Condos are quite different from the single-family dwellings you may be used to. They often look just like apartment buildings.
Unlike apartments, however, you own your private condo unit. Condos tend to be especially popular in spots with high property values, like big cities or popular vacation destinations. Purchasing a condo is like joining a business arrangement with all the other people who own condos in the building. Because of this, condos have their own homeowners associations. This body puts rules in place to maintain the upkeep of both the building and neighbor relationships.
Each condo complex will have their own rules and restrictions. If an association refuses to share their budget with you, consider that a major red flag.
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The association will also have a reserve fund to cover expenses that crop up like major repairs. When looking at a condo complex, you may want to ask about upcoming projects and how they plan to fund them.
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The condo association will have a master insurance policy in place, but these will differ from building to building. You or your home inspector should review the policy thoroughly.
Neighbors are closer, and with access to the same building features, you can easily make friends. Condos tend to appreciate at a slower rate. Before starting the process of buying a condo, write a detailed budget. This will help you determine the following:.
For the municipal and school taxes, each city has a different tax rate. Here are quick links for the major condo markets:.
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Vancouver — Toronto — Montreal. Ottawa — Calgary — Edmonton — Halifax. Just multiply the rate you find on those pages with the property value of the condo you plan to buy. Because once the developer hands over the property to the owners, condo fees usually go up. For those thinking of buying a resale condo, you can look at the listings on Realtor. Each listing shows how much the condo fees are.
To give yourself more financial leeway, expect the following when you budget for condo fees:. Buying a condo involves many moving parts and processes. Feel free to contact us if you need more condo advice! Fred Davidson. However in some specific areas or depending on your credit history, lenders may require more. This depends on the builder and depends how far the construction has progressed. Original right? Municipal levies. Lawyer or notary fees. Condo home inspections. Prepaid condo fees to cover balance of first month. Bank or lender appraisal fee when buying resale. Moving expenses.
First maintenance on heating and cooling systems. Tip 3: Get Your Paperwork Organized Most lenders will need to validate your information before letting you sign a mortgage. Official letter of employment with your title, employment status and gross income. But what is it and why does it matter? Have or work towards long term and established income.
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Tip 5: Check and Improve Your Credit Score Your credit score is like a first impression when interacting with banks and lenders. Debt ratios are unbalanced: lenders like to see your income to debt ratio as small as possible. Check your credit score and profile. Tip 6: Use a Mortgage Broker to Get a Better Rate The first person to contact when buying a condo, regardless of resale or pre-construction, is a mortgage broker.
That extra expense is well worth it though. Get better upgrades for the same cost.
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Negotiate parking or storage units. Review the contract and negotiate better terms. Bonus Tip: Write a Detailed Budget Before starting the process of buying a condo, write a detailed budget. This will help you determine the following: Can you actually afford a condo?
If you can, how much can you afford? Is there a lifestyle compromise if any you should expect? If only it was that easy. Condo Fees. Municipal and School Taxes. Here are quick links for the major condo markets: Vancouver — Toronto — Montreal Ottawa — Calgary — Edmonton — Halifax Just multiply the rate you find on those pages with the property value of the condo you plan to buy.
How to Estimate Condo Fees This can get a bit tricky since condo fee rates vary by: The condo development: more amenities means higher condo fees.
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