What to Look at When Purchasing a Condominium?

There is so much to look at when purchasing a condominium and if you have not lived in one before then this can be an overwhelming decision and some of the details can be confusing.
First and foremost, it’s important that the agent who represents your interests has a strong understanding of the condo market, especially the condo building that you as a Buyer are interested in looking at.
One concern and area that every Buyer should be looking at is the Condo Corporation’s Board of Directors. Like in any corporation, the board is there to make major decisions for the corporation on behalf of the owners.
We have of late run into condos where board decisions have deeply affected the financial health of several condominiums in the Ottawa area and as a result the resale value of the condominiums in the corporation. As an owner you have very little control over the decisions but can exercise your voice by attending board meetings and participating in the process.
What are some of the things you would like to know prior to your purchase? If you are a “value investor” in the stock market, you will have no challenge in this area and understand this. It is important to have an appreciation of the overall health of the building and the financial health of the corporation. A good question is “does the corporation have the financial resources in their reserve fund to manage and care for any of the projected repairs and costs associated with the maintenance of the building(s)?” This will be apparent when looking at The Reserve Fund Study, The Engineering Report and the Budget.
Looking at these numbers will reveal the overall financial health of the corporation and let you know as an investor whether you will be called upon to invest more money into your building.
The age of the building is good information to have as well. Most new buildings may not have issues at the outset but as a building matures so does the life expectancy of the mechanic of the building. For example the age of the building is important when looking at items such as elevators and mechanical systems such as furnaces and air conditioners. As a building matures, items such as parking garages, windows, balconies, brick work or stucco may all arise as potential need of repair or replacement. Recreation facilities can be an asset or a burden.
Knowledge of all of these pieces when considering a purchase is wise.
If you have paid a premium for your unit, you are most likely not going to be interested in becoming involved with a corporation that cannot manage their costs without incurring a “special assessment” on the owners. These special levies are attached to each owner and must be paid over and above the condominium fees. Each Condo Corporation manages these levies in different ways. Sometimes they are broken down and attached to monthly condo fees over a period of time, on other occasions they are a special payment semi annually over a period of time, or even annually over a period of time or in one lump sum. It is a decision that all of the owners should participate in determining.
If you like the development enough and find the merits of the location and the unit itself worthy and you still have a desire to reside in the complex, then you are ready to make an “informed” decision. This may come with an offer with a seriously adjusted purchase price and in some instances 10% of the list price.
It’s what a motivated Seller and a qualified Buyer are prepared at the end of the day to negotiate.
If you or anyone you know are interested in buying or selling real estate please feel free to give me a call. I would be delighted to give you some help.