How to buy a condo for the first time
If you're a potential first-home buyer, then you know just how confusing the property market can be. This is especially true for condos, which offer a number of fantastic opportunities but also present a range of complex challenges. Whether it's understanding different types of condos, researching locations, or analyzing amenities and fee structures, you always need to do your homework before you make a purchase.
What type of condo is right for me?
Not all condos are created equal, with new or pre-construction apartments available alongside renovation condos and re-sale condos. New condos are widely available across North America, with some cities flooded with choice over recent years. Renovation or conversion condos are also popular in some locations, with re-sale condos describing all existing condos that are bought and sold on the private market.
Getting your finances in shape
Once you have a good idea of what you're looking for, you need to make sure your finances are healthy. You will need to have a deposit to fund a condo purchase, with 20 percent the standard value but as little as 3.5 percent possible for many Government insured loans. You always need to create a working budget, so take a detailed look at your income and debt and don't forget to account for condo fees, property taxes, and insurance.
Getting a mortgage
When you start hunting for a mortgage, you can either work with lenders directly or use the services of a mortgage broker. Brokers are a good idea in most situations because they're able to compare and contrast multiple home loan products and find a solution that works for you. It's also important to understand the different types of mortgages available, so don't forget to do your homework by looking into interest rates, variable vs fixed rates, open vs closed mortgages, and mortgage terms.
Location and lifestyle
Once you've been pre-approved for a mortgage and you have a solid working budget, you can start the condo hunting process. It's normally a good idea to restrict your search to a few neighbourhoods and compare multiple condo communities based on the same criteria. There are lots of things to consider during this phase, including the location, the financial health of the building, the amenities, and the community itself. For example, the type and condition of amenities will have a huge impact on your lifestyle and the amount of condo fees you need to pay every month.
Your monthly condo or maintenance fees are designed to cover the upkeep of all common areas and assets, such as pools, gyms, and entertainment areas. As the most significant cost apart from your mortgage, condo fees need to be addressed from the outset. Older buildings will often have higher fees because they require more maintenance, with smaller buildings also likely to be more expensive due to reduced economies of scale.
Finding the perfect building
With more condos out there than ever before, finding the perfect building can be challenging. It often makes sense to use the services of a specialized real estate agent, someone who has existing relationships with developers and lots of experience in your local area. While you can always visit condo communities in person or attend information evenings for pre-construction projects, having access to a specialist can be a great way to find out about new projects and compare multiple communities quickly.