When buying a condo as a resale unit, the perils to steer clear of are a little different when you compare the process of purchasing a unit brand new and directly from a developer, as is the case in pre-construction.
In fact, when you buy a resale condo, you are really buying into a business — a corporation!
On that note, here are ten pipin’ hot, insider resale condo buying tips (which we’ll follow up next time around with an accompanying checklist). Here we go…
1) Figure out where exactly your unit’s boundaries lie and whether or not your unit factor (used to define the portion of ownership in a condominium building or complex) is reasonable.
2) Avail yourself of the services of a home inspector, who is able to not only evaluate the condition of the individual unit you prospectively intend to purchase, but the building as a whole.
3) Condos have reserve fund studies and technical audits — known as status certificates, in industry speak. Consult these to ascertain the condition of both the building and common property so you can know what you’re getting into.
4) Be aware of the financial documents the condominium corporation itself is obliged to keep. These can include — but are not limited to — end-of-year financial statements, the estoppel or status certificate or the annual operating budget.
5) Clarify what is included in the purchase price and what is not, so you can ultimately compare the overall costs between other condominiums. As an example, ask yourself: are there amenities (pools, parking, etc.)? If so, how are they paid for? Are utilities (gas, electricity, water charges, etc.) covered in the monthly condominium fees? Are there additional charges over and above the purchase price you need to be aware of?
6) Ask experts to verify if there is enough money in the condo’s reserve fund to foot the bill for any major repairs and renewal projects.
7) Inquire and receive a hard answer about whether the condo anticipates any special assessments. For example, does an underground parking garage need renovation? Could the building need to be retrofitted for wheelchair access?
8) Get to the bottom of the likelihood of potential ‘hidden’ costs passed along to owners by developers. For example, some developers take out long-term leases on building fixtures to save on capital costs. Guess who inevitably winds up paying those?
9) Confirm which municipal services the condominium receives, be it garbage pickup or snow removal. Yes; although you pay for these services through property taxes, the condo may have to assign this work to contractors, which can end up meaning that you might pay for them twice!
10) Confirm what — if any — new home warranty coverage remains on the unit you intend to buy.
One more thing! Definitely make sure to confirm there are no current or ongoing legal actions against the condominium corporation. To do this, consult with your lawyer before signing any documents!