If you are considering becoming a homeowner, the first thing to decide is the type of property that suits you best. Are you leaning towards a single-family home, or would a condo be a better fit?
In urban areas like Montreal, condos can be more affordable than single-family homes, making them a popular choice. However, buying a condo is a significant decision that should be carefully considered.
While condos offer many benefits, they also come with potential drawbacks, particularly for first-time buyers.
Owning a condo in Quebec: what you need to know
Here's what's you should consider before buying a condo.
What is the process of buying a condo?
The process of buying a condo is quite like buying a single-family home, with a few key differences. It involves searching for properties, obtaining a mortgage pre-approval, making an offer to purchase, and signing the deed of sale at the notary’s office.
However, when you buy a condo, you not only buy your private unit but also a share of the building’s common areas. The entire building is governed by a declaration of co-ownership, a legal document that outlines the rights and obligations of each co-owner.
What is the down required down payment?
The down payment for buying a condo varies based on the property’s price. Generally, if the condo costs less than $500,000, the minimum down payment is 5% of the purchase price. For properties priced above $500,000, the down payment is 5% on the first $500,000 and at least 10% on the amount exceeding $500,000.
Is it considered a good investment?
Generally, a condo in a rapidly growing market, such as a major city or a popular neighbourhood, can be a solid investment. High demand in these areas often drives property values up over time.
However, it’s important to carefully assess condo feed and condominium rules. Unexpected expenses, such as special assessments for major repairs, can affect the investment’s overall profitability.
Which is better: a condo or a house?
The choice between a condo and a house depends on your priorities, lifestyle and budget. Condos are usually more affordable and come with shared amenities like pools and gyms, as well as lower maintenance responsibilities and closer proximity to urban conveniences.
On the other hand, a house offers more privacy, space, and the freedom to make renovations or improvements. It’s often the preferred option for families or individuals who desire a garden, private yard, or additional living space.
5 mistakes to avoid when buying a condo
To ensure a smooth and successful condo purchase, here are five common mistakes to avoid.
1. Falling for low condo fees
It’s easy to be tempted by condos with low fees but be cautious. These appealingly low fees often cover basic maintenance. More extensive repairs or unforeseen issues, such as balcony replacements or roof repairs, may require additional contributions, potentially amounting to several thousand dollars.
Before buying, review the condo’s budget for the contingency fund, which is money set aside for major repairs and unexpected expenses. A fee of just 5% might be insufficient for long-term maintenance or emergencies. Sometimes, opting for slightly higher monthly fees can help avoid unexpected costs in the future.
2. Not checking the building rules or declaration of co-ownership
Buying a condo means investing in both a property and a lifestyle, so it’s essential to get acquainted with the building’s rules and the declaration of co-ownership.
Take the time to visit the property multiple times and interact with current residents to understand the community dynamics. Are the residents primarily owners or renters? Are there many retirees or families with young children? These factors can impact your living experience.
Carefully review the declaration of co-ownership, as it outlines the building’s rules designed to maintain quality and govern its use. As a co-owner, you need to understand your responsibilities and what is allowed within the building.
For instance, some condos may have restrictions on barbecues on balconies or prohibitions on pets. Familiarizing yourself with these regulations before purchasing helps you determine if the environment suits your lifestyle.
3. Forgetting to put all agreements in writing when buying a condo off plan
Buying a condo off plan offers several advantages, such as:
- Choosing from various models.
- Making modifications to personalize your space.
- Enjoying prime location options within the building.
However, it’s essential to put all agreements with the developer in writing. This protects you from potential changes or issues that may arise.
A written contract, detailing all the discussed terms, is much more reliable than verbal promises. It ensures that you receive the condo as agreed and helps safeguard your investment.
4. Neglecting the pre-purchase inspection of your condo
Just as with a house, it’s essential to have a condo inspected before finalizing your purchase, whether it’s newly built or pre-owned. You want to avoid investing in a property with hidden issues!
A pre-purchase inspection by a qualified building inspector will reveal any construction or maintenance problem and potential safety risks. This inspection should cover not only your private unit but also common areas, windows, roofs, and other shared spaces.
If communal areas need renovation, you might face additional fees after the purchase. Knowing about these issues in advance can help you negotiate a lower price, request repairs, or even decide to withdraw from the transaction.
For new condos, make sure to conduct a pre-delivery inspection before taking possession of your unit.
5. Failing to analyze market comparable
If you’re working with a real estate broker, they can provide valuable insights into the market and help assess whether the asking price for the condo is reasonable.
However, if you are handling the buying process yourself, it's important to compare other condos for sale in the area. Use real estate websites to review listings and get a sense of market prices. While you might not have access to as detailed data as a broker, you can still gather enough information to gauger whether the condo you’re interested in is priced appropriately. This comparison will help you make a more informed decision and negotiate effectively.
Are you looking to purchase a condo?
XpertSource.com can help you find a real estate broker. When you tell us about your project, we put you in touch with qualified resources for free. Simply fill out our form (it only takes a few minutes) and we will connect you with professionals.
