very responsive to interest rates. Inflation/income growth maybe, but not interest rates. ie, as rates rise, house prices go down, it's not that rents go up.


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## andrewf (Mar 1, 2010)

Potato said:


> If you can rent it for $1450 then that doesn't look too bad: a price-to-rent of just 130X. But, getting interested responses from an ad and actually signing a lease at that price are different things.


My personal rule of thumb is to use rent net of condo fees to calculate price to rent. The huge variances in fees between condos makes a big difference.


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## tygrus (Mar 13, 2012)

Some advice from someone who was once in your position. I had a condo I was trying to flip as pre-construction. The day the building was completed, a dozen units went on sale and I was unable to move mine because it had some view problems. I had it listed for 6 months before I was forced to rent it to cover the mortgage. Tried again a year later when that renter moved out, still nothing. Rented again. Finally after a few years I listed it again when that renter moved out and was able to sell it at a deep discount.

Some tips; 

1. Being a landlord always sucks no matter what people tell you. There are no trouble free renters.
2. Staging a condo works. Because they are basically all the same design so some interior features can really set it apart and play up its good features and play down its bad.
3. You can't sell a place with a renter in it. You will never be able to line up the times and then you are relying on the place to be show ready when the renter is out. Not going to happen. So you aren't living in it, you have to carry the mortgage until it sells. Expensive proposition.
4. Never let your condo be shown on weekends or after about 3 pm. Thats when the rest of the people that live there are home and they can really give a bad impression of the complex. You don't want a prospective buyer coming through just as your neighbor decided to light up a fatty for the night.

And lastly, I know it can be hard to sell something and take a loss. It hurts, but I can tell you the piece of mind of not having to worry about that place anymore is worth something too. Sometimes cutting your losses is the best decision.


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## Karlhungus (Oct 4, 2013)

I would rent it out for about 5 years. Average price for a condo during the height of the boom was $270,000. People will pay that again. In the meantime your equity will grow as well as price appreciation. Advertise on Facebook. A friend or a friend of a friend might see it and be interested. Might make the process a little easier.


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## nobleea (Oct 11, 2013)

I was in a similar position several years ago, also in Edmonton. Bought a new condo, lived in it for a bit, then got married and bought a house. Tried to sell the condo, no luck, so we rented it out. It's in a good location downtown and was a great size for a 1BR though not luxurious or executive by any stretch. Rented it for $1450 and this was 4 years ago. when their lease was up, rented to them again. When that lease was up, they moved out, I cleaned the place up (they made a mess of the hardwood) and then listed it. I knew there was a special assessment comign soon, but didn't know the amount. About a year after I sold, I found out through a friend what the assessment ended up being and it was far more than i was expecting (about 40K). In the selling contract I think I said I would cover the special assessment up to 10K and up to 6months out though there was no hold back.

Whatever they are telling you as a ball park figure for the special assessment, you can double it or more. condo boards will usually take the opportunity to increase the reserve fund at the same time to minimize the number of special assessments someone has to do. Also the special assessments usually take a lot longer than expected to get implemented. 
I would sell, at a loss. Do your 10K hold back for 8months or whatever. You'll probably get all that money back. By all means, tell the buyers that there is a special assessment coming up. You can 'ballpark' time and size unless you know otherwise, in which case you have to let them know.
Condo fees ALWAYS go up.


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## Feruk (Aug 15, 2012)

I didn't read the original thread, but you paid $198K for a one bedroom in Edmonton?? I think you overpaid BIG time. Now you're talking about taking equity out of it and buying a SECOND residence? I don't understand this strategy unless you believe markets are going to continue to rise. 

Keep living in it... Your rent expectations are high, but even if they weren't, your risk-reward on the "rent, take equity, and buy another place" route seems SUPER risky. I doubt you'll be able to sell the unit until the structural damage issue is resolved. As a buyer, unless the seller agreed to cover the cost to an unlimited amount (not $10K), I wouldn't even look at the unit.


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## nobleea (Oct 11, 2013)

Feruk said:


> I didn't read the original thread, but you paid $198K for a one bedroom in Edmonton?? I think you overpaid BIG time. Now you're talking about taking equity out of it and buying a SECOND residence? I don't understand this strategy unless you believe markets are going to continue to rise.
> 
> Keep living in it... Your rent expectations are high, but even if they weren't, your risk-reward on the "rent, take equity, and buy another place" route seems SUPER risky. I doubt you'll be able to sell the unit until the structural damage issue is resolved. As a buyer, unless the seller agreed to cover the cost to an unlimited amount (not $10K), I wouldn't even look at the unit.


