Buying a property is one of the most important investments people make throughout their lives. The reason why many decide to buy a condominium is that they’re a great choice for anyone who wants to enjoy city life without the hassle that comes with purchasing a house.
They’re also great for those that don’t have time or the ability to do upkeep as condos provide a low-maintenance environment.
The main difference between an apartment and a condo is that condos are owned instead of rented. This makes it an ideal investment property and is a great choice for young professionals. Prices are often cheaper than a stand-alone house, and many of them come with luxury amenities for the owners.
However, there are a few important things you need to consider before you purchase a condo.
When you purchase a condo, you’re taking ownership of a unit within a larger building and you’ll be responsible for its internal repairs and maintenance. But the building itself and any surrounding land is a shared space with other people.
Before you start thinking about anything else, you must decide on a location, which is often based on your lifestyle. So, if you don’t want someone living above or under your home then buying a condo is not the right option for you.
Condos are a great option for those who are comfortable with living in an apartment, except for maintenance that is built-in. Whether you’re buying your condo with the intention of living in it or as an investment, location is an important consideration.
They’re often located in major metro areas, which means being close to schools, transportation, restaurants, and grocery stores.
For instance, the Greater Toronto Area is an attractive place to buy a new home and start a new life. That’s why buying a condo in Toronto is a great opportunity as you’ll be able to live in an exciting urban area filled with shops, restaurants, easier access to public transportation, and other amenities.
Find A Realtor
Once you decided on a location, it’s time to search for a real estate agent or a realtor who will advise you and help you find the best condo according to your needs and preferences.
Make sure you find someone who knows the condo landscape and can point out any concerns you might have. The agent should also be familiar with any new condo developments in the area.
Some things that may alter your living situation in a condo include infrastructure problems in the building, rules you can’t follow, or community finance issues.
An experienced agent will be able to tell you which developments have succeeded in resale values and if there’s been acrimony over community issues. So, hiring an expert will make the whole process of purchasing a condo much easier and more enjoyable.
Securing a mortgage for a condo might be a bit challenging. Lenders look closely at condos to ensure they comply with special requirements, and unfortunately, some condos don’t. However, don’t let this challenge scare you off because if you have a good real estate agent they’ll be able to help you with this, too.
Getting pre-approved for a mortgage is an important step when purchasing any type of property. The lender will have to first verify that you qualify for a mortgage loan based on the documentation provided such as proof of assets and income, identification, and information about any financial obligations and debts.
Note that mortgage pre-approvals specify a principal amount which is important as it helps homebuyers better understand their budgets. When you submit a formal mortgage application, the finalized amount will depend on many factors including the required down payment and the purchase price of the condo.
If you’ve gathered all the important documents, you’ll be able to get pre-approved relatively quickly. Note that having a pre-approved mortgage will also make you a more attractive buyer.
Consider Additional Fees
Additional costs such as condo association fees are also important aspects you need to consider when purchasing a property. Apart from the mortgage, you will also need to pay fees for the condo maintenance and amenities. Make sure you review the condo association fees to figure out what’s included and what’s not.
Don’t forget to ask how much as well as how often they increase every year, to have a clear vision of how much it might continue to grow once you start living there. In addition, ask about the rules of the community and how the board handles complaints or issues.
Also, consider additional costs such as condo maintenance fees, property taxes, home insurance, legal fees, moving costs, and sales tax.
Schedule Showings And Make An Offer
Once you’ve found a realtor, got pre-approved, and settled on a budget, it’s time to think about visiting condos. Your agent will likely send you listings and schedule showings for the condos you’re interested in. You can also research open houses and visit them, but make sure you stick to your list of things you must consider to help you make a better decision.
When you find the perfect condo to buy it’s time to move forward and make an appealing offer. However, make sure you consider the additional costs before you proceed with this step. Consult with an attorney and your agent on how to price your home correctly.
Although getting a home inspection is not a mandatory step in the process, it is still recommended. A home inspection is carried out by an impartial inspector, making an official assessment of the physical structure of the property.
The home inspector usually checks out features such as wiring, plumbing, and the structure of the unit. Later, they give a report that sums up the condition of the condo and will let you know whether it needs any repairs.
Once you have the report you can negotiate with the seller if the repairs and replacements are included in the final cost of the condo. If there are issues with the place, consider asking for some cash-back credit to help pay for any repairs.
Also, think about whether it needs some serious structural renovation because in that case, you might want to think again about settling for that specific condo.
Close The Sale
Once you’ve done everything else and your loan has been finalized, it’s time to meet with your realtor or lawyer and sign the papers that say you’re the new owner of a condo.
In addition, you’ll need to put together all the necessary documents for the final signing. The closing date will be the official date when the ownership of the condo will get passed over from the seller to you.
Note that it usually takes a few weeks after the offer is accepted and you should expect a certified check or wire transfer for the down payment to be transferred from the buyer to the seller.
Also, you’ll need to submit your condo insurance to your lender and review and sign your loan documents. Lastly, you’ll need to sign a closing disclosure that will detail your closing costs including title insurance, escrow fees, condo association fees, filing fees, and more.
Advantages And Disadvantages Of Buying A Condo
Potential Lower Price
A condo can be a much less expensive option when purchasing a home, depending on the market. This makes it an ideal opportunity for those who buy a home for the first time or those with limited savings.
Reduced Maintenance Costs
A condo association often handles exterior maintenance. This includes roofs, exterior siding, driveways, walkways, and lawn care. They’re more compact than stand-alone homes and require less attention. Also, property taxes are lower.
You might have access to excellent amenities such as a pool, dog park, grilling area, clubhouse, covered parking, and much more. However, this depends on the community. The best part is that all residents share the cost In addition, you have a great opportunity to socialize with your neighbors and share doggy playdates, barbecues, pool parties, and more.
Owning a condo means owning a common property together with your neighbors. This means that if one or more of your fellow condo owners fail to pay their dues, then the entire community could suffer financially.
Condo Association Rules And Fees
Condo association rules can be limiting. They can regulate everything from how many pets you can own to trash pickup and whether you can rent your place. This is often one of the biggest complaints about living in a condo community because if you break the rules you’ll have to pay a fine. Also, these fees tend to increase over a period of time.
Since condos share common areas such as hallways, the lobby, and amenities, it might not be an ideal option for those that value their privacy.
Noise can be a serious problem as well since you’ll be sharing ceilings and walls with adjoining owners. Also, if it is allowed to rent a unit, there might be many renters who are moving in and out which might disrupt your peace.
Storage And Parking Problems
A lot of condos don’t have a designated parking spot, so you might be forced to park somewhere further than your building. In addition, storage is usually limited and outdoor storage space may not be included at all.
Purchasing a property is not easy but with the right tactics and a competent real estate agent you’ll be able to tackle any issues with ease. Consider reviewing the pros and cons of purchasing a condo before you start planning one of your most expensive investments.
However, keep in mind that home prices continue to increase and no matter what you expect when purchasing a property, it will probably cost a bit more in the upcoming years.