Condo Concept

When you purchase a condominium, you purchase and have title to your individual unit in a multi-unit property, and share in the ownership of the land and other common property with all the other unit owners.  The type of common property varies depending on the type of condominium - high rise or townhouse for example - and would include hallways, elevators, heating system, parking structures, landscaped areas, recreation areas etc.

A condominium is a specific form of ownership and does not describe a type of building.
One of the great advantages to owning a condominium is that in most cases, it is owner-occupied and owner run.  Owners ensure their investment is maintained and regard improvements as an investment which increases the value of their individual unit.

 
Advantages and Disadvantages of Condo Ownership

If a winter holiday is part of your lifestyle, you can leave with your mind at ease, without the worry of a driveway to clear. In the summer the grass will be cut, you won't have any exterior painting projects or fence repairs to look after.
Condo projects are now part of most communities which means being able to stay in the same location where you were a homeowner.  Some condo projects are more successful than others in terms of capital appreciation and length of time to sell. Here are some of the advantages and disadvantages of condo ownership:

 

Advantages

·    protection from rent increases
·    monthly cost of owning is often less than renting
·    easy financing
·    wide range of property types, prices, locations, sizes and amenities available
·    availability of amenities such as swimming pool, tennis courts, hot tubs, saunas, whirlpools, exercise facilities, health spas, sun decks, community rooms (the cost of which may otherwise not be affordable)
·    you are investing in your own home and build equity
·    appreciation of capital value
·    pride of ownership
·    freedom to make interior changes and enhancements to your unit
·    enhanced security availability and peace of mind when leaving unit unattended
·    maintenance and upkeep is kept down or eliminated
·    security of tenure and permanent occupancy
·    cost is often less than single family home due to efficient use of land and economies of scale
·    very marketable
·    wide range of prices depending on features, luxury and location
·    sense of community due to permanence of residents and resulting social activity
·    developments available geared to a specific lifestyle (restrictions on age, pets, children etc.)
·    participation of owners in operation of development including budgeting, decision making, determination of rules and by-laws.

Disadvantages

·    some loss of freedom may be experienced due to rules and by-laws e.g. type of pets allowed, right to rent unit etc.
·    due to a larger concentration of people you may experience problems with the "5  p's”, pets, parties, parking, personality and people.
·    money is tied up in equity
·    you may be paying for some amenities you never use
·    boards of directors vary in terms of skill and effectiveness

What You Need To Know

Strata Fees

As a unit owner you will be responsible for your share of expenses known as Strata fees or common expenses. These are set out in the condo declaration. It describes what expenses are to be shared and in what proportion. This can be equal or unequal in cases where they are based on the comparative size of the units.
The exterior and common area maintenance of your condo is covered by your common element fee. The fees are usually paid monthly in accordance with the budgeted expenses. Of course if your condo has more amenities such as a swimming pool, on-site security personnel etc. your fees will reflect the extra services.

 
Reserve Fund

Reserve or contingency funds are set up by the condominium corporation to cover major or unexpected expenses. The developer of a new condominium usually sets up a fund which is then turned over to the condo corp. The fund becomes an asset of the corporation and each year the unit owners decide on what the level should be. The individual owner does not have any rights to the Reserve Fund.

Questions You Should Ask When Buying A Condo

Pricing

Is the unit competitively priced with others currently on the market?
Have you taken into account the amenities offered?
What is the resale potential?
Have the units appreciated?


Are other unit owners in your financial bracket? If higher they may vote for services you can not afford, if lower they may vote down changes you would like to see.

Condo Security

Security is a key factor in choosing a condominium. The type of security will vary depending on the type of condo you choose and special care must be taken to ensure it meets your lifestyle requirements. What security features exist or are planned - suite alarms, TV surveillance, controlled access? Here are the factors you should consider or the questions you should get answers to.
Doors - Are they solid wood or metal and equipped with dead-bolts and peepholes? Do patio doors have effective locks?
Parking - how is access controlled? Electronically?
Intercom - is there a good working system?
Lighting - is property well lit in all areas - hallways, parking, fire escapes entrances and exits?

 
Balconies - are they accessible from the ground or adjacent units?
Mailbox - are numbers different from apartment and parking spaces?
Alarms - is there wiring for home security alarms in every unit or suite?
If possible check on the condo’s record for break-ins and vandalism by asking local authorities or current residents.
 

