Are You Ready to Buy a Condominium? - Sutton — Canadian Real Estate Listings & Agents | Sutton.com

Are You Ready to Buy a Condominium?

11 July 2018
Sutton

Are You Ready to Buy a Condominium?

When shopping for condominiums, hopeful buyers may view several properties in a short period of time. When they find one they like, they usually must make an offer before receiving the minutes from most recent AGM and regular strata meetings. These minutes provide insight into the state of the condo and its financial management.

Within a fixed timeframe, the potential buyer must review these documents and try to resolve any questions they may have with the assistance of their Realtor®. During this conditional offer phase, most buyers also purchase a home inspection. It provides peace of mind and is usually a requirement of mortgage lenders.

At the same time, buyers may be trying to sell their home, filling in mortgage paperwork and communicating back and forth with their home inspector and Realtor®. Attractive properties often receive multiple offers, which add to the time pressure.

Too often people overlook important aspects of a property in the rush to make a purchase. Sometimes these oversights are mere annoyances while others have financial implications. A common example is a special assessment.

When you obtain the minutes from the annual general meeting (AGM) and strata meetings, read carefully for information about major repairs/upgrades and special assessments. Repairs such as fixing siding after a wind storm or replacing a roof can be very expensive. If the condo’s contingency fund is not adequate to cover the expense, it may result in a special assessment of thousands of dollars per unit.

By creating your personal checklist from the following options, you can be prepared to make an informed decision in a short period of time:

Top three must-haves

Price range, location, amenities, size, type of construction… the list is unique for everyone. It is rare to find a home that meets every expectation and you may need to make trade-offs (e.g., giving up square footage in exchange for a central location, or foregoing a property with a pool for lower management fees). Establish your top three must-haves to help narrow down your search.

Air conditioning

There are two main types of air conditioning systems in apartment condominiums and each comes with unique pros and cons:

• Wall-mounted units that vent hot air to the outdoors are relatively inexpensive and easy to replace, although they can be noisy and conspicuous.

• Central air is fairly quiet and inconspicuous and involves duct work that connects to a heating, ventilation, and air conditioning (HVAC) unit. In a house, the unit may be located outdoors or vented to the outdoors, but in a condo, it is often located in a laundry room ceiling with no way to vent outdoors. Instead, hot air moves across coils to be cooled by refrigerant and water. Repairs can be costly, and replacement is easily $5,000 or more.

Water heating

Determine how hot water is produced for the condominium. If the unit has its own water heater, it will typically be the old-style tank heater, which requires replacement approximately every 10 years. A newer technology is an on-demand water heater that is mounted on the wall. It heats the water only as needed instead of storing a large quantity. On-demand water heaters are smaller and more energy efficient than tank heaters, but do require de-scaling according to the manufacturer’s specifications to maintain the warranty.

Electric vehicle

If you have an electric car, will the strata allow you to plug in? Some condos as do not allow car owners to plug in, even when they wish to pay for electricity, because the electrical system in the garage may already be at peak capacity due to lighting, ventilation, etc.

Parking

Insist on seeing the parking spot(s) and ideally measure. Consider the size of the neighbouring vehicles.

Rentals (whole unit)

Does the building allow rentals? Are they short-term, long-term, and/or unlimited in number? Short-term, unlimited rentals can create security issues. Many people prefer complexes that allow a limited number of long-term rentals. This gives homeowners the ability to earn money, if they wish to travel for several months at a time.

Rentals (partial unit)

People who are new to condominium living may be surprised by the extent of strata rules. In addition to restrictions on unit rentals, by-laws may also prevent renting space within their owner-occupied condo. This means if an owner wishes to find a roommate to earn extra money, that may not be possible. To prevent people from bending the rules, some stratas even specify that occupants must be immediate family and spouses. By-laws are often backed up by fines and, if the fines are not paid, liens can be placed on the property.

Guest suite

A condominium complex with a guest suite is a great option for visiting friends and family. Guest suites are usually very affordable compared to a hotel.

Understanding your requirements and knowing what to expect gives you an advantage in a competitive real estate market.

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