There are a lot of things to consider when you are buying a condo whether you are going to live in it or rent it out. You could be sorry if you just jump right in and make the purchase without doing your due diligence. There are too many documented cases of people in Calgary and other cities that lost a lot of money because of some unexpected expense due to shoddy construction on their condos.
First, I will list the process you should follow if you are going to buy a resale condo.
- Use an experienced realtor to help you find and buy your condo. You can start your search on the internet to narrow down your preferred locations and the type of condo you would like, but make sure you get a realtor to take you through the condos. Do not call the listing agent because they are representing the seller. They are legally required to do what is best for the seller, not you. You need your own agent that is a certified condo specialist to look after your best interests.
- When you find the condo you want to buy, make sure your realtor adds the following buyer conditions into the contract.
- Financing condition – this gives you a week to 10 days to get your financing approved. This is not the same as a pre-approval. That only approves you for a mortgage, but the bank also needs to approve the property you are buying for the mortgage.
- Condo Document Review – this gives you a week to 10 days to hire a professional condo document review company to analyze the condo documents. This will include at least a year of condo board meeting minutes, the reserve fund study, and financial statements. This will tell you if the building is well managed and has adequate funds in place for all scheduled maintenance items such as replacing windows, or elevator repair.
- Home Inspection – Most people only get a home inspection if they are buying a townhouse style condo since those are more like a detached house than an apartment style condo is. However, it is critical to have a good look at the exterior of a apartment style condo since there are a lot of things that could go wrong and cost you a lot of money down the road.
Here are some things to look for in any condo.
- Stucco – This is probably the biggest cause of special assessments for condos in Alberta. A special assessment is when a repair needs to be done on your building that was not budgeted for in your condo fees. If the stucco was not applied properly it can cause leaks and allow moisture to get in behind the stucco which can cause rotting of the structure of the building. This problem can be very expensive and it usually costs each owner at least $10,000 to have it repaired depending on the size of the building. There have been cases where the special assessment has been as high as $100,000 for each owner. If you or your home inspector have any concerns at all about the stucco on the building do not be afraid to ask a Calgary stucco professional such as 5.0 Stucco for their opinion. Watch the video below about stucco problems on condos in Vancouver for some tips on what to watch for in Calgary.
- Elevators – These are very expensive to repair and maintain. Make sure this type of work is in the budget.
- Windows – Are these your responsibility or is their eventual replacement in the budget?
- Decks and balconies – Again who is responsible for their maintenance.
- Roof – The replacement of the roof should be an item in the budget.
- Parking – Is your parking spot titled? If it is assigned, can the condo board change your parking spot without your approval?
- Pets – You may need approval from the condo board to have a small dog or cat.
Condo living is not for everyone, but if you have a busy lifestyle and like to be able to come and go as you please, it can work for you. Just make sure you do your homework or you could be stuck with a special assessment or higher than normal condo fees for years to come.