Common Elements and Facilities

What amenities are offered, what are the hours of use, is there a separate cost?
What is common element fee and what is included? History of increases?
Are there any exclusive use common elements (reserved for one or more unit holders)?

Parking and Storage Facilities

What is included in the purchase? Some parking and storage may be separate and legally defined units you own, others are common property allocated to the owner and subject to reallocation by the Board, others are exclusive use elements designated for the use of a unit, pursuant to provisions in the Declaration.

What parking/storage is required and can you rent or buy additional spots/space?
Is there visitors parking available?

Quality of Construction

What types of materials were used in construction? Are the facilities in good condition? How old is the building?
Find out if the corporation has done a reserve fund study (estimate of the remaining life of the various components, cost of replacement, and contributions needed to ensure funds are available for anticipated repairs and replacements)
What is the reputation of the developer?

Design and Layout

Size of suite and rooms - adequate for furniture?
What exterior changes can you make?
Can you add solarium to balcony?
Owner Occupied vs. Tenants
How many units are owner occupied vs. tenant occupied? Is there a maximum? Are there rental policies and what are they?
Management/Appearance
Is project managed by a professional company, resident manager or self-managed?
How well has the building been maintained?
Does it fit your personality/lifestyle?

Restrictions

Ask your RE/MAX agent for the complete set of building rules and regulations. Are there any restrictions you require/don't want - pets, children, age, number of people per suite, carrying on business in a suite? Most condos have a long list of association rules and regulations by which you'll have to agree to abide if you purchase in the building. These rules may limit the number, type, and weight of pets; how many visitors you can have at any one time; how often - and for how long - you can rent out your unit (if at all); when and how you can reserve common facilities like the party room; when you can have work done in your unit; and, what day you can move.

Expenses

What will be your monthly operating cost?
Have there been any special assessments in the last two years and are any planned?
Which utilities are common and which are individually metered?
What are the property taxes?
What insurance do you need and what is covered by the corporation?

Ask to see the past two years worth of condo board meeting minutes, as well as the last two years' of budgets and the current year's projected budget. What are the owners concerns?
Are there any large-scale improvement projects planned? How much will they cost and how are they to be funded?
Has there been a review of the reserve fund to ensure it is adequate? Is the building fiscally responsible? Are any fees/owners in arrears?

New Condominiums

Check the reputation of the developer with people living in other projects they have done or project you are looking at.
What is the cost for set up of a reserve fund (one time up front fee)?
What are the landscaping plans?
What warranties are being offered - is the project covered by a New Home Warranty Program? What are the terms of this warranty? Contact the organization offering the warranty and find out exactly what is covered and what restrictions are involved. What specific timelines builders must work to and what dispute resolution services are offered? What clout does the warranty organization have with builders in settling a dispute?
How many elevators are there and how fast are they?
Are units wired for cable TV and telephone at the developers cost?
Does the corporation have a proposed operating budget? - If so, obrain a copy.
   

Offer Process

How to Make an Offer

When you have found a home you are interested in buying, your Vancouver Condominium RE/MAX Sales Associate will walk you through the process of drafting an offer to purchase. Your sales associate will communicate the offer to the seller or the seller's real estate agent for you. Some properties are in demand and you will not be the only interested party making an offer. Your RE/MAX Sales Associate will assist you in generating an offer that is reasonable and protects your interests using specified terms and conditions.
An offer can be drafted with or without conditions; an offer without conditions is known as a firm offer and one with conditions is known as a conditional offer. A conditional offer represents the party with the placement of certain conditions on the purchase. Some of these conditions could be "subject to financing approval", "subject to the strata council allowing pets", "subject to the buyer's house selling", "subject to an approved home inspection", among many others.
The seller may accept your initial offer, reject your offer or present a counter-offer. The counter-offer may differ from your original offer in respect to price, conditions, the closing date or any other items. Offers can be countered back and forth between the parties until one of you accepts or rejects, ending the negotiations.

There are many components of an offer that you should be aware of and understand. Your RE/MAX Sales Associate will answer your questions and explain the entire process to you so that you are comfortable with the steps involved.
Terms

An offer includes certain "terms", which specify the total price offered and how the financing will be arranged, such as if you will arrange your own with a financial institution or mortgage broker or if you wish to take over the seller's mortgage (assumability).

