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Step by step guide on how to buy a condo for the first time

“Always pick your yard based on your Summer lifetstyle.”


July 18, 2019 - Karl Yeh

Planning to buy a condo? Want to know the exact steps from pre-approval to possession. In this episode, we discuss how to buy a condo for the first time including a step by step guide. We also explore different types of condos, buying resale condos and downsizing to a condo. 

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What we discussed:

Hi everyone. I'm Karl. Welcome to another Homebuyer's School video, a channel where you get the latest strategies, tactics, and tips from home buying experts. And remember, if this is your first time on this channel [00:00:30] and you want to get the latest strategies from the experts, hit the subscription button below. Hit the little notification bell so you don't miss anything.

Today I'm joined by Karen McDonald, community manager with Brookfield Residential. The question we're going to answer is:

How do you buy a condo for the very first time in 2019?

Karen, how do you do that?

Karen McDonald:         

Well, there's a number of things to consider. Anything from where you want to live, to what type of home you want to buy, condo versus townhouse, [00:01:00] and where you are in your life.

But I think first and foremost what you have to do is find out what your budget is. Look for your pre-approval, make sure that you have that all in place. Take the steps to do that before you seriously look.

Because it could mean the difference between owning something that you have to compromise on maybe or looking at something a little bit larger that you can afford.

So knowing your budget is number one. I'd say narrow down your search to a few different communities. [00:01:30] Because of what's available in the market, it can be super overwhelming to look everywhere.

So narrow it down to two and three communities so that you make it easier for yourself rather than looking everywhere, because there's always the what if on what if I can get something cheaper over here?

It could not be the community that you're looking for. So know where you want to be.

Consider your space     

I'd say the next thing would be to really know what you need in your [00:02:00] space. So how you live right now, if you're maybe downsizing:

  • what's the amount of space that you have in your home right now that you use?
  • Think about what you need as far as do I entertain?
  • Do I have visitors?
  • Will I need a third bedroom?

That could be the difference between in fact a condo or a townhouse, having a third bedroom.

So those are the three kind of main points that I would say. I mean, of course, [00:02:30] how you live is the biggest one. That would determine a lot.

Karl Yeh:                       So when we talk about sort of like, I guess it's the lifestyle that you live, right?

Karen McDonald:          Yes, exactly.

Karl Yeh:                      

So if you are planning to maybe have a family in three to five years, maybe a condo isn't the best 

Karen McDonald:         

Yeah. Know what your five-year plan is.

I'd say on average, I'd say the first time home buyer might spend four to five years in their first home because they grow and their family grows or they need more space.

[00:03:00]  So know what your five-year plan is, know how long you intend on staying somewhere, and that there's so many key factors that go into that as well too for the community and how that's going to grow with you as well.

Different types of condos to consider

Karl Yeh:                      

And how about the type of, let's say you do want a condo, other different types of condos that you should take in to consideration?

Karen McDonald:         

Well there would be.

I think the main thing in that it would be that besides the ownership aspect [00:03:30] of it and what you own in a condo, the main things would be whether you have amenities in your condo, in the building, and how that affects again your lifestyle.

I mean, does it have a fitness area? Does it have retail shops? Is there a pool?

Is that something that are must haves for you that you have to have that would make your life wonderful and really easy.

Because that's what condos and town homes do, really. It's the maintenance [00:04:00] free kind of lifestyle, providing you with that.

What do you need in that respect?

And then really as far as the amenities go, how does that affect what you'll be paying on a monthly basis as well too? And will you use it? That's the biggest thing.

Karl Yeh:                      

Yes. Karen, let's say you've decided to buy a condo, right? Now you said obviously pre-approval, get your finances in order. What else? How else do you need prepare?

Karen McDonald:         

Yeah. So you need to know what type of ownership you'll have in your condo. [00:04:30]

So apartment style condos are called conventional, which means that you own the air, the space within the walls, right? So in that, that of course affects what you can do with your condo as well too. You do not own your party walls, you do not own those.

So of course you can't like... it'd be a little bit more detailed if you're going to tear down walls. That's the ownership aspect of it.

Karl Yeh:                       So can you paint your walls?

Karen McDonald:         

You can absolutely. Yeah. And always [00:05:00] check with your condo corporation who manages and who administers the bylaws as well too.

That determines what kind of renovations you can do within your home. Because sometimes you can get it done with approvals as well too.

Karl Yeh:                       Got it.

Karen McDonald:         

But typically in a conventional, you don't own the walls, so you need approval to do any kind of party wall, anything there.

Buying a resale condo

I think what else you have to determine when buying a condo would be is it a resale?

If that's the case, [00:05:30] what are the financials that have been running for the last number of years? How does the budget look? What are the bylaws? Have they changed?

Have condo fees increased? And if they have, by how much and on a yearly basis?

So there's a number of things that you need to take a look at on the resale side of it.

Have there been any special assessments? That's another one as well too.

