When you walk into a developer’s sales office, it’s difficult not to be completely swept off your feet. From amazing customer service, to professional sales people and convincing visual content, the entire environment is set to make a sale before you even realize you’re actually interested. The team member at the sales office is so kind, so trust-worthy, and so interested in your needs that you forget that his or she is not your friend, this is a person paid by the developer to protect HIS interests. And in the time that you spend awing over the premium finishes and picturing a morning workout in the rooftop gym, reality is that you won’t ask the questions that you should be asking, something that they are banking on.
Even if you are or were a homeowner in the past, buying a condo is a different ball game, and there are some things that you should be aware of and research before you make an offer.
- Condo Fees Change
If you are buying a new build, you might be surprised at how low the monthly condo fees are compared to other units that you viewed. There’s no coincidence there! The developer purposely sets the fees low so that buyers don’t mind spending a little extra on their units. However, once the developer hands over the management of the building to the newly formed condo board, the prices usually rise and significantly so as the building ages. That’s because at that point the condominium requires more maintenance and repairs that it does in its first few years, collectively raising the condo fees. So if low condo fees are a draw for you, don’t expect it to stay that way- it’s all variable.
- Rental Restrictions
In some real estate markets, builders are forced by the city to write in restrictions regarding renting or selling the units. These either ban renting your unit all together or doesn’t allow for it within the first years of ownership. Other common restrictions that are meant to limit the amount of “flipping”, are clauses that prohibit the sale of the unit without the owners living in it for X number of years. This is definitely something that you, your realtor, or your lawyer needs to go over before you put down a deposit.
- Differing rules for maintenance
Every condo is different in its construction and different in its legal nature. This translates to the fact that what is and isn’t included in the building maintenance is buried somewhere in your condo’s policies. For some, windows and balconies are maintained by management, for others basic appliances are included as well. Some restrict how you can change the inside layout of your unit, so take your time reading carefully because otherwise you can end up being sued, paying fines, or just shelling out a lot of money on maintaining your unit.
- Insurance and Protection of Co-owners
There are many things that can go wrong with the construction of a building. From massive delays, to poor construction, or faulty engineering, it’s important you know what kind of insurance you and the other co-owners of the building have. It’s something that the sales rep won’t want to go into with details but is a good idea to bring to a Law Firm that is specialized in Real Estate and more specifically has a niche practice in condo law. They can look over the paperwork and be ready to defend you if an issue arises.
- You can use a realtor
No condo salesperson will tell you this, but it’s perfectly ok for you to bring your own 3rd party representation with you in the form of a real estate agent. Your realtor can compare the property with similar ones in the area, help you see the strengths and weaknesses of the building and advise you realistically about resale value in the future. The best part is that you don’t pay anything. The condo developer is the one that ends up paying the real estate agent for his or her work.
Buying real estate is always a tricky business, but especially so if you are looking to buy a condominium. While the lifestyle of a condo dweller might attract many buyers, there are some considerations to take into account when buying a prebuild or existing condo unit.