7 Vital Things to Consider When Buying a Condo
7 Vital Things to Consider when Buying a Condo
Did you know that when you purchase a condo, you’re not only purchasing the unit where you’ll live, but you’re also effectively buying shares in a corporation? As an owner, you’ll be responsible for a share of the operating and maintenance costs for the entire condominium. If that’s a high-rise, that includes things like elevators and parkades, both of which are very expensive to replace. And for townhomes, it most often means you’ve got shared responsibility for exterior maintenance including roofs, windows and the parking lot, all of which cost a pretty penny.
When you’re shopping for your next home of course you want to make sure that the location and design both really appeal to you. But there are some other things you should be thinking about as well… Three of these are easily discovered before you even go to see the property and two of them are easily observed when you’re there. Spoiler alert, the final two things to consider are the most important of all, and sometimes the hardest to find out! Curious? Read on!
Ask your Realtor® to investigate these 3 before you even go see the property:
- Reasonable condo fees.
What’s “reasonable” will depend on what’s included in the fees. For instance, condo fees are frequently higher in apartment-style condos as heat and water are often included. Your Realtor® can give you an idea of what’s typical for the type of property you’re looking at.
- Good sales history.
One thing that’s great about shopping for a condo is it’s easier to compare value than it is for single family homes. Frequently you can find a similar unit to the one you’re looking at that has sold recently. If there are no sales in the complex it may be because it’s too new to have had any resales, or it could indicate a problem. Ask your Realtor® to check for sales and expired listing for the complex you’re looking at. If there were a lot of units listed and none have sold that may indicate there are issues you’ll want to know about.
- Convenient location.
Consider your location carefully. While you might think you’ll be living in your condo for 10 years or more, life has a way of changing and you might find yourself wanting or needing to sell in a few years. Most people buying a condo are looking for a convenient lifestyle, including easy access to public transit, shopping, coffee shops, restaurants etc. It’s wise to always have an eye on resale whenever you’re buying real estate!
When you’re at the property, look for:
- Well maintained common areas.
Common areas are spaces of shared ownership, such as hallways, social rooms, and parking areas. As a co-owner of the entire complex, part of your monthly condo fee goes towards maintenance of these areas. Don’t ignore run-down hallways, thinking that it’s only the interior of your unit that matters. In a townhome style condo, look at the shingles. Are they in need of replacement? Poor maintenance can be a sign of poor finances, so pay attention to these things. It could also be that these items are scheduled to be completed soon. Ask your Realtor® to find out if there’s a plan to improve these areas soon.
- Visitor parking!
It’s great that you’ve found a place you want to call home… but you want to make sure that your friends and family will be happy to visit you there as well! Make sure to look for visitor parking signs. Many apartment style condos have visitor parking at the rear of the building, while townhome style parking lots frequently set aside a number of stalls for guests. Beware… some complexes have NO visitor parking. This can be a real challenge, especially in the winter! Asking guests to park a block away on the street might put a damper on your social life!
If you’re still interested, ask your Realtor® to see if you can look into these two most important items even before you write an offer!
- Complete and current board meeting minutes.
Board meeting minutes form part of the information package that should be provided to you as a purchaser after you’ve made an offer. Most offers will include a condition that you review these documents to your satisfaction. I recommend hiring an independent condo review company to do this for you. It may cost a few hundred dollars, but it will be money well spent. Prior to writing an offer, ask your Realtor® to request copies of the last 12 months’ board meeting minutes. These documents will give you the most current information about what’s going on at the condo complex. For instance, are there issues with residents using guest parking? Are there discussions about upcoming projects? While it may not be available until an offer is written, is invaluable information to have before you write an offer if you can get it.
- Healthy reserve fund.
Think of the reserve fund as the “savings fund” for the condo complex. A well managed condo corporation plans for future replacement of things like shingles and paving and saves for them. Part of your monthly condo fee goes towards this fund. Every 5 years a reserve fund study should be completed by an engineering firm to determine if the current savings rate will be enough to meet future demands. In other words, when it’s time to replace the roof, will there be enough money in the account? If not, then condo fees may have to go up, or a special assessment (a one-time cash call from every owner) may have to be levied. It’s common for the listing agent to have the amount of the reserve fund available, but that alone isn’t enough information. The reserve fund might look low, but that could be because several major projects were just completed. On the other hand, the reserve fund might look high, which could indicate that the owners are not in agreement about investing in the maintenance and improvement of the property.
That’s a lot to think about and it can seem overwhelming, but that’s where your Realtor® comes in. We deal with condo sales every day and we can guide you to get the information you need. Looking for someone to help you with your condo purchase? Reach out to us anytime at info@WeSellEdmonton.com. We’re happy to help!!!