So a little bit different than buying a new home where typically it's brand [00:06:00] new, you don't have any meeting minutes or any financials other than the initial set forward budget put forward in the condo docs to kind of review and that's given to you automatically at the beginning of your purchase anyways.

Karl Yeh:                       Perfect.

Karen McDonald:         

A couple of things that you need to know for sure before buying a resale versus a new.

Karl Yeh:                       A new one.

Karen McDonald:          Mhm.

Karl Yeh:                      

Remember, if you want to know more about the roles and responsibilities of a condo board, check out our video here and in the description below [00:06:30].

So I guess the question is,

Is a condo a good first home?

Karen McDonald:         

Absolutely. Absolutely.

I would also answer that with another question, in how do you live? How are you living right now? Are you, in a lot of cases, people are downsizing, are you downsizing?

In that case, what do you want your downsized home to look like?

Is it a condo where you feel you have a whole building, you have parkade, you want to be able to take an elevator up.

Single level living, that's also very important for downsizers [00:07:00] as well too, which almost always means an apartment style condo, or if you're looking for a townhouse:

  • what kind of space do you need?
  • Do have visitors that come and have to stay with you that you need to have an extra room for?
  • Do you, like I said before, entertain a lot where you need a larger entertaining, living, kitchen space?
  • What kind of outdoor space do you need?
  • Do you have a dog?
  • Is that going to be accepted?

So there's a number of things to [00:07:30] factor in, but it's all such a personal choice.

You need to examine what your lifestyle is and what you need and actually future promise of what you're hoping it will be as well too, because that will determine everything in your next purchase.

It's such a personal decision.

Downsizing to a condo

Karl Yeh:                      

Well, it's interesting that you mentioned downsizers because it's kind of easy to think, oh, condos first time home buyers, right, it's the stepping stone to a townhouse or a single family home, but sometimes you forget [00:08:00] it could just be downsizing.

And I guess you don't have to be necessarily older seniors to downsize. Like your life situation has changed. Let's say you either got a divorce or maybe you just don't need that much space or whatever the case. Now it's time to you don't really need to have to live in this house, right?

Karen McDonald:         

Yeah. I think we find out a whole lot more as well too is that people are maybe not, you don't want to call it downsizing, they're rightsizing their life.

So that may mean rightsizing your mortgage [00:08:30] or taking into account that, hey, I only use my kitchen, my bedroom and this small living room space.

Do I need the rest of a full basement? Do I need all of this?

So I think it's also about simplifying and determining how you want to live and how you want to spend your free time as well too.

Maybe it's not every Saturday you want to do the yard and you have to do all of your chores in the house and that kind of thing.

So we find a lot of people that are rightsizing their home, making sure that it's enough space [00:09:00] for just how they live.

Karl Yeh:                       I know we mentioned both condos, townhomes and houses before. If you want to know more about the differences between all three, you can check out our video here and down below as well.

But are condos, I would think condos would be cheaper than houses, but I don't think that's always the case.

Karen McDonald:          Well, not always. Again, it's location.

Yeah, that's true. Toronto. It's location.

So if you're of course [00:09:30] buying out in the burbs, you're probably going to get a lot more square footage, a little bit more bang for your buck, if you want to say that compared to downtown, living downtown in a high amenity, high rise kind of condo style apartment, and space of course is going to be a huge factor in that.

If you want 1,200 square feet in an apartment, that'll actually be comparable to a town home, comparable to [00:10:00] maybe even a single family home out in the burbs.

So if that's important to you and that's the lifestyle that you want to live, downtown is going to be it. You're going to pay more for it.

Karl Yeh:                      

Yeah. If you do want that downtown living, you probably will... and if you have only so much of a budget, you probably want to compromise and say, "Well, I can't have that 1,500 square foot condo," right? But if I wanted to, I want to have that space, maybe you can't get that on your price, and you have to 

Karen McDonald:         

Yeah. Well and [00:10:30] I think that's the case with anything that you buy when you have a budget. It's always what the best set of compromises are for you.

What are your negotiables? What are nonnegotiable? What are your must haves?

In that for sure there has to be kind of a little bit of compromise in anything that you're going to buy. If you want more square footage, you want to be in a community with families and where you can grow and, and maybe go from a condo to a single family home, [00:11:00] the burbs are where you're going to find that, right?

Karl Yeh:                       Yeah.

Karen McDonald:         

So it just depends on where you are in life, budget and where do you want to be in five years really.

Step by step guide on buying a condo

Karl Yeh:                      

Let's go just really quickly, step by step, how do you go about buying, right? For example, you've made the decision, "Okay, I am now going to go buy a condo."

So what are the things that you need to do? Obviously go to your bank or your lender, get yourself a pre-approval.

1. Pre-approval

Karen McDonald:          Yeah, preapproval's first.

Karl Yeh:                       Do you need to [00:11:30] hire a realtor right away after that?

