Are you considering Buying a Condo? Whether you're a first-time homebuyer, downsizing, or looking for an investment property, condos can offer an attractive blend of affordability, amenities, and low-maintenance living. This comprehensive guide will walk you through some of the key steps and considerations for buying a condo.
Understand What You're Buying
When you purchase a condo, you're buying more than just your individual unit:
- Individual Unit: This is your private living space that you own outright.
- Common Property: Shared areas like hallways, elevators, and amenities that you co-own with other unit owners.
- Exclusive-Use Common Property: Areas assigned to your unit, like balconies or parking stalls, which you don't own but have the exclusive right to use.
- A Share in the Condominium Corporation: This gives you voting rights on condo matters and the responsibility to pay condo fees.
-Condo Fees: Areas outside of the boundaries of the individual unit are shared expenses of the condo owners. Condo fees are paid to the condo corporation for all common area maintenance, up keep, enhancements, and repairs. In Alberta, landscaping, utilities, security, waste removal, condo management services, and building insurance are often included in the condo fees, with a portion of the fees going into the condo reserve fund for major repairs or improvements.
-Condo Property Management : Normally the condo corporation contracts a property or condo management service. This service is directed by the directors of the condo corporation and usually looks after the daily affairs of the condominium, such as; collecting condo fees, enforcing condominium rules and/or bylaws, contracting services through third parties, and building maintenance and repairs.
Determine Your Needs and Budget
Before you start your search consult a mortgage professions to define your financial situation and clearly define your requirements:
- Size and Layout: Consider how much space you need and your preferred floor plan.
- Location: Think about proximity to work, schools, amenities, and public transit.
- Amenities: Decide which shared facilities are important to you (e.g., gym, pool, parking).
-Storage: Is there additional storage in the building for items such as bikes or tires.
-Unit location: Decide what noise factors or security concerns there may be depending on where the unit is located in the building.
- Budget: Factor in not just the purchase price, but also:
- Monthly condo fees
- Property taxes
- Potential special assessments
- Mortgage payments and insurance
Pro Tip: Get pre-approved for a mortgage to understand your budget and to strengthen your position when making an offer. Check out Pro Search to connect with an experienced expert.
Research the Local Condo Market
Understanding the local market is crucial for making an informed decision:
- Market Trends: Research price trends. Are condo prices rising, falling, or stable? Check out real estate industry websites such as https://creastats.crea.ca/mls/redd-market-conditions for local market conditions and realtor.ca for available listings. Is there high supply (buyers market) or not many properties available (sellers market) or no change (flat market)? Market conditions determine price and potential for negotiations. For investment market trends, check local rentals and rental rates on high traffic web sites such as https://www.kijiji.ca/b-apartments-condos/alberta/c37l9003
and realtor.ca in the rental section.
Thoroughly Review Condo Documents
When you make an offer on a condo, you have the right to review important documents:
- Condominium Plan: Shows the boundaries of units and common areas.
- Bylaws: Rules governing the use and occupation of units and common property.
- Financial Statements: Provides insight into the condo corporation's financial health.
- Reserve Fund Study: Details the long-term savings plan for major repairs and replacements.
- Board Meeting Minutes: Can reveal ongoing issues or upcoming projects.
Pro Tip: The offer to purchase should include the request for the above documents as a condition prior to completing the purchase. Your real estate lawyer is the professional to examine these documents and help spot potential red flags that you might miss.
Understand Condo Fees
Condo fees are a crucial consideration:
- Condo fees typically cover building utilities, property/condo management services, insurance for common areas, and contributions to the reserve fund.
- Understand what's included in the fees and what's not (e.g., utilities, parking).
- Look at the history of fee increases. Stable, moderate increases are generally a good sign.
- Be wary of fees that seem unusually low or high, as this could indicate underfunding or poor management of the reserve fund.
Research the Property/Condo Management Service
The management service for a condo corporation is a critical part of choosing the best condo for you. Take the time to ask for the name of the property management service:
-The quality of the management service directly influences property value. Poor maintenance, low quality repairs or restoration, over enforcement of bylaws, or over charging for services, all can contribute to problems that can depreciate the market value of your potential condo.
-If a property management or condo management company has removed the reviews from their Google profile or social media sites, this may be a red flag indicating their reviews have been less than complimentary. Speak with tenants or owners in the condominium building about the management service and pay special attention to the upkeep of the property.
Pro Tip: Always Google the property/condo management service the condo corporation contracts to and read company Reviews. Social media, internet searches, and speaking with owners or tenants in the building can provide valuable insights into the property management's reputation and professionalism.
Get a Professional Inspection
Even though you're not responsible for the entire building, a professional inspection is still important:
- Focuses on your specific unit and any exclusive-use areas.
- Can identify potential issues within the unit that may not be apparent to the untrained eye.
- May include a review of common areas, though access might be limited.
Make an Offer and Negotiate
Once you've found the right condo, it's time to make an offer:
- Determine a fair offer based on market conditions and comparable sales.
- Include necessary conditions, such as:
- Financing approval
- Satisfactory review of condo documents
- Satisfactory home inspection
Pro Tip: Don't be afraid to negotiate not just on price, but also on terms like included appliances or move-in date.
Close the Deal
Once your offer is accepted and conditions are met:
- Finalize your mortgage arrangements.
- Have your lawyer review all documents and handle the transfer of ownership.
- Arrange for home insurance for your unit.
- Plan your move and notify relevant parties of your change of address.
Prepare for Condo Living
As you prepare to move into your new condo:
- Familiarize yourself with the condo bylaws and rules.
- Understand the process for booking amenities or making maintenance requests.
- Consider getting involved in the condo community by attending meetings or joining the board.
Buying a condo can be an excellent choice for many, offering a blend of affordability and convenience. By following these steps and working with experienced professionals, you can navigate the process with confidence and find a condo that meets your needs and budget.
Remember, every purchase is unique, and it's essential to tailor your approach based on your specific circumstances and the local market conditions. Need help finding real estate professionals to guide you through the condo buying process? Use our Pro Search feature to connect with experienced agents and other experts in your area.
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