Buying a Condo
So, you’ve decided that condo ownership sounds right for you – great! But it can be hard to know where to start, particularly for first-time buyers. Before we discuss new and resale condos in London Ontario in more detail, here are some general considerations to get you started:
Step 1: Your Budget When searching Condos for Sale London Ontario MLS
Determining how much you can afford and how much you are willing to spend is a great frst step. In addition to the purchase price of your unit, you should also consider the cost and your ability to pay for things like:
- Your mortgage – remember to take the amount, the term, and the interest rate into
- account, as well as other costs like mortgage insurance
- Common expense fees
- Possible legal or real estate professional fees
- Taxes (including both property tax and land transfer tax)
- Homeowner’s insurance
- Home inspection costs
- Moving costs
- Unexpected additional costs, like special assessments
Whether you are buying a new or existing unit, it is important that you also determine whether you will be responsible for paying directly for your utilities, or whether they are counted as a common expense. That could have a big impact on your monthly utility costs. Perhaps most importantly, you should consider how much you can afford to pay in common expenses fees. To determine how much your common expenses fees might be, you should look at the corporation’s budget and the percentage that the unit owner must contribute to the common expenses, which is often called the “unit factor.” Unit factors are often based on the size of the unit, and it is common for different units to have different factors. The unit factor is expressed as a percentage and can be found in Schedule D of the condominium corporation’s declaration. A unit may have an appealing purchase price, but a high unit factor may mean you are responsible for a large share of the corporation’s common expenses. You should carefully review the unit factor and the corporation’s budget before making a purchase. You should also be aware that it is very difficult to change a unit’s factor – a change requires the approval of the board and at least 90% of all the owners.
Step 2: London Ontario Condos for Sale Finding the right fit
Once you’ve identified your budget, you can start looking for the condo that fits your needs and lifestyle. Here are some important things to consider:
- Location – Make sure that you like the neighbourhood where the condo is located, and consider the proximity of things like grocery stores, parks, schools, parking, or other services.
- Amenities – You should consider which amenities are important to you and which ones you are likely to use. Consider that all the owners must pay for the common elements, regardless of whether you use them or not.
- Units and common elements – Pay close attention to the size, layout, boundaries of your unit and the common elements, because these may be difficult or impossible to change. You should also consider your potential repair and maintenance obligations.
- You may want to get a real estate professional to help you find a condo and to walk you through all the different considerations. In Ontario, real estate salespersons and brokers are specially trained, are covered by consumer deposit insurance, and are governed by professional code of ethics.
There are two types of condos that people can buy:
1 | “New condos” are units that have recently been built and have never been occupied. Many people purchase condominiums while the development is still in the planning stage – usually from plans and typically directly from a condo builder. Here are some considerations for new condos:
- They may be less expensive because you are usually buying the unit based on a plan and before it has been built
- You may have different floor plans or layouts to choose from and you may be able to choose a unit based on its view or location (e.g., if you prefer being on a higher or lower floor)
- You may be able to make specific choices about finishes (e.g., choosing a specific colour or type of flooring, tile, kitchen cabinets, etc.)
- It may take time until you are able to take occupancy or ownership of your unit. It is not uncommon for construction to take several years, and there can sometimes be unforeseen delays (e.g., with obtaining materials needed to complete the buildings, or with obtaining permits or approvals)
- New condos in Ontario are covered by a warranty backed by Tarion under the Ontario New Home Warranties Plan Act. This warranty also covers things like deposit protection, and compensation when you are unable to take occupancy of your unit because of delays
- Condo projects can sometimes be cancelled (e.g., if the developer is unable to secure financing
- for the project, or if not enough units are sold). In these instances, any deposits or other money collected will be refunded
- When you buy a new condo, you are entitled to receive a disclosure statement. If there are material changes to the disclosure statement after you receive it, you can back out of the purchase agreement
- The potential common expenses fees that you may pay are usually estimates based on the prospective budget of the corporation and may not account for all the corporation’s costs once construction is completed
2 | “Resale condos” are units available for sale by the current owner (who typically lives in or rents out the unit). Here are some considerations for resale condos for sale in London Ontario:
- You can see the unit before you buy it, and can take a tour to learn more about the condominium corporation and its common elements
- It may be easier to find a condo corporation and a community that has all the amenities to fit your needs and lifestyle (e.g., using services such as Realtor.ca, or through a real estate professional)
- You can review the condominium corporation’s documents (including its budget, declaration and description, by-laws, and rules) to understand how they operate
- You can carefully review the corporation’s declaration and description to understand what types of changes you can make to the units or common elements
- You may be able to get a better sense of the location and surrounding community for resale units, as they are often located in established areas
- You can and should review the condo corporation’s financial documents, including its budget and reserve fund, before you buy the unit. You can also research whether the corporation has a history of imposing special assessments to pay for unforeseen repairs
- With resale units, you will be able to get a more accurate sense of the common expenses fees you can expect pay, because you can see the history of actual common expenses payments for the unit