Inclusions and Exclusions

These are specifications within the offer that detail the items to be included or excluded from the purchase of the property. Typical inclusions are appliances, window coverings, fixtures and decorative pieces.

Deposit

A deposit is provided from the buyer to the seller as a token of the buyer's assurance and intention to buy the property involved. The deposit is applied against the purchase price of the home once the sale has closed. Your RE/MAX Sales Associate can assist you in proposing a certain and appropriate amount for the deposit.

Conditions

Items that are usually put in place to protect a party's interests upon selling or buying the property and refer to things that must occur or be in place before the sale closes.

Closing Date

This is usually the date that the legal ownership of the property transfers from the seller to the buyer and, unless otherwise noted, when the funds for the purchase are concluded.

Possession Date

When the buyer takes possession as specified in contract oif purchase sale.

Purchase Price

This is the amount that the buyer is offering to pay for the property. The price is usually dependent on market conditions and may differ from the seller's current asking price.

Legal Needs

Purchasing a home involves a lot of paperwork, most of which are contractual documents that will legally bind you to the numerous terms and conditions. For this reason it is important to have a good lawyer or notary public acting for you. Someone to protect your rights and interests.

Finding a Lawyer/Notary Public

If you don't have a lawyer or notary public, you can look for a referral from friends, family or business acquaintances. Look for someone with real estate experience and discuss their fee scales. Your RE/MAX Sales Associate can help you locate a reliable professional, whom you feel comfortable working with.

Lawyer's/Notary Public's Function

You will need a lawyer or notary public to process your purchase and ensure the terms are met:
1. the correct property is purchased
2. transfered title to your name
3. ensureed title is free and clear of prior owners encumbrances
4. your mortgage is registered properly on title

The legal process varies from province to province within Canada. Specifically, you will need to consult with your chosen legal professional and he/she will explain the process and the steps that need to be completed before you get the keys to your new home.
Your lawyer/notary public will prepare a "Statement of Adjustments" outlining all the financial aspects of your sale.

Legal Fees and Disbursements

The difference between legal fees and disbursements is analogous to the parts and labour you pay when fixing your car. Your RE/MAX Sales Associate can help you locate a reliable professional, whom you feel comfortable working with.

Home Inspection

A home inspection is an objective visual examination of a home's structure and systems.


Why get a home inspection?

There are a number of reasons why RE/MAX recommends a home inspection including:
·    To ensure you are not surprised by major defects
·    So you can be advised about the various elements of the home including - heating and cooling systems, structure, electrical and plumbing
·    To learn about how the mechanical systems work and need to be maintained
·    Most homeowners are not expert in the numerous components of house construction
·    A third party can be objective as there is no emotional attachment

Who should you hire?

Home inspectors are often referred by family or friends. Your RE/MAX agent can also provide you with a list of inspectors. Look for one that is trained and certified by a national organization such as Canadian Association of Home Inspectors (CAHI) or National Institute of Building Inspectors (NIBI) and who has errors and omissions insurance. Do not hire someone who will do any suggested work due to the conflict of interest.

When should you call?

Order the inspection after your offer has been accepted. The contact will stipulate the length of time you have to complete the inspection.

What is involved?

The home inspection will determine the structural and mechanical soundness of the home. Your home inspector can identify existing and potential problem areas, suggest possible solutions and provide estimates for the cost of the work required. You will receive a report outlining the inspection findings. You should accompany the home inspector during the inspection or arrange to meet them at the home so they can walk you through the report. If as a result of the inspection, you have further concerns, have a specialist in that area conduct a more extensive examination.

What does it cost?

Costs vary depending on a number of factors including:

Size and location of the home, features, age, and services required. Additional services may include radon, septic and well testing. Your RE/MAX agent can assist you in obtaining a quote from a potential inspector before you enlist his/her services.
Mortgage Information
Mortgage lending is a highly competitive field. Information on mortgage rates, which can change daily, is available in local newspapers, through mortgage brokers, from individual lenders and of course through conventional financial institutions. When you are shopping for a loan, interest rates tell just part of the story. You will also need to study the various fees lenders charge and many mortgages today are almost custom-tailored to individual needs with many options available.