How Much do we Spend? What’s a POTL?


Dear David,

We are renting and have been approved for a $400,000 purchase. I am comfortable shopping at that price, but my spouse wants to spend $300,000. Who do you think is right? – PLAYING IT SAFE

DEAR PLAYING IT SAFE: Your spouse is the person you’re living with and of course they need to be happy. Take comfort in the fact that this difference of opinion is pretty common. It’s not unusual for buyers to tell me they’re approved for a certain amount, but would like to spend less.

The real decision-making happens when you compare your wish list to what’s in your budget. When shopping with clients who have differing opinions about how much to spend, I’ll typically ask their permission to show them homes in each price range so that they can make an educated decision about which way to go. Nine times out of ten, an increased budget (especially a 33 percent increase, as is the case for you) yields a pretty dramatic difference in what’s available.

Spending within your comfort level is important. That said, when you’re shopping in a market like ours that’s typically one of the most stable in Canada, a home closer to the top of your range might actually be one of the best investments you can make. Before you make a decision, think about whether a lower-priced home will fit your needs in a couple of years. If it’s something you’re likely to grow out of, it may end up costing more than you expect in terms of additional moving expenses and inconvenience. All things considered, having room to grow may actually end up saving you money in the long run.


Dear David,


DEAR CONDO SHOPPER: POTL stands for “Parcel of Tied Land”, a real estate entity that’s typically found in a townhome-style condominium complex. The POTL is made up of a freehold parcel of land and the home that sits on it (a standard condominium unit). Because it’s located within a condo complex, the POTL is inextricably “tied” to a share of the property’s common elements, or “Common Elements Condominium” (CEC). These refer to whatever amenities the condo corporation manages and often include such things as roads, sidewalks, parking lots and playgrounds.

The POTL and CEC are separate by definition, but are purchased as a package deal (think burgers and fries). When a buyer purchases a condo in the complex, the POTL and CEC are assumed at the same time and under the same mortgage.

If you’re considering this type of unit, you’ll want to review the status certificate with your lawyer and Realtor, keeping in mind that there are maintenance costs associated with a home like this. The age and condition of the home and the common elements should be considered when ruling a purchase in or out.