Thinking of purchasing a condo? What you need to know to avoid costly mistakes.
Purchasing a condo can be a daunting task. Where does one start? There are so many buildings to choose from and so many criteria to consider. Taking an organized and methodical approach can take a lot of the stress out of what should be an exciting time in your life.
Step1: Establish your budget
The first step is to establish your budget. Speaking with a mortgage representative at your bank or a mortgage broker (you should speak to both and shop rates to ensure you are getting the best deal) to understand the maximum amount they will lend you is the first step. Next, understanding how much that will cost per month and finally deciding how much you are comfortable with spending to maintain your lifestyle and avoiding becoming house poor.
Step2: Prepare a wish list for your ideal home
While your bank and/or broker is/are busy working on the financing end it is a good idea to start to put together your wish list for your new home which should include:
Location (proximity to where you work and play, your friends, transit)
Amenities (gym, pool, concierge, restaurants, parks, nightlife, services)
Price per square foot (how many square feet can I get while staying within my budget?)
Floorplans which fit your budget (are they efficient and a good use of space?)
Parking (do you need parking and can you get it within your budget?)
Locker(do you have a lot of sports equipment, camping gear, seasonal things, clothes?)
Step3: Find the best realtor and find your home
Prioritize these items and find the best realtor. An experienced realtor can use this information to come up with creative solutions to your needs to get you the most value for your money. Working with the most experienced and knowledgeable agent in your desired area is the most important decision you will make to find the best home for you and to avoid costly pitfalls.
Step4: Assess financial health of Condo Corporation
When you purchase a condominium you not only buy your unit but you also become a percentage stakeholder in the condo corporation so you want to make sure that corporation is financially sound.
Here is a list of documents you should go through while assessing a condo corporation:
Heat pump rental agreements
Condo corporation by-laws, rules and regulations
AirBnB/short term rentals
Percentage of units rented in the building versus owned.
All of the above are important and if they are not known or determined they can cost you a lot of money and/or aggravation. Make sure you ask questions and get definitive answers.
Purchasing a property is a “process” and not an “event” so take your time. Work with someone who is client focused versus commission driven and who is also willing and more importantly qualified to be a conduit of knowledge rather than a salesperson. The goal: to obtain guidance and information to make you an educated consumer so that you can make well informed decisions.