4 Condo Questions You Should Have (And Not Feel Bad Asking)

Tyson HinschbergerAdvice, Planet Realty, Real Estate News

Let’s start with the obvious: Buying a condo has a number of key differences from buying a freehold detached home. As with any major purchase, it’s certainly important to do your research before jumping into anything with both feet. Being ill-prepared can lead to costly mistakes, especially when our home is the biggest investment most of us ever make.

Below is a list of important questions to ask prior to buying into a condo development:

What is a condo?

Let’s start from the beginning on this one. The word “condo” often gets associated with either a towering residential building with a hundred-plus units, or a beachside villa. Great as both may be, “condo” -or condominium, if you want to sound really smart- actually refers to the type of ownership you’re buying into, not the building itself. Condos can even include townhouse complexes or entire communities.

Not only do you own your own “unit” within a complex, you also own a proportionate share of the common areas. In a building, this can include the elevators, hallways, amenities, etc., as well as the exterior land (parking lot, greenspace, landscaping). As a buyer, you become responsible for the maintenance of your unit, but also for common areas, often by way of paying common expenses or condo fees to the condo corporation or a property management company.

What do condo fees include?

In every condo, there are costs beyond your monthly mortgage payment and property taxes that you must consider. Both the amount and components of a condo fee can vary greatly, depending on where you buy. One of the biggest considerations to make is the types of amenities you desire. A condo with high-end amenity spaces (lobby, theatre, etc.) will naturally have higher condo fees than a building which doesn’t have any amenities of note. A pool is one of the most debated amenities among potential buyers because of their monthly maintenance. While they’re nice to have and look at, consider how often you will use a pool in your building, and make sure the additional expense is justifiable.

The age of a building can also increase the condo fees. While it may seem counter-intuitive to pay more to own an older unit, an older building requires greater maintenance expenses. Also, look over the financials and see the accumulation of the condo’s reserve fund. A reserve fund covers major expenses like a new roof or the re-finishing of a parking lot. Without a strong reserve fund, you could be on the hook for an unforeseen rise in your condo fees, should either of those need replacing.

On top of maintenance and amenity costs, and reserve fund contributions, some condos will have utility charges bundled into the condo fees as well. This makes for a huge difference, especially if one $300 condo fee includes heating, cooling and water; and another one doesn’t.

Bottom line, find out what is included in your condo fees, and what you’ll have to pay on top. It’ll save you a lot of hassle down the road.

Will I be subjected to any rules or regulations?

The simple answer here is: “Probably, yes”. The number and flexibility of the rules varies from condo to condo, but there will likely be some degree of control put in place. Some of the most common rules surround:

Unit appearance (door/hallway decorations, window coverings, balcony contents)

Pets (size, number, noise)

Access (number of visitors, guest parking)

Noise (party limitations, quiet hours, amenity room closings)

It’s important that you find a condo that suits your lifestyle. After all, it’s a major key to enjoying your new living arrangement. There’s nothing worse than feeling restricted within your home, so make sure that the rules are conducive to the way you live.

What’s a better purchase, a new condominium or a re-sale?

At the risk of being blatantly non-committal, it’s hard to say whether one choice is better than another.

From CMHC Condominium Buyers’ Guide, 2009

Advantages of buying a new condominium may include:

A lower purchase price (depending upon market conditions);

More choice of locations within the building (if applicable);

A broader range of options and/or upgrades;

Newer buildings have less risk of having to undergo costly, noisy and intrusive repairs and renovations;

New home warranty protection.

[With those in mind, you can easily compare them to the advantages of buying an existing condo on the resale market.]

Advantages of buying a re-sale condominium may include:

You get what you see.

There are no lengthy waiting periods before you can move in unless provided for in the condition of sale.

Deposits [not to be confused with down payments] are often much lower for re-sale purchases and there is no HST.

You can check out the condominium “community” in advance to see if the corporation is well run and the people who live in it are compatible with your needs and lifestyle.

Older condominiums can have larger unit sizes.

Whether you buy a new or re-sale condo, here are a few personal tips:

1. Builders always have a target market in mind. Get a feel for what that market is, so you live in an atmosphere wherein you’re completely compatible.

2. Spend some time in the unit. Especially if it’s your first condo. Moving can be pricey, you want to make sure you get it right the first time. And a condo can be more of an adjustment for some than others.

3. Look at a few condos. Especially with new developments, the first impressions are great. Everything is clean and new. But that fades, so make sure the meat and potatoes of the unit is to your liking as well. By comparing multiple buildings and becoming a more educated buyer, you certainly decrease your chances of experiencing buyers’ remorse.

4. Act quickly with new developments. Not to contradict my previous point, but if you really like a unit, chances are someone else will too. Odds are, you can get a few of those units in the building, but not necessarily with the same view or options. New developments here allow a 10-day “cooling-off” period wherein you can change your mind and back out of a deal without penalty. After all, you’d hate to miss out on that perfect unit.

Best of luck in your search, and as always, if you have questions, leave them in the comments below, or email info@planetrealty.ca to get all the answers you need.