7 Steps to Buying a Condo
Thinking about buying a condo? Great! It can be a very exciting process, and even more so when you know what you’re doing.
But when you don’t know what you’re doing, a condo purchase can be downright scary and costly. No need to fear though, because we’re going to cover the top seven things you should do when buying your first condo.
1. Get pre-approved for a mortgage.
When you’ve been pre-approved by a mortgage lender, you’ll have more leverage with sellers. Pre-approval means a lender has carefully reviewed your financial situation and found you capable of taking on a loan up to a specified amount. It doesn’t guarantee that you’ll get the loan, but it shows sellers you’re serious about buying.
2. Choose the right location.
“Location, location, location” is one of the most commonly used expressions in the real estate industry, and with very good reason. People often choose condo units over traditional homes with a certain lifestyle in mind. So be sure your condo’s location can accommodate that lifestyle. Experiment. Test out the drive from the potential condo to your work, school, shopping, etc. Does it offer the features and amenities you are seeking?
3. Conduct thorough research.
Condo life usually comes with a number of bylaws, association rules and other declarations. Be sure to get this documentation up front to avoid any surprises later on. You’re making a big financial investment, so you’ll need to obtain all of the facts about what’s permitted and what’s prohibited. While you’re at it, get to know the developer too. Find out their history and expertise. Talk to a few of the residents (when applicable) to get their input.
4. Ask about building services.
Condos often have “built-in” services that residential homes do not, such as recreational space. This can be part of their overall appeal. But don’t assume your prospective condo comes with a certain service. Find out to be sure. Is there a door man? Is there a maintenance man or building engineer? If so, what hours will they be available? What other facilities does it provide?
5. Learn about pre-construction pricing.
Developers will sometimes offer significant price breaks in the early stages of development. They do this to attract buyers during the pre-construction phase, when it’s harder to sell a unit. As construction begins on the new development, demand usually goes up. And we all know what happens to prices when demand rises! So if you take advantage of pre-construction pricing, you could save a lot of money in the long haul.
6. Remain flexible.
If you’re buying a condo during the pre-construction phase, give yourself plenty of flexibility with the closing date. Construction delays are not uncommon, so it’s important to consider this when locking in your interest rate, setting a closing date, scheduling a move, etc.
7. Take advantage of tax deductions.
Speak with your accountant to find out what portion of your assessment is tax-deductible. Other expenses that add value to your condo may also be tax-deductible. Get an understanding of these tax implications before making your purchase.