The Condo Purchase Checklist: What You Need To Know When Buying a Condo
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by Richard Morrison
- January 20, 2020
- Buying
- 0
Purchasing a condo can be an exciting yet challenging endeavor. As both an investment and a home, condos require careful consideration to ensure you make the right choice. This comprehensive condo purchase checklist covers everything you need to know before signing on the dotted line.
Key Takeaway
Follow this complete condo buyer’s checklist to avoid surprises and fully understand the unique intricacies of condo ownership. Research the property, building, neighborhood, and condo corporation thoroughly. Getting pre-approved for a mortgage, reviewing condo docs, inspecting the unit, and asking the right questions will lead to condo buying confidence.
As an experienced realtor who has helped dozens of clients navigate the condo buying process, I always recommend tackling the following steps:
- The condo itself: Thoroughly view the unit at different times of day. Determine what’s included (appliances, furniture, parking, storage, etc.). Review any renovation restrictions.
- The building: Assess the overall condition, security, amenities, tenant mix, and reputation. Consider noise levels, future repairs, and warranty coverage.
- The neighborhood: Research transport links, safety, upcoming developments, and local amenities like shops and parks.
- The condo corporation: Obtain and review financial docs, meeting minutes, bylaws, and status certificates. Understand the fees, reserves, assessments, and management.
Getting pre-approved for financing, conducting inspections, reviewing condo docs in detail, asking neighbors, the property manager, and the condo board questions, and taking the time to experience the property and area at different times of the day will pay dividends in avoiding surprises down the road. Now let’s explore these steps in more detail.
Get Pre-Approved for a Buyer Mortgage
Before viewing units, get pre-approved for a mortgage. This enables you to know your price range and shows sellers you’re a serious buyer. Be prepared to put down 20% or more for new builds. Factor in monthly fees and property taxes too.
Review the Condo Documents Thoroughly
Request and carefully review the condo corporation documents including:
- Bylaws: Rules and restrictions for owners/renters. May include pet policies, age and rental limitations, noise restrictions, allowable renovations, etc.
- Meeting minutes: Record of condo board meetings for the past 3-5 years. Reveals complaint history, repairs, assessments, fee increases, and management responsiveness.
- Financial docs: Includes budget, balance sheet, reserve fund study, depreciation report, end of year financial statements. Provides insight into the financial health and fees outlook.
- Status certificate: Summarizes key legal and financial details like fees, litigation, insurance, pending projects, and new buyer responsibilities.
Inspect the Unit and Building
Schedule a professional home inspection of the unit to identify any issues needing repair. Additionally:
- Tour the building and common areas to view the amenities, condition, security, and parking.
- Request a building envelope assessment to check for potential water ingress issues.
- For buildings constructed before 1999, ensure it has been fully rain screened.
- Verify warranty coverage. Remaining 2-5-10 warranty coverage offers protection on labour (2 years), the building envelope (5 years), and structural components (10 years). Appliances may also still be under manufacturer warranty.
Vet the Neighborhood An Check Out Where Condos Are Located
Research the surrounding area to determine if it suits your lifestyle needs:
- Commute: Convenience and proximity to public transit for work or school.
- Safety: Crime rates, street lighting, neighborhood watch.
- Amenities: Shops, parks, libraries, community centers, places of worship, healthcare.
- Developments: Pending construction that may affect quality of life or property value.
- Reputation: Search online forums and neighborhoods apps for area reviews.
Interview Neighbors, the Property Manager, and the Condo Board
Tap into insider knowledge by asking around about:
- Noise levels, nuisance neighbors, security issues, pest problems, previous damage/incidents.
- Responsiveness and transparency of property management and the condo board.
- Planned projects, repairs, fee increases, special assessments, bylaw changes.
- Rental restrictions and owner-occupancy ratio.
Crunch the Numbers
Get a complete financial picture by researching and calculating:
- Monthly fees – Get 3+ years of past statements. Watch for steady increases.
- Special assessments – One-time fees for major repairs. Check reserve fund is adequately funded.
- Parking – Monthly cost if not included in condo fees.
- Utilities – If not included, estimate hydro, water, heating bills.
