Preparing to buy a condo in Edmonton, Alberta:
Is condominium ownership right for you?
There is a lot of confusion when people think of condos they usually just think of the apartment or stacked buildings, but condominium ownership is where you have a management company or an elected board that makes the decisions and runs the entire complex as far as maintaining grounds and common areas, recreation facilities like gyms or pools, normally they look after everything exterior of the unit, like windows, doors, roofs, shingles etc. but you need to make sure you know exactly what they are going to cover by reading through their bylaws as some complexes I have seen do not pay for window replacement as an example….
Condos come in different shapes and sizes as well, you do have your low-rise and high-rise style, 2 storey town home, or adult bungalow just to name a few of the more common types.
Some Condos are completely maintenance free whish is great if you are a busy person that doesn’t want yard work or if you are a snowbird and want to go south for 6 months of the year, just lock up and leave! *Disclaimer please check with your insurance company to see what their policy is on how often your home needs to be checked on…
Ok so now that you understand what a condo is here are the steps to get yourself living in one!
STEP 1. Choose an excellent realtor you can trust Talk to a realtor to find out what options you have based on what your budget is. Do you want newer or is older ok?
Do you need space and a yard? Then a townhome style might be a better option for you, and if you go that route do you need a garage or is an outside parking stall ok? Is there enough street parking around?
If you go with an apartment style or stacked condominium, make sure there is enough space inside the unit! If not, does a storage unit come with or is there a storage room on the balcony? Is the Parking stall above ground, under ground, can you buy or rent an extra stall if needed?
What area do you want to be in? Downtown or close to your work or schooling or University, or do you want to be in the burbs?
Now that you know what you want to live in here are some more questions to ask yourself that might be important in looking for in a condo:
How close is it to, grocery stores, highways, bus stops, LRT
Is there a View or which direction does it face?? If it is north facing it won’t get as much sun as south facing, does the bedroom face west? If so Then it will be warmer in the summer at night! Is there central air conditioning or Are you allowed window units?
What Size or Square footage do you need?
How many bedrooms?
How many bathrooms?
Monthly maintenance fee (what is included?) Which Utilities are included?
What are the Property taxes?
Are there specific Condo rules and regulations?
Is the Building secure or have they had lots of break-ins?
Do you want Amenities like a Pool, Sauna, Steam room or Gym?
Is there a party room, social room, Conference room or Games room – these don’t come free so if you do get a building that has these make sure you use them!
Is there Visitor parking available and what restrictions are there for parking hours?? I have heard horror stories about people getting their vehicles towed after visiting with residents for just 1 hour of being in visitor parking without having a proper parking pass!! ABSOLUTELY RIDICULOUS!
STEP 2. OBVIOUSLY you have your mortgage Mortgage Pre-approval in place!! If not, you might want to watch my last week’s video on the difference between a full mortgage pre-approval vs just a pre-qualification.
STEP 3. GO OUT AND LOOK AT SOME PLACES! This is where you will really get a feel for the space inside, now before you do that it is a GREAT idea to drive around the area at different times of the day to see traffic, time your drive to work, or get a feel for the people that live in the area or specific complex. Take a look at the vehicles in the parking lot too! Are they beaters with flat tires? If so this might tell you what kind of people live in the complex!
STEP 4. When you finally find a place that you can see yourself living in you are going to make an offer. Your offer will be based on other units that have sold in the building and other comparable units, your realtor will do a Comparative Market Analysis to ensure you are not overpaying for the unit based on current market conditions. Your realtor will negotiate back and forth on your behalf to get you the best price and terms for you. Once you’ve reach an agreement with the sellers and your offer is accepted you will be “Pending” and you move onto…
STEP 5. YOUR DUE DILIGENCE TO SATISFY YOUR CONDITIONS! Your offer will be conditional on Lender Financing, a home inspection, do a title search And review the condominium documents.
Why Do a title search? The listing agent is supposed to pull title when they list the home, but if it sits on the market for a month or 2 things can change! I had buyers that offered on a condo, I pulled the title and the bank had pur a lein on the property, the seller was almost foreclosed on! Thankfully we were able to sort everything out and my buyers are living happily in their new home.
Then the Condominium documents! Condominium documents in Edmonton Alberta will include:
-The amount of the monthly contribution ( referred to as condominium fee) and the basis on which that amount was determined – check over the past few years to see if they have increased and by how much, if they haven’t, are you going to get hit with a HUGE fee increase. They usually increase fees once per year.
-any structural deficiencies that the corporation has knowledge of, at the time of the request, in any of the buildings that are included in the condominium plan.
-Copy of any proposed special resolution awaiting a vote
-Copy of any special resolution that has been passed but not yet implemented
-Easement, covenants and restrictions (ECR) agreement
-The Particulars of:
i. any action commenced against the corporation and served on the corporation
ii. any unsatisfied judgment or order for which the corporation is liable
iii. any written demand made on the corporation for an amount in excess of $5,000 that, if not met, may result in an action being brought against the corporation
-Minutes of Annual general meeting
-The Budget of the corporation
-Building or site report such as a building assessment report, building envelope report, geotechnical report, technical audit, or performance audit if available
-Bylaws of the corporation – This document will contain important information on use of property, pet/rental/age restrictions, and other important rules imposed by the strata. You’ll want to know what you can and cannot do, based on the rules and bylaws, before removing conditions! Don’t assume that because you’ve heard that you can bring in a pet that means you can have a BIG DOG, maybe they only allow 1 small pet in.
-The Condominium additional plan sheet certificate
-The registered Condominium plan
-Financial statements of the corporation, including the most recent year-end and month-end, make sure they have enough money, money, money!!