You have no idea what the unit is like or where in the city it is. A decent 1BR condo (with a parkade) could go for 140-400K in Edmonton.


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## Feruk (Aug 15, 2012)

nobleea said:


> You have no idea what the unit is like or where in the city it is. A decent 1BR condo (with a parkade) could go for 140-400K in Edmonton.


Irrelevant. What makes me think this SPECIFIC unit is overvalued is the $200K tag on a max rent of $1,450/month. The math just doesn't go around no matter what Joe Schmoe might be paying next door. Either the unit is exceptional and can fetch more rent, or it's overpriced...


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## nobleea (Oct 11, 2013)

Feruk said:


> Irrelevant. What makes me think this SPECIFIC unit is overvalued is the $200K tag on a max rent of $1,450/month. The math just doesn't go around no matter what Joe Schmoe might be paying next door. Either the unit is exceptional and can fetch more rent, or it's overpriced...


You mean the price to rent ratio is off? That's true of all of Canada. Check out Vancouver if you think this is bad.


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## birdman (Feb 12, 2013)

The only reason it has not sold and you have not received any offers is price. If things are priced well they will sell. My son wanted to sell his condo in a hurry as he was moving and there were 5 others in they complex on the market at around 225,000 to 239,000. His was probably in the 225,000. range. We tried to sell it ourselves for a week at 215,000. asking and take 210,000. No action. Talked to a condo realtor who said price it at $220,000. and it will sell. Rec'd an offer in at a week at $215,000., we countered at 217,000. and paid the commission and it was a done deal. Its all about price. I do not think they are a hot commodity at the present time. Your concrete problems in the parking area creates another problem and can,t comment on that.


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## ShannonC (Nov 16, 2012)

Thanks for all the replies on this, it's definitely seeming like it may be wiser to just keep selling and cut my losses. Interesting with your story nobleea; this condo manager is really shady and there's been all kinds of talk going around with him. Apparently someone from the City of Edmonton is involved now (one guy who lives a few doors down has a connection) and when the city approached him on it, he backed right down and said it was just 'routine maintenance', so that really just confuses everything. Everyone feels really left in the dark by it all. That's good to hear the hold back worked in your case. I just thought as mentioned that no one would consider buying it with this going on. 

And no, I wouldn't be taking money to buy another place at this point but living in the town house I already have bought (have someone living in temporarily covering that mortgage).


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## ShannonC (Nov 16, 2012)

Thanks for all the replies on this, it's definitely seeming like it may be wiser to just keep selling and cut my losses. Interesting with your story nobleea; this condo manager is really shady and there's been all kinds of talk going around with him. Apparently someone from the City of Edmonton is involved now (one guy who lives a few doors down has a connection) and when the city approached him on it, he backed right down and said it was just 'routine maintenance', so that really just confuses everything. Everyone feels really left in the dark by it all. That's good to hear the hold back worked in your case. I just thought as mentioned that no one would consider buying it with this going on. 

And no, I wouldn't be taking money to buy another place at this point but living in the town house I already have bought (have someone living in temporarily covering that mortgage). 

Thanks for the tips on selling as well. Maybe I'll try doing more staging this time; generally we just tried to keep it very clutter free last time with as minimal furniture as possible.


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## tygrus (Mar 13, 2012)

In the two condos I flipped, I was cheap and bough the worst ones in the unit and they had terrible views. One looked out on the ground level into the busy parking lot. The other looked across to another building maybe only 20 ft away. These are really hard things to cover up, but for a few hundred dollar investment in some hi tech window shades they moved not too long after.

Extra amenities also go far in a condo development. If you have extra storage or parking those are usually the first sellers.

Staging does work otherwise developers wouldn't do it, but the trick is to not look like it has been staged cause that can come off as fake. Don't over do it though. Well furnished with some homey touches and super clean will go a long way. If you are allowed to paint the place, i would do that as well and make it a color scheme different than every other condo in the place but keep it neutral.


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## ShannonC (Nov 16, 2012)

Thanks, yah, you make a good point about developers. The view was one thing a few of the people commented on before as well - it's not too bad but it looks out onto a busier street in this area. I'm on second floor so not ground level though. Personally I don't mind it at all, but a few people said it was less than ideal. 

