|How to Buy a Condo Right!
Buying a Condo? While Ozzie Jurock believes that other types
real estate - such as townhomes, single-family and anything with
dirt under its foundations - appreciates faster than condo
product, this lopsided appreciation curve may change in five to
10 years. Certain areas the Lower Mainland of Vancouver, British
Columbia (finite land base; high level of incoming population) -
as well as elsewhere in North America - continues to expand in
population and existing and contemplated condo units are
swallowed up. Result: upward pressure on prices, especially with
good-quality product with that something extra - a guaranteed
view, proximity to parks and green spaces, amenities, waterfront
etc. and so forth. (For a caveat read
Jurock's Facts by Fax about SPECIFIC AREAS AND SPECIFIC
BUILDINGS NOT TO BUY IN!)
Pre-sale buying or 'buying off the blueprints' can be
tricky. And possibly, a titch costly. You could be buying into
the marketing sizzle and not the steak. Remember: In
Canada new suites are liable to GST, resales are not; the more
elaborate the building amenities, the more expenses incurred in
the common-area fees. That great pool or suave health club all
come with an ongoing price. If you're not using these
facilities, why pay for someone else's pleasure?
Before going out...take a spec sheet and make notes. Compare the
various potential buys:
you've decided to make an offer and you've settled on price, ask
Parking spaces? How many?
Bathrooms? How big and how many? Two full bathrooms is a
large selling point.
Fireplace? Is it gas or wood-burning? (In an urban
environment, wood-burning fireplaces are hard to fuel, messy
to maintain and likely due to be banned as air-pollution
How large is it? Does the square footage on the list sheet
actually jive with the physical property? (It's remarkable
how many condos experience a slight 'shrinkage' between the
pre-sale promo and the actual layout.)
Amenities; does it have a pool, health club, bicycle storage
lockers etc.? Will you be actually using them?
What are the common-area costs? Are they realistic or can
you expect them to rise?
Is there a view? Is it guaranteed? If so, make sure; check
with City Hall and check the appropriate zoning etc. Again,
it's remarkable how many 'eternal views' become DOA a few
years after the sale.
Who built it? What's his or her reputation? Can you get
references from those who bought from the same
developer/builder before? It seems all pre-sales tout
"luxury", "top-quality" "exquisite finishing" etc. However,
your interpretation of these fine-sounding phrases may be
diametrically opposed to the developer's lexicon. Find out.
What is the foreign-investor component of the building or
the pre-sale mix? Too much off-shore can sometimes signal a
risk. Such foreign investors are usually most pragmatic and
more willing to take a loss than an owner/occupier. If too
many investors bail for whatever reason, the building will
acquire the tarnish of a 'bad' project and prices will be
Security? Car parks, common areas etc. Electronic 'card
keys' are vastly preferable to common cut keys; if someone
loses the plastic, the system can be easily coded to exclude
the lost card from entry. Patio and first-floor condos are
problematic for break-ins. Ditto for units close to
stairwells (all the quicker to escape, my dear).
Higher is not always better. Marketers love to tell you that
the higher the unit sits in the building, the better the
view and hence, the better the resale value etc. Sure, but
only to a degree. Once you get beyond a certain height, the
views are pretty much the same, that premium of as much as
$2,000 to $14,000 per floor as the identical suite climbs
higher in the building simply doesn't warrant the extra
cost. (Assuming, of course, the lower suites' view isn't
being obstructed by an intervening structure.) A few years
down the line when it comes to the resale, it'll be
difficult to get that premium back, especially if your suite
is competing with a cheaper but identical suite lower down.
Buying higher up isn't necessarily the best way to get high
copy of the strata's contingency fund and financials. Have
there been any strange and unusual expenses? Is the
contingency (rainy day) fund adequate?
copy of the minutes of strata council for the last six
months. If there's any 'dirty laundry' or duking it out,
they'll be aired at those meetings. Papers in hand, talk to
an existing owner, the building manager and/or the
strata-council president. They'll tell you what's wrong and