My husband and I are interested in purchasing a condo. Is buying one very different from purchasing a house? How do we get started? (Part One)
The short answer to your question is that buying a condominium (condo) involves a number of special considerations you won’t encounter when you purchase an ordinary detached or semi-detached home, and you should be aware of them before you make an offer.
The best way to get started is to think carefully about your needs and finances, and then work with a real estate salesperson who has handled similar transactions and can answer your questions.
When you buy a condo, you’re purchasing a unit – and possibly also a parking space or a storage locker – within a building. You aren’t obtaining ownership of the land it’s on, but you will have exclusive use of your condo unit along with the right to use common areas outside the unit, such as hallways, gardens, laundry rooms and other amenities. You’re also expected to pay monthly condo fees to the condominium corporation for services such as security and maintenance, and to follow the corporation’s by-laws. Don’t make an offer on a condo until both you and a lawyer who is insured to practice real estate law have read and fully understand both the by-laws and the condo’s status certificate (more on that in the next column).
If you’re thinking about buying a preconstruction unit, it makes sense to work with a real estate salesperson because they can read and explain the building plans, estimate the various closing costs and possibly assist in negotiating your agreement with the builder. There’s another reason: salespeople and brokers often partner with builder-hosted “VIP” events where preconstruction units are offered for the first time, so they might be able to find you a deal or get you access to the early unit releases.
A problem with buying preconstruction is that you will have to wait for your new home to be built, and your expected move-in date could be pushed back by unexpected construction delays. It’s even possible that the builder or developer could cancel the project and return your deposit, putting you back to square one. Should you make an offer on a preconstruction condo and then change your mind, there’s a legally-required ten day cooling-off period during which you can back out of the agreement. (Please remember that there is no cooling-off period for most other real estate transactions in Ontario – preconstruction condos are an exception).
Your agreement with the builder may not allow you to cancel the transaction after the cooling-off period – or sell/assign your unit to another buyer before the condo is completed. So, make sure you review the agreement with your lawyer, and understand all restrictions and limiting conditions before you sign.
If you have a question for Joe about the home buying or selling process, please email firstname.lastname@example.org.
Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at http://www.youtube.com/RECOhelps.