F.A.Q.'s
Over the years it’s been my privilege to compile this list of Questions and Concerns many of my customers have had when purchasing a condo. I have discovered that many condo purchasers shop on their own, perhaps responding to advertisements in Newspapers/Condo Magazines, Calgary Real Estate News, Radio Announcements, Signs etc.
The purchasers phone the listing associate to obtain information or to view the condo. After viewing you either like the condo or you may not but you continue to respond to ads and view more condos hoping to find the right one for you!
In some cases the purchasers get lucky and find a great condo, write an offer with the listing associate, make a deal, move in and live there happily ever after.
However, this isn’t the case for most purchasers. The new owner/purchaser will move in and find that they are suddenly exposed to situations and problems that they were not informed about because the right questions were not addressed at the time of the purchase or some pertinent information was either deliberately or unintentionally withheld form the purchaser to hasty put a deal together in favor of the vendor.
Don’t forget, the listing associate has a fiduciary relationship with the vendor and is working on the vendor’s behalf. You the customer are to be treated fairly and honestly. However, if you meet a different associate every time you view a condo, chances are perhaps you may be vulnerable and will not be totally informed of the whole picture.
Below I have listed some common concerns that have arisen over the years for purchasers who are 'going it alone' and need to ask if they choose not to use a reputable Realtor®.
- 1) What's included in the 'Asking Price'?
Several suggestions could be, appliances, central or window air-con (ask about the window air conditioner as the vendor may remove it if it is not included in the offer to purchase), window coverings, garborator, mirrors, shelves, workbenches, central vacuum systems and attachments etc. Do not take for granted that the items you see will remain in the property once it is sold.
- 2) Is the condo complex you wish to purchase in CMHC (Canada Mortgage & Housing Corporation) approved?
This means that it could affect you when you want to re-sell your condo. You maybe purchasing your unit with a substantial down payment and may not require a high ratio mortgage, however, if the unit is CMHC approved it would qualify to future purchasers who have only 5% for the down payment. This greatly increases the unit’s future marketing potential as more purchasers could qualify.
- 3) Do you understand the 48 hour clause?
A purchaser by law has 48 hours to review the condominium documents after the offer to purchase has been accepted by the vendor. The purchaser may cancel the contract if the information in these documents is not satisfactory with the purchaser’s expectations. Many purchasers don’t fully understand condo documents and the 48 hours also allows the time to ask a lawyer or an experienced source to study them and inform you of their content or hidden stipulations.
- 4) Will your condo fees increase?
Be aware of new condo conversions. Initially the monthly contingency fee is usually very attractive and low. There usually is also a very low reserve fund as maintenance and upgrading expenses have not yet surfaced. In time the condo committee membership will probably find a need to build up the reserve fund and may vote to increase the monthly fee to fulfill this need. Ask questions, be informed. Allow for possible future increases in your budget.
- 5) What are contingency/reserve funds for?
Every condominium project has a special fund which is set aside to meet operating costs. Each unit owns a portion e.g. 1.74% or 2.33% shared interest. When purchasing the condo you must buy the unit portion. The vendor may wish you to pay for the unit share, however, in many cases the vendor’s portion can be negotiated to be included in the offer to purchase and forms part of the purchase price. Make sure this concern is dealt with at the time the offer is written.
- 6) Will you have Parking?
Where parking is available, there may be as many parking stalls as there are units. Sometimes there are less parking stalls than there are units. So if parking is a concern make sure you include the allocated stall in your offer to purchase.
- 7) How about extra parking?
If an additional parking stall is important to you, make sure that you inquire with management what the stall would cost. If there is one available to you but it’s not presently available, find out approximately how long it would take to obtain one. If indoor parking is important to you don’t assume that your stall will be indoor as sometimes there are fewer indoor parking stalls than there are units.
- 8) Is there an area set aside for visitor parking?
If so find the location, ask what the visitor parking hours are and inquire if overnight parking is permitted with or without a permit from the manager.
