Ask anyone who has bought a new condominium suite recently and they will tell you: (a) it is not like buying a house, (b) it is not like buying a resale condo, and (c) unless you are prepared, the cost of closing the deal will make your hands shake and make this buying process extremely stressful.
So, what do buyers need to know about buying that 485-square-foot home in the heart of the club district in Toronto or the 780-square-foot, two-bedroom high in the sky overlooking Square One in Mississauga?
What should they ask their lawyers long before closing?
Here are a few basics that you should know:
- The real cost of both closing the deal and the fees involved in living in that new condo each month;
- Exactly what you will get for the price you pay;
- The rules you will have to abide by if you do not want to face everything from neighbours pounding on the walls to the condo board suing you.
Real costs When you buy a condo, you will take on mortgage payments, of course, but you will face other costs — both lump sums and monthly charges. Consider these costs as early as posssible. It would be very beneficial to you to make sure your agent is competent to answer all your questions.
Get to your lawyer immediately; bring along all the documents and go through them with him or her. Please be informed of the amounts of your fees because they could be sizable. Having an agent who has had experience in the purchase of a brand new condo would be beneficial.
A new condo in the $200,000 range may carry total closing costs of $8,000 or more. That includes not just expected costs — such as legal fees of maybe $2,000 and both the provincial and city of Toronto land transfer taxes — but a slew of charges levied on the developer by the municipality and then passed on to you.
Pay close attention to what you will have to fork over every month. Yes, there will be that mortgage payment, but there also will be a monthly maintenance fee that covers your share of the building's operating costs. The average across the Greater Toronto Area right now is 43 cents a square foot. That means an extra $430 a month for a 1,000-square-foot suite, and that probably does not include your electricity costs since, in most new condos, each unit has its own hydro meter.
You may also face user fees for things you might expect to be free. It might include a fee to use the party room or a fee to have mom and dad stay the night in the guest suite.
What you are getting If the extra cash required on closing comes as a shocker, so might the look of your suite when you finally move in. You will have to make an appointment to choose your finishes for your personal condo unit. The finishes and fixtures that you may see in the model suite will probably be upgrades and unless you pay for them, you will not get them. You may also be buying a smaller unit than the one that is being modelled. If you do not choose your finishes, know that you are going to get the builder's choices. Find out if the appliances are included and what kind they will be in relation to color and brand. Sink faucets are also an issue as is flooring. You must know what a 10 foot by 10 foot really looks like. Closing dates may be delayed. Know the Tarion Warranty Corporation rules governing delays and have a standby plan if your condo is delayed.
Rules and regulations When it comes to condos, your home is definitely not your castle. Every project is going to have written rules that are aimed at guaranteeing all residents quiet enjoyment of their units.
That can mean a limit on the kind, number and size of family pets. There may be no barbecuing on balconies. It can also limit the number of people living in a suite, when, how and with whom you can use the pool, how loud you can play your sound system and even what colour you can paint your front door along with the color of your window coverings.
The buyer MUST make sure to know the answers to all of the above issues, and there will be more, before you close the deal. AVOID ALL SURPRISES.
"It is up to you as the buyer to know all these things before you close the deal," says Ms. Sliwa. "You want to avoid surprises."
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The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. Used under license