We do have a really good gym though and a steam room/sauna plus a games room with pool table, plus mine has two underground parking stalls, which is why I think it gets a lot of attention as a rental. Here are some pics. Any staging suggestions?


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## ShannonC (Nov 16, 2012)




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## Spudd (Oct 11, 2011)

I'm no expert on staging, but I think it looks good the way it is. My only concern is I'm not sure how close the barstools are to the TV. In the one pic it looks almost as though they will block a small bit of the TV. It could just be the angle the picture was taken at, though. But if it does look crowded, I'd just take out the barstools.


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## kcowan (Jul 1, 2010)

You need pictures on the walls. Cushions on the bed. Area rugs to break up the vast expanse of floor/rug. The TV seems to dominate. Not sure what to suggest there. Maybe doors that tie into the fireplace?


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## heyjude (May 16, 2009)

I agree that the TV with the speakers seems to overwhelm the fireplace. If you don't want to remove the TV, you might at least remove the speakers. If you follow kcowan's advice, go easy on the pictures and accessories. Less is more. For open houses, get a vase of fresh flowers, and bake some cookies. Apparently the aroma helps to generate an emotional connection with the home. The colour scheme is relatively neutral except for the dark curtains, bath mat and sofa and I would leave it alone.


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## sags (May 15, 2010)

Could you hang the flat screen and speakers on the wall, so a couple of coordinating chairs could be added, even if you have to use some you already own or could borrow? The focal point of the room should be the nice corner fireplace...........but a wall mounted flat screen adds to the contemporary look. Is there such a thing as a "corner mount" for televisions, so it could be put over the fireplace in the corner? That would look cool and provide some wall space.

The living room curtains appear to crowd out the fireplace when pulled open and appear longer than they need be so they aren't hanging straight up and down. Maybe some tie backs to the wall?

Vibrant scatter rugs and a few well chosen pieces or decorative wall art...............are great ideas from kcowan.

Overall though, that is a really nice looking condo. I like the design layout with the kitchen and living room open in concept. The white column and fireplace are nice touches.

If I owned it..........I would jazz up the bathroom with a tile shower, abundant shower heads, lighting and fancy faucets etc.

When I look at condo apartments, I am almost always disappointed with the plain Jane bathrooms. They often look like "rental" unit bathrooms.

When I notice one with a snazzy bath and kitchen...........they seem to sell quickly.

I think with condos..........the owner has to do something that elevates them from the pack.


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## underemployedactor (Oct 22, 2011)

Pleasant condo, but ditch the leather couch and the oak coffee table if you stage it to sell. Makes it look like a Residence Inn.


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## Siwash (Sep 1, 2013)

Condo market is SLOWING rapidly and IMO is about to collapse… this is an ugly time for the VERY overbuilt condo market… you are going to lose a fair bit of money… cut your loses and sell it for less… just get out… believe me, in 6 to 10 moths it'll be worth 5 to 10 % less..


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## ShannonC (Nov 16, 2012)

Thanks for all the replies - these are some really good suggestions. 

I could actually just remove the whole TV unit entirely. I don't use it - it's my brothers who was living in her previously when we had it up for sale (as I was living in the townhouse I own, which he's now in because he hated condo living). But that could be taken out entirely and I have two white barcelona chairs I could bring in, but they have a different vibe than the couch. 

I don't think that couch will be moving though until we sell or if it is, nothing else is coming back in here. It was a royal pain to get into our door...to be honest, i'm not entirely sure how it's getting out! I never thought of changing some stuff in the bathroom but I see your point. That would totally sell me on a place as well. 

I do have one large picture hanging on the wall opposite the TV, you can't really see it in here though. 

I definitely need to get this thing sold though; I'm just worried I won't get any offers at all until the assessment is over and I'd really like to be out by summer. We'll be relisting at the start of February so see how it goes.


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## marina628 (Dec 14, 2010)

I think genuine buyers and investors can look beyond the furniture ,it is a nice condo in good shape ,keep it clean and smelling nice .The people who buy may have a bigger tv than you ...


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## realist (Apr 8, 2011)

marina628 said:


> I think genuine buyers and investors can look beyond the furniture ,it is a nice condo in good shape ,keep it clean and smelling nice .The people who buy may have a bigger tv than you ...


Agreed! When we were buying my top two questions walking into a condo were 1) Can we fit a king sized bed? 2) Where would I put the tv/how would we set up the living room.


