10 of Our Best Tips for Buying a Condo

Expert Tips for Buying a Condo In Ontario

If you want to buy a condo, you've come to the right place for Ontario condo buyer tips.

Our goal is to help you through the condo-buying process by providing you with useful and helpful information. Condominium living is a preferred residential option for many people. Buying a condo can be a perfect way to get into the housing market. This is because condos can often be purchased for less than the price of standard single-family homes. For others, condo living is a preferred urban-living option that meets their residential needs and wants and offers easy access to many urban life amenities. Others love condo living because the homeowner's responsibilities are limited to what is inside their unit. There is no grass to cut, no snow removal, no gardens to weed, and more. Condos are, for many, a smart real estate investment and a perfect place to call home.

So, on to our top tips when buying a condo.

1. Know what type of condo you want to buy

Get started by making a wish list. Yes, a wish list, but not an unattainable one. Make a list that's guided by reality. Ask yourself what you want in a condo and what you can reasonably afford. Include details on the kind of condo you would like to own.

Some questions you may want to ask yourself are:

  • Do you want to live in a high rise, a low rise, or a townhome-style condo with a backyard? 
  • Where do you want to live?
  • Do you want a condo unit in the heart of a city? Do you want one that's in a residential area?
  • Do you want to be close to public transit, shops, theatres, and schools?
  • Do you want amenities such as a parking space, a pool, a fitness room, 24-hour security, and an always-on-duty concierge? Is a party or social space important to you?
  • Do you have a preferred size in terms of square footage?
  • Do you want to buy a new condo or an older one?
  • How many bedrooms do you need? What about bathrooms?
  • Do you want a large kitchen or will a smaller one do?
  • Would you prefer to buy a condo with an open concept floor plan or one with a more traditional layout?
  • Do you have a preference in terms of view or sun exposure?
  • Do you want a balcony?
  • Do you need a pet-friendly condo development?
  • If you want to buy a condo townhouse, what size is best for a backyard? Do you want a patio?

There is a lot to think about, and a wish list can help you organize your mind in terms of criteria. Maybe you won't be able to check off every box on your wish list, but listing these can provide helpful guidance as you make your way through buying a condo.

2. Know Ontario's Condo Ownership Options

There are two basic types of condo ownership in Ontario: Freehold condominium corporations and leasehold condominium corporations.

Freehold condominium corporations

Freehold condominium corporations fall into three categories: Standard, common element and vacant land.

  • Standard condo corporations are the most common type of condo ownership in Ontario. Whether it is a high-rise or low-rise development, purchasers own their units in a standard condo corporation. The owner buys the unit and has an interest in common property or elements. Owners pay monthly fees, which help to pay for expenses such as maintenance and improvement of common features such as parking areas, gyms, swimming pools and other shared elements.
  • Common element condo corporations have shared elements of ownership only, not units. Examples of common elements with shared ownership include amenities such as a golf course.
  • Vacant land condo corporations do not need to have buildings constructed before the condo corporation is registered. In these situations, you may be buying a lot or unit before structures are built. In these situations, where you cannot see what you are buying, it is advised that you thoroughly read and understand documents related to this type of purchase before buying. Of course, reading and understanding documents - and getting advice from a lawyer - is recommended whenever you are purchasing real estate.

Leasehold condo corporations

Leasehold condo corporations are where purchasers have a leasehold interest only in common elements and units. A condo corporation does not own the land. A third-party property owner owns it. The condo leaseholder has a right to occupy the unit during the lease term. The unit leaseholder can 'sell' their condo. However, the selling price may be impacted by the time left on the land lease. At the termination of the lease, the condo dweller's right to occupy the unit ends unless the lease is renewed.

3. Understand The Difference Between Buying A Condo and Buying a House

A condo and a standard house, such as a single-family home, are both properties you can buy. Beyond this, the main difference between being a condo owner and a house owner is what is owned.

When you purchase a home, you own the residence, the property's land, and features, such as a swimming pool, garage, and shed.

As a condo owner, in most cases, you will own your unit and share ownership in shared features - parking areas, elevators, concierge services, the lobby, recreational elements and more - with others in your condo community. A condominium corporation owns the condominium complex, and you are a shareholder. The corporation is managed by a board of directors elected by the owners. As an owner, you have numerous rights, such as the opportunity to seek election to the condo board, attend board meetings and vote at meetings.

Condo owners also have responsibilities which are set out by the board. Some of these include following bylaws, paying condo fees to maintain shared elements, and paying for a property manager and/or a property management company.

The Condominium Authority of Ontario and the Condo Owners Association are excellent resources for those wanting to dig deeper into the details of Ontario condo ownership.

4. Know The Cost of Condo Ownership

Knowing the cost of condo ownership is essential, and you should be fully aware of these and your budget before you buy. When you buy a condo, you will likely have a mortgage. Assistance from a mortgage professional is essential to help you determine how much you can borrow for your condo purchase and what your condo mortgage payments will be.

As a condo owner, significant expenses you will be responsible for paying include:

  • Your mortgage
  • Property taxes
  • Utilities
  • Monthly condo fee/monthly maintenance fee
  • From time to time, there may also be special assessment fees charged to condo owners by the condo corporation when significant repairs or upgrades are required, such as replacing air conditioning or heating in your condo building.

It is also helpful to be aware of other costs you may incur, such as buying furniture, improving your unit and appliance repairs/upgrades.