- 9) Has the condo you are interested in retained its value?
Are the selling prices increasing or decreasing? Ask your associate to study today's market trend for you. If prices are declining you may be saving money at the time of your purchase. Make sure this will not affect you in the event you have to re-sell your unit. An experienced associate will compare the asking price of your unit to similar units, which have recently sold.
- 10) How many units are rented?
If this topic is important to you then make sure to inquire the percentage of units that are owner occupied and how many units are tenancies. Owner occupied units are usually more favorable neighbors.
- 11) What if you are buying this property as an investment?
Will you be using your condo as a primary residence or perhaps if your personal changes would you consider leasing out the property? If you are thinking of renting out your unit make sure you that the complex in fact, allows tenants.
- 12) What about property Taxes?
Aside from the monthly condo fee you must also pay property taxes, so check out what you have to pay. If you plan to rent out your condo its possible that your taxes will increase and in some cases the increase is quite dramatic. Check with the city to learn the difference before you rent it out.
- 13) Are you allowed pets?
Make sure you inquire if you are allowed pets, what kind of pets are allowed, how many pets, is there a dog run on or near the premises. Or you may not like to live near or amongst pets. Ask if there are many pets on the premises.
- 14) Does your unit restrict age occupancy e.g. +55years?
If you are over 55 years of age or older as a purchaser, it will not present a problem. In the event you wish to sell, the same marketing restrictions will apply.
- 15) Who manages your condo?
Find out the name of the agency, which manages the property. Ask questions about their performance. Are they doing a good job? Is their reputation good? Are the other condo owners pleased?
- 16) What condition is the building in?
Walk around. Is it nicely painted? Does it appear to be tended properly? Does the roof or do the shingles appear to be in good condition? Are the fences in good shape? Check for other visible appearances good condition as well as neglect.
- 17) What about the structure?
Find out all about recent repairs and improvements. How have they affected the reserve fund?
- 18) Are there any major costly projects planned in the near future?
Inquire if these improvements affect the reserve fund or if the fund able to cushion the costs of repair. Obtain a copy of the minutes of the last meeting. Ask the questions.
- 19) What about financial statements?
Obtain a copy of the latest financial statement when you receive the condo documents. Observe it carefully. Become aware if it’s content.
- 20) Is the foundation secure?
Ask if there has been a recent structural engineers report. If so try to obtain a copy. Check the basement carefully for any cracks and water seepage. Make sure you become aware of who fixes what if a future problem should arise.
- 21) Does snow removal include your front steps, porch, sidewalk and your parking stall?
Ask! Check your Condo Doc's.
- 22) What about lawn care and landscaping?
Find out what you will be responsible for…does this include your front/rear area? Does management tend shrubs and trees?
- 23) Does the condo have amenities, e.g. exercise room, swimming pool, tennis courts, etc available for your use?
Is so are they to be used freely or is there a user charge. Can guests also use the facilities?
- 24) What kind of heating system does the condo have?
Is there central heating or is it local? Is there air conditioning? Is the cost of heat included or do you pay your own?
- 25) Water
Is water included or do you have a separate water meter?
- 26) Insurance
Make sure you become aware of exactly what the condo insurance will cover. You will need to have your insurance for your unit and your personal contents.
- 27) More Listings
Are you also aware of additional listings in the complex. In many cases the condo complexes do not allow real estate signs. Make sure you work with an associate who would take the time to advise you of all the units available in the complex, so that you can shop for the best unit that will suit your needs.
As you can see there are many questions and concerns that will pop up over the course of condo hunting that’s were I come in to help you as an experienced Realtor® with any concerns that you may have and which I will research on your behalf.
I hope & trust the information I have provided for you here will be of use to you and your decision making process.
I suggest that you form a working relationship with a good reputable real estate associate you can trust, someone who will place your needs as a condo purchaser ahead of their own, and someone who will help you buy, addressing the concerns you many have.
If you have further questions please don’t hesitate to ask.