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## Four Pillars (Apr 5, 2009)

Condo looks great as is.

I'll 2nd the idea to add some art or something on the walls.

Another idea is to check out other open houses in the building and see what others are doing.


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## donald (Apr 18, 2011)

Nice looking condo(seems fair value)Like others have said i would think the reason that you are having trouble is got to be the structural problems(parking garage).
People might be thinking there is more than that perhaps with the building as a whole(tainted).
I think it would be easier to move once those issues are squared away and don't come attached(to much uncertainty)
Your targeting 1st time/young home buyers and their agents along with family/parents ect are prob saying to pass.
Others trying to sell in the building must be having the same problems(i don't think the way you are presenting it is the problem)


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## newtothegame (Jan 2, 2014)

Having just purchased a condo (new build, construction almost complete), I can offer my perspective...

I looked at a used unit that had a substantial discount, and found out why. The roof had big problems. Even the realtor told me to stay away. The last thing anyone wants is a big surprise just after moving in. Many that are in the market for a condo may not even be able to handle a $10,000+ repair.

Another thing I noticed, is that used units weren't really selling for much less then new builds. I'm not going to buy a 10 year old car, if a brand new car costs me only 10% more.

To offer a price perspective, my new build 680 sq ft one bedroom condo located in a relatively desirable area of Greater Vancouver was sold to me for $184,000 and that does include underground parking and storage.

Now, this building isn't quite complete yet, and every one bedroom unit has sold, so there are buyers that will buy at the right price, in the right location. Now, I agree that even $184,000 is pretty high for a condo, but it seems that there is no stopping real estate prices in and around Vancouver. People want to live here, it seems, and many have the means to pay that premium.


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## ShannonC (Nov 16, 2012)

Thanks again for the replies.Yeah, we had a few showings last time that my realtor said would have put in an offer had it not been for that structural problem. I just feel so frustrated because it's out of my control. They could take a year or longer to get that figured out - it's already been half a year or more, so I don't know what I'll do if it just sits and nothing. 

On the other side of things, I was looking at somewhat comparable properties in the same neighborhood of my townhouse and they are priced very high. I paid 375k for mine and these are much higher. 

http://www.realtor.ca/PropertyDetails.aspx?&PropertyId=13834499&PidKey=-1619660658
http://www.438-2500.com/listing/edmonton/allendale/e3357903
http://www.realtor.ca/PropertyDetails.aspx?&PropertyId=13872277&PidKey=-313057254
http://realestate.prosellers.ca/idx/details/listing/a496/C3587783/10734-69-AV

The last two are quite a bit nicer than mine, but mine still is much more classy in finish with granite, hardwood, a double glass shower ensuite. It's a townhouse though at 1400 sq. feet. I guess alternatively I could sell that one as well. The location is desirable right by the university and Whyte Ave (main street). If I could come out ahead in that, maybe it would counter balance what I lose in this.  That may be wishful thinking though. I'd really prefer the condo to sell first though if I could have my way. 

Would it sell at all faster if I just vacated the condo completely with no furniture or is that generally a bad idea entirely? I could do that later on as well and may have to once my brother moves out of that townhouse if I decide not to sell it.


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## the-royal-mail (Dec 11, 2009)

It's easier to sell the condo (which looks very nice btw) when it's unoccupied for sure. But ultimately you need to keep lowering the price until you attract bidders. Lower by $10K at a time until you get some interest. If the price is too low the bidders will run it up to market value. You can do this with a quick phone call to your realtor, maybe they could even "relist" you on MLS. Keep their feet to the fire and make them earn their 4%.


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## Spudd (Oct 11, 2011)

I think the general rule is that it's easier to sell if it's furnished when people look at it. The reason is because people have no imagination, and having it already furnished lets them see "oh so the couch could go here...". Plus it looks homier if it's furnished, instead of just big empty rooms.


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## newtothegame (Jan 2, 2014)

My own personal opinion?

Vacating it would be the best. Clean EVERYTHING. Make it look like new inside, even if that means new paint and carpet. If you aren't selling new, the next best thing is to give the _illusion_ of almost brand new.

Would you prefer to look at a used car with a bunch of the current owners junk in it? Or would you prefer to look at a used car that looks almost like a new car inside and out?