-If a Homeowner association fee is applicable
-Insurance certificate – you’ll need to make sure that the insurance coverage is enough to satisfy your lender.
-Lease agreement or exclusive use agreement with respect to the possession of a portion of the common property, including a parking stall or storage space
-The Management agreement
-Minutes and draft minutes of meetings of the board of directors for the past 12 months – this can look like a complaints list or can give you a sense of community within a complex, believe me I have read through some crazy one!
-Post tensioned cables located on the property that is included in the condominium plan
-A Recreational agreement
-AND THE Reserve fund, there are 3 components to this, the reserve fund report, the reserve fund study, and the reserve fund plan. This is the big one that tells you if there is enough money in their bank account to do the work or maintenance required over the next 25 years! An engineering firm is hired to do a new study every 5 years and they give their report, study and plan to the management company or board members with recommendations of work to complete and whether condo fee increases are due! find out whether any special assessments are anticipated, what they are for, how much they might cost and when they will need to be paid. Ask your experts to verify that there’s enough money in the reserve fund to cover the cost of major repairs and renewal projects.
You don’t have to go through it alone either, you can get your lawyer, realtor or hire a professional condominium document review company to go through everything and give their opinion or advice on the documents.
Checklist for Buying a Presale New Build Condo
The presale process is different than the resale process in the sense that when you are buying a new build presale the condo is not built yet. The strata documents will not be present as the strata has not been formed! However, it is still important to:
Triple check your contract and make sure you are aware of any hidden fees, what’s included in the contract, the anticipated completion date, end date, and details of your contract.
Inform your mortgage broker that you are purchasing a presale and assess your future financial plans and affordability before moving forward. Make sure the lender will fund a draw or completion mortgage!
Research the developer or builder – check google or ask your agent if they know anything about them.
So once you’re satisfied with the condo documents, your lender has given you their approval on financing and you’ve completed your home inspection you have the option of waiving your conditions. CONGRATULATIONS you’ve bought a condo!!
Prior To Closing On Your New Condo:
*Set up utilities (cable, internet, electricity, gas)
*Get proper Insurance activated
*Sign your Mortgage documents
*Change mailing address
*Book the elevator for move in
HERE ARE THE TOP 9 MISTAKES I HAVE WITNESSED OVER THE YEARS!!
- NOT JOINING YOUR BOARD OR AT LEAST ATTENDING THE MONTHLY BOARD MEETINGS! This is your chance to have a say in how the complex is run and where your money will be spent, take 1 night a month for your financial future!
- NOT HAVING PROPER INSURANCE! You need contents and liability insurance! If your sink, dishwasher or washing machine leak and cause water damage to the unit below you, you will be at fault and your insurance will be used to pay to fix the damages!
- NOT READING THROUGH THE BYLAWS! – among MANY other things this will tell you what restrictions the building has – like can you have a satellite dish on your balcony, are pets allowed and how many, are BBQ’s allowed or can you put your bike on your balcony? If you decide to rent a room or the entire condo is that allowed or are there restrictions?
- NOT CHECKING OUT WHAT THE NEIGHBOURS ARE LIKE! Do they have loud pets? Do they have loud children? Is the unit above you constantly stomping around and making noise? Try to get a feel for who you’ll be living with, and what noise reduction measures and solutions have been used in the past.
- NOT KNOWING THE DIFFERENCE BETWEEN A TITLED PARKING STALL VS AN ASSIGNED STALL! and not having it written properly on your purchase contract! If your agent doesn’t include it on the purchase contract you might not get it! How would you like to move into your new downtown highrise condo and find out your parking stall wasn’t included in the deal, ooops….
- NOT PURCHASING IN A BUILDING OR COMPLEX THAT IS SUITABLE!! As an example – If you are lets just say 45, 55 65+ years of age, don’t buy in a complex where there are tons of young children or “young adults” unless you enjoy loud voices, video game noise or rumbling bass from the latest Vin Diesel car driving movie… And don’t buy a 2 story home if you can’t do stairs and really need a bungalow!
- NOT DOING A HOME INSPECTION!! One of the biggest hidden issues is with condos with Poly-B or Polybutylene water lines! Those were used instead of copper because they were cheaper, flexible and easier to install. HOWEVER they deteriorated over time and would eventually develop hairline cracks or pinholes and they would leak! If the condo was built between 1978 and 1998 you want to pay close attention & look to see whether the waterlines are copper, poly-b or Pex!
- BUYING WITHOUT THINKING ABOUT RESALEABILITY!! A fresh coat of Paint, some new flooring, granite counters or repainted kitchen cabinets are some quick ways sellers can spruce up a unit with many hidden issues in order for them to get rid of their problem! Don’t let your emotions take over and pay too much for something that you could save thousands of dollars on. ALSO don’t get wrapped up on staging because those pretty items will be gone when you take possession and your furniture moves in. If you’re on a budget, look for a home that needs some cosmetic work and whose full potential has yet to be realized. First-time buyers can build equity by painting, changing light fixtures, doing flooring and seeing past clutter.
- NOT USING A REAL ESTATE AGENT! Once you’re seriously shopping for a home, don’t walk into a showhome or an open house without having a real estate agent with your (or at least being prepared to throw out a name of someone you’re supposedly working with). Agents are held to their fiduciary duties that they must act in either the sellers or the buyer best interests, but you can see how that might not work in your best interest if you start dealing with a seller’s agent or new home consultant before having someone represent your interests & the best part about that is that it is FREE!
I sure hope you have found this to be helpful, if you have any questions or comments, please let me me know I am more than happy to assist you however I can!
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