- Mortgage + property taxes + condo fees + utilities = Total monthly housing costs
Ask About Assignability
If buying pre-construction, confirm the developer’s assignment policy for reselling before closing. Assignment fees usually apply.
Find Out What Do The Monthly Condo Fees Cover
When buying a resale condo, it is important to find out what the monthly condo fees cover. These fees typically include information about the condo, such as its register and new home warranty. They also cover the maintenance and upkeep of the building as a whole, including any repairs or renovations that may be needed.
Additionally, the fees often cover various services and amenities for the residents, such as garbage removal or access to a fitness center. If you are considering buying a new unit in a single-family home, you should likewise inquire about the monthly condo fees. It is important to note that condo fees can have an impact on the market value of the property. In some cases, a condo with higher fees may have a lower market value, making it a cheaper option in the near future.
Be Realistic With Timelines
New builds often face construction delays. Assume the earliest occupancy date is unrealistic. Phantom rent may apply between move-in and closing.
Unfortunately, condo construction delays are very common. Don’t bank on an initial occupancy date 12+ months from purchase. Build at least a 6 month buffer into your plans for potential delays. Phantom rent also adds additional move-in costs if occupancy happens before legal closing.
Do a Pre-Occupancy Walkthrough
For new builds, thoroughly inspect your unit before moving in. Document any deficiencies for the developer to address.
Conduct an in-depth pre-occupancy walkthrough of your new condo, create a checklist, take photos, and don’t be shy about noting every minor flaw. Documenting cosmetic damage like drywall cracks, appliance scratches, flooring gaps, blemished cabinets, and paint splatters ensures the developer addresses issues under the initial warranty period that you shouldn’t be responsible for fixing as the buyer.
Listen to Your Gut
If something feels off about the unit, building, or neighborhood, trust your instincts. You’ll be living with your choice for years to come.
FAQs:
Q: What should I check to see when buying a pre-construction condo?
A: When buying a pre-construction condo you should check to see the status of the building permit in BC, the completion date for construction, any outstanding levies or fees from the developer, and whether or not you are entitled to any upgrades. Additionally you may want to find out about common property maintenance and any occupancy fees.
Q: How do I find out whether a pre-sale condo has been built yet?
A: You can contact your real estate agent or the developer for information about the pre-sale condo’s progress. They should be able to tell you if it has been built yet and when it is expected to be completed.
Q: What kind of deposit do I need when buying a new condo?
A: The amount of deposit required when buying a new condo depends on whether it is pre-construction or resale. Generally speaking it will range from 10% – 20%, but may be higher or lower depending on the particular situation.
Q: Do I need enough money for upgrades if I am thinking of buying a new condo?
A: Yes, if you are thinking of buying a new condo then it is important that you have enough money saved up for any upgrades that you may want to make. This could include anything from alteration and decorations through to environmentally friendly appliances.
Q: What kind of insurance do I need when purchasing a condominium?
A: When purchasing a condominium it is important that you obtain sufficient insurance coverage for both your personal belongings as well as the unit itself. Your realtor will be able to advise what type of coverage is necessary in your jurisdiction.
Q: Can I occupy my new condominium before closing?
A: Generally speaking no, you cannot occupy your new condominium before closing on it. However this will depend on local laws and regulations so it is important that you check with your realtor beforehand if this applies in your area.
Conclusion
Buying a condo is a big decision. Follow this condo buyer’s checklist to fully understand what you’re getting into. Research thoroughly, crunch the numbers, read the fine print, and ask the hard questions.
As a realtor, I’ve learned to never skip the due diligence process when helping clients buy condos. Taking the time to inspect, investigate, and interrogate may seem tedious but is the only way to make an informed decision and find a condo you’ll be happy with long-term. Don’t hesitate to lean on professionals like inspectors, lawyers, and experienced realtors during the buying process. We want you to find the perfect condo too!
Ready to turn your real estate dreams into reality? Contact Richard Morrison, Vancouver’s top realtor with 20+ years of experience. As a Medallion Club member and RE/MAX Hall of Fame award winning agent, he’s the expert you need on your side. Whether buying, selling, or investing, Richard’s personalized approach and deep market insights ensure a successful transaction. Reach out to Richard today at (778) 900-2235 and make your real estate journey seamless and rewarding.
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