Buying your first home is a huge decision and monetary investment, so it's important to do research before diving in. With new condominium buildings popping up every day in Toronto, more people are opting for the convenience and contemporary lifestyle a condo can offer. However, you need to be sure you have covered all of your bases, and are prepared for everything this exciting venture has in store.
We put together our top five tips for first time condo buyers, so you can buy confidently.
1. Get prequalified for a mortgage
The first step when buying a house is to get a mortgage, and buying a new condo is no different. A mortgage is a legal agreement in which a property is used as the security for your loan repayment - the loan being the funds used to buy your new home. If you meet all the requirements of the mortgage agreement, at the end of the repayment schedule you will own the property outright. Most people have to secure a mortgage for their first home, and by being pre-approved for one before you select your condo, you have a much higher chance of bagging your ideal place.
Most people get their mortgages from a bank, who will look at your income, any debts you may have, your downpayment and your credit history. A pre-approved mortgage will show you the maximum amount you're able to borrow, and the interest rate you'll pay on the principle.
2. Be aware of the unit specifications and the building plans
When buying a condo, it's important to inspect and consider the same things you would when buying a detached home. Where it gets trickier is when you buy a condo that isn't completely finished yet.
One of the benefits of buying pre-con is that you have more flexibility with the details of your unit. Not only can you pick a floorplan from the newest properties on the market, you can also decide which floor you want to live on, and even which way your windows will face. If you’re a morning person, you could pick your perfect east facing property so that you are greeted by the sun’s rays each day.
However, it's important to take in all of the details laid out in the unit specification and building plans, so that you don’t get any unwelcome surprises once the construction is complete. If you do spot something you aren’t too keen on within your property, your developer may be able to make some tweaks.
One thing you should keep in mind is the estimated completion and move in dates (these are often slightly different, as many condominium buildings allow residents to move in while higher levels and amenities are still being completed). Pre-construction projects typically take three to five years to reach completion, so if you are hoping to move into your new place any sooner, you may want to ravoid going pre-con.
If you are buying an existing condo, just be sure to check and double check the interior when you view it. Speak with the property manager about any concerns you have, and make sure you are aware of all of the amenities available to you.
3. Know what you want
Your first home is going to be a big investment, so you may as well be certain you're putting your hard earned cash towards something you truly want. Make a list of your must-haves and wants to narrow down potential homes.
Think about how many bedrooms you need; do you want a den? Is storage space a necessity? Are you someone who needs to spend time outside? If more intricate details are important to you, like the material your kitchen counters are made from, many pre-construction condos allow for you to make these amendments prior to their installation, albeit at an additional cost.
4. Make sure you can meet the conditions and pay the deposit
Whether your first property is a detached house or a condo unit, there will be a number of conditions that you have to meet as part of the Agreement of Purchase and Sale. These conditions will be the deciding factor on whether the transaction is granted or not.
The agreement is a written contract between the person selling the property and the person purchasing it. Terms and conditions will differ depending on the property, but they always have some financial factors to ensure you can make the appropriate payments, including the deposit.
Condo units will ask you pay a deposit, especially pre-constructions, so that you do not abscond from the purchase at a later date. For pre-construction buildings, you're deposit will be around 5% of the total cost, and will count as the first portion of your down payment.
5. Be prepared to pay residents fees
Most shared buildings come with fees - i.e. condo fees. The fees are collectively gathered from all residents and are used to fund maintenance and construction projects. From new paint jobs to funding your 24-hour security systems, resident fees are a necessary to make sure your building remains in good conditions. The fees are shared among all condo-owners in the building, but may vary depending on the size of your unit.
Make sure to ask your developer or property manager about them, as condo fees are sometimes left out of the initial price of your unit.
6. Be time conscious
On the one hand, you don’t want to rush into anything. Buying a property is a big decision and isn’t something to be taken lightly. Rushing into buying the first property you see, before viewing anything else on the market, could result in disappointment further down the line.
On the other hand, you also don’t want to drag your feet when making a purchase, especially if you’re buying in a busy market like Toronto. The market can be a fast-moving and volatile place, and if you spend too long pondering whether or not to make an offer, another buyer may swoop in and claim the unit you'll regret not committing to.