Now, we know the car is the same car whether it has old McDonald's bags in the back seat compared to the "clean" version that has had every knob and dial wiped down... Buyers don't look at it this way. They want it to look new and ready to move in, even if it's used.


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## ShannonC (Nov 16, 2012)

Yeah, I can see the point on the new car for sure, although nicely decorated could help as well. It'd be easier on me to vacate because I work from home so having buys constantly coming for showings really disrupts my day. But then I just have to be prepared for it to sit vacant until it sells and pay the mortgage. I know when I bought it, it was vacant as well and seems to me it sat for a while before I bought as well. 

I think next month I'll look into listing both the townhouse and the condo and see how they do. I'll price the townhouse higher, hope to make a profit and maybe that will help offset what I'm going to lose on this. And then just keep praying that assessment gets sorted ASAP. 

Even more disheartening, I saw a few single bedrooms listed in a building nearby for 159-165. Mind you they are much smaller (around 600 sq. feet - mine is 941) and mine has two underground. Those are in a 55+ building as well, so maybe that's why, but still, I cant' see it being good when those are so low and I'm up at 199. The ones in my building are around the 195-225 mark.


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## the-royal-mail (Dec 11, 2009)

199 is too high. You need to be at 190 if you want to stand out and sell.

Where's that newbie who said you always profit from RE? He is eerily quiet in this thread.


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## Four Pillars (Apr 5, 2009)

newtothegame said:


> Would you prefer to look at a used car with a bunch of the current owners junk in it? Or would you prefer to look at a used car that looks almost like a new car inside and out?
> 
> Now, we know the car is the same car whether it has old McDonald's bags in the back seat compared to the "clean" version that has had every knob and dial wiped down... Buyers don't look at it this way. They want it to look new and ready to move in, even if it's used.


Very poor analogy. His condo doesn't have junk or garbage lying around.

Would you buy a car that didn't have any seats or a steering wheel? 

I tend to think that a furnished condo is better than not, but it's important to really have less stuff rather than more. If he wants to empty the condo out - I don't think that's a bad move either.


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## Just a Guy (Mar 27, 2012)

You can't look at listing prices as comparables, you need your realtor to give you a list of recently solds. I bought a 2 bedroom recently for 72k in a building where a bachelor is listed for 85k and a 1 bedroom is listed for 140k. Needless to say the others aren't selling and haven't sold. Now that I bought in the building, those two will never sell for their asking prices (of course the owners overpaid, but they are trying to get their money back).

People can ask whatever they want, selling is another matter.


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## donald (Apr 18, 2011)

I'm pretending if i was a buying and a condo and it was empty,first thing i would think is why.
several thought i would think(though maybe this is just me)
-investor who has lost money
-divorce
-not desirable for owner to live
-owner is wealthy
A just and general sense their has to be red flags.
New builds only work imo for a empty unit,not a building that is several years old.
All the above,would make me think(if i wanted it)to throw a low bid in.
I don't think it's a good strategy.


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## donald (Apr 18, 2011)

What the hell is up with cfm,every time i type it's like this program adds mistakes!!!It's FU*Ked....anybody else?


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## marina628 (Dec 14, 2010)

You have a townhouse yet you gave us links for detached and semi houses.You seriously need to get a couple realtors to give you a good idea on the price of both properties.I probably would sell the townhouse and stick to the condo until that situation is resolved .


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## newtothegame (Jan 2, 2014)

ShannonC said:


> I think next month I'll look into listing both the townhouse and the condo and see how they do. I'll price the townhouse higher, hope to make a profit and maybe that will help offset what I'm going to lose on this. And then just keep praying that assessment gets sorted ASAP.


If one gain makes up the loss of another, you are ahead of many people. List 'em. Nothing to lose. If you aren't in a rush, tell the lowballers to take a hike.



> Even more disheartening, I saw a few single bedrooms listed in a building nearby for 159-165. Mind you they are much smaller (around 600 sq. feet - mine is 941) and mine has two underground. Those are in a 55+ building as well, so maybe that's why, but still, I cant' see it being good when those are so low and I'm up at 199. The ones in my building are around the 195-225 mark.


A second parking spot is good. For perspective, one new build that I viewed here wanted $20,000 for the purchase of a second parking stall, and many don't offer the ability to even purchase a second stall. And I've noticed that 55+ units typically sell for less than their "everyone" condo counterparts. I would assume this is simply due to supply and demand, since many condo owners are younger and starting out, as opposed to retiring to condo living...


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