You might have come to the conclusion that this is a good time to buy a condo, but buying a resale condo is challenging in the current Toronto real estate market. Especially if you are looking to buy a home under $1 Million, which is in a very high demand. The condo market is currently in low supply and high demand. The important thing to consider is the differences between buying a brand new condo directly from a developer and buying a previously owned resale condo.
As a Top Toronto REALTOR who does lots of resale condo transactions, I would like to tell you about important tips you need to consider in buying a resale condo in Toronto.
Certainly buying a resale condo has its cons and pros. One of the main advantages of resale condos over pre-constructions is that you can actually see what you are buying. For example, the space, the light, the amenities, the neighbors, even the actual maintenance. And another advantage is that HST is already included in the price when you buy a resale condo in Toronto. Whereas in pre-constructions there might be situations that you’ll have to pay up a portion of the HST on the closing.
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Besides, when you buy a resale condo, everything is already ready and you can start packing and moving within a few days or weeks. But for a pre-construction or new condos it would be different. It may take years for you to be able to move into your condo.
Since some resale condos might be older, they might need some repairs or improvements, which means extra cost during the time. So you better pay attention to some important tips while buying a resale condo in Toronto.
The unit factor means each owner’s share of ownership in a condominium building or complex. Is your unit factor reasonable or not.
Hiring a professional inspector helps you evaluate the condition of both your unit and the whole condominium complex especially if you are buying a condo detached or townhouse. Usually for condo apartments people skip this unless the condo apartment is very old and there is suspicion of any defects.
A reserve fund is a savings account set by the condo corporation for any unexpected costs or financial obligations in the future. Every condo has a status certificate which includes fund studies and technical assessment and audits. So, it is important to review the condo’s status certificate before purchasing it.
If the condo has a million dollars reserve fund and it’s an 800 unit condo apartment, it is not enough. For smaller condos with less number of units, a smaller reserve fund might be more than enough. Condo management needs to know what repairs need to be done to predict the costs. Ask an expert’s opinion to know whether the reserve fund can cover all the renewal costs or not.
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Financial documents such as fund study, or any audit, are the documents that the condominium corporation is obliged to provide under the Condominium Act. These documents also include the annual report of operating budget, end-of-year financial statements which come as an attachment to the status certificate. Review all the financial documents before buying a resale condo.
Final purchase price
Specify everything which is and is not included in the purchase price. This can help you to compare the final purchase price with other condos. You should know what amenities are available and how are they paid for? Are the water, gas, and electricity charges included in the monthly condominium fees? Or other charges which may be added to the final purchase price.
Try to find out if there are any special assessments predicted? Even for unit renovation or condominium maintenance costs. Or are there any secret costs you may need to know before buying? Like long-term leases or any costs passed along from developers to owners.
As the last short tip: Make sure all the renovations or renewal that have been done in the unit, were authorized by the Board of Directors and the seller had all the necessary approvals.