5. Ask Yourself if Buying A Condo is Better Than Renting

There are several considerations when deciding whether to rent or buy a condo. Among these is determining if you have the financial resources to buy a condo and, further, if purchasing a condo is where you want to invest your money. Buying a condo can be a sound long-term financial investment. Condos, especially in Ontario's GTA, are a good investment. Condos are in demand, and prices are rising. This is good for owners looking to grow their residential investment. Rising prices can make it difficult to get into the market; however,  if you think prices will continue to go up, you may want to get in sooner than later, assuming you have the financial resources.

Some say buying is preferred over renting because rental payments are perceived as money 'out the door' each month. The thinking is that rent payments could/should be put toward purchasing a home as a payment against your mortgage. On the other hand, renters do not have to worry about many residential costs beyond paying rent and perhaps utilities. Keep in mind that there are other ways to accumulate wealth beyond investing in real estate.

6. Know How Much You Can Spend and Get Pre-Approved For A Mortgage

It's always good to know how much you can spend before you begin your condo-buying journey. By getting pre-approval for a mortgage from a mortgage lender, you will better know of how much you can spend.

A mortgage is a loan to help you with financing the purchase of a property such as a condo. Usually, mortgage loans are from banks or private lenders. When you contact a bank representative or mortgage broker, they will review your finances and help you determine how much money you can borrow. The lender will want to review details such as your investment statements, bank statements and proof of income. It is important to compare mortgage interest rates and loan terms, such as the amortization period, which is the length of time it will take to pay off your mortgage fully. Even a slight difference in interest rates, for example, can make a big difference in the amount you will pay in payments and overtime.

It is also important to work with the right mortgage broker. Ask for referrals from friends or family. Check online reviews. Make sure you select someone with a good reputation who you can work well with.

Buying a condo is a substantial financial investment. It's essential to understand your budget and the financial commitments of a real estate purchase.

7. Work With The Right Real Estate Professional

Working with a real estate professional is a terrific way to navigate the condo-buying process. Let's face it, buying a condo can be complicated and stressful - everything from finding the right place to buy to making your way through making an offer and having it accepted.

Find a real estate agent dedicated to helping you. Work with someone who can provide sound advice, understands your needs, and takes the time to provide personal and friendly service. Buying a condo is a substantial financial step. It can also be emotionally taxing.

Sometimes the best way to find a real estate agent is by referral from a family member or a friend who has had a good experience. Another way to find a suitable agent or brokerage is to look at online reviews. Customers' words in these reviews can provide a wealth of helpful information.

It's best to meet with the real estate agent to discuss what kind of condo you want to buy and share your wish list. Some agents specialize in condos. They know the condo real estate market, the inventory of units on the market, purchase price ranges you can expect to pay in particular neighbourhoods, and more. They can also provide details about neighbourhoods where you are thinking of buying - schools, restaurants, and much more. 

The bottom line is to work with an agent who knows their stuff and will help you through the buying process.

8. Hire The Right Lawyer

Hiring a real estate lawyer is essential when buying a condo. The right lawyer will provide helpful and important advice and direction and know the rules and regulations of real estate transactions. Expect your lawyer to do the following:

  • Write up and review your mortgage documents
  • Ensure there are no claims listed against the property you are purchasing
  • Review the purchase agreement for your condo and other legal documents
  • Make sure you have a valid title upon closing
  • Determine land transfer tax at the time of closing
  • Make sure property taxes are up to date
  • Arrange for title insurance on the property being bought
  • Make sure all legal and financial conditions are met, and the transaction closes
  • Communicate with the lawyer representing the seller to exchange legal documents and keys and other details that may arise.

Referrals from family and friends may be helpful when you are looking for a real estate lawyer. Reviewing online reviews can also be beneficial. Hire a lawyer who knows real estate transactions and with whom you are comfortable working.

9. Get Condo Insurance

Condo insurance is not required by law in Ontario; however, your mortgage lender will likely require you to have condo insurance, and it is a great protection to have to protect your investment. The condo corporation may also need you to have condo insurance. Condo insurance provides protection inside your individual unit for the following:

  • Losses or damage to your condominium unit
  • Your belongings
  • Improvements you have made
  • Liability for insured damage or injury to others while in your condo.

These protections are important because if you suffer a loss and do not have insurance, you will be responsible for paying for repairs or losses yourself. Condo insurance protects you against the costs of paying for insured losses. 

Our Morison Insurance brokers know condo insurance and will answer all of your questions, explain details and get you several competitive condo insurance quotes. We will also suggest ways to reduce your insurance costs and get you every discount you are qualified to receive. Get condo insurance from a broker with a solid reputation. Select a broker who provides prompt,  professional and personal service. If you have a claim, you want to be sure you are looked after quickly. Online reviews are a good source of information about a broker. Customers can provide details on levels of service and insurance knowledge.  We encourage you to read our online reviews to know our Morison Insurance broker team. 

10. Enjoy Your Condo-Buying Journey

Remember to keep your eye on the goal: Buying a condo you will love living in. Buying a condominium is exciting. Yes, there is lots to think about and some work involved. However, when all is done and you are settled in your new condo home, the feeling can be spectacular. It's been said many times before, and it's true: A home is not just a place - it's a feeling. We very much hope you enjoy the place and the feeling.

This content is written by our Morison Insurance team. All information posted is merely for educational and informational purposes. It is not intended as a substitute for professional advice. Should you decide to act upon any information in this article, you do so at your own risk. While the information on this website has been verified to the best of our abilities, we cannot guarantee that there are no mistakes or errors.

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