2. Consider working with a realtor

Karen McDonald:         

You can. Definitely, if you're looking at the resale market, realtor, you'll need a realtor.

If you want a professional personal advice from somebody that you feel close with that you trust, then outside of your builder representatives, bring them in as well too.

They can give you another perspective on everything.

Yeah, realtor, or not a realtor if you're doing all of the research [00:12:00] online yourself and you want to come in and talk to builders, then that's what we're here for as well.

3. Choosing where to live

But then from there once you've narrowed down the community, it's really finding everything in that community that you can afford and maybe not going above that because I mean your home buying experience, you want it to be a happy one.

So looking at something that's 500,000 when you can afford 300,000 might be a little bit disappointing for you.

Karl Yeh:                       Yeah. You might fall [00:12:30] in love with the $500,000.

Karen McDonald:          Exactly. You'll fall in love with it, and then everything from that point is going to be disappointing because you're falling in love with that $500,000-dollar.

Karl Yeh:                      

But would you also recommend, say you did get pre-approved to say, I don't know, $350, do you necessarily need to go up to that limit?

Karen McDonald:         

A lot of people don't. No. Because I mean that's the bank saying, "Well you know, if you guys don't do anything else, this is what you can afford in your home," right? So of course you hear the term house poor. A lot of people do that because they [00:13:00] want that ultimate goal.

But I mean, I think for a lot of first time home buyers, you have to think about that five-year plan. Where are you going to be?

And do you need to have that huge house right now or that single family house or that [inaudible 00:13:13]? Maybe that's the case.

Maybe it is. And you're willing to do that in order to make the sacrifices and just pay for your mortgage on a monthly basis.

But a lot of the times it's advisable to keep a little bit of cushion there, make it [00:13:30] affordable and maybe not so much above what you're paying right now because who knows what you're going to be doing in the next three to five years?

Karl Yeh:                      

So like let's say you did either get a realtor or come into the builder, what's some of the next steps? So let's say you finally chose, "Okay I've been pre-approved for this amount. I visited a whole bunch of condos, found the community that I think I want to live in." Kind of found maybe the one or two places. So what are the next steps after that?

4. Consider timeframe for moving

Karen McDonald:         

Well, I think [00:14:00] it's all determined about your timeframe for moving in as well too, because a lot of the time builders will have homes that are ready to go and you can move in immediately.

Or if you're building it and you want to make sure that the home is specific to your wants and desires exactly what you want to see, you want the certain kind of countertop or paint or whatever kind of upgrades, then you're going to be building it.

Karen McDonald:         

So the timeframe for that is, typically in a house, eight to 10 months, townhomes [00:14:30] are about the same as well too.

Condos are way different.

If you're buying a pre-sale in a condo, you're looking at at least 18 months out for that. So be prepared for that amount of time.

Yes. And that's likely from construction start. It takes a long time depending on the size of the buildings, of course. Lots of variables there.

But say if you're looking at a townhouse, then you're looking at about eight to 10 months out to build.

5. Purchase agreement

And from there, the builder representative will guide you through all of the steps of how to buy the home.

Typically [00:15:00] it's an agreement that you have. You have a conditional period for that. You have mortgage approval.

Karen McDonald:         

Then after you give your second deposit, you're a firm purchase, you're already a home buyer, you'll go through the design process as well too.

Some builders have designers that they can... and design galleries that they'll send you to and make all of your selections, but the main thing is that the representative will help you through everything so that you're fully aware of the process.

6. Interior design considerations

Karl Yeh:                      

[00:15:30] How much of the design do you actually get to? Because remember what you said is that you own the air. Right? So how much design input do you really get?

Karen McDonald:         

Yes. Well with condos, apartment style, you own the air. With town homes, they're called re-divided, barely blended, which means you own from the dry wall in.

So with anything that you're building, when you go to a building, you'll be able to make the selections on the homes.

Now they'll have typically different [00:16:00] color boards that you can choose from. Some make you stay within the color boards and you can't mix and match. Some have a little bit more flexibility as well too.

So going with the standards and then whatever upgrades might be available to you as well too. That's what you're going to have to select with the builder, with the designer and then go from there. But yes, you can make the selections on your paint, on your floor, on your cabinets, yeah, within the selections that they [00:16:30] offer.

Karl Yeh:                      

Great. Do you have anything else to add in terms of buying a condo for the first time?

Karen McDonald:         

I think it's just important to, again, that five-year plan, knowing where you're going to be and the amount of space that you need, what you really need, and it's not about, "Well I'm going to get this 1,500 square foot apartment because it's grand and it's..."

Do you need that? Do you need that amount of space? Would you use it? And lifestyle is hugely important [00:17:00] when you're looking at anything multifamily. Do you want to be able to lock and leave? Are you going to travel? Do you work a lot? Do you work shift work?

You don't want to have to take care of anything on the outside of the building.

Those are the main things that I think you want to think about along with budget when you're thinking about condos and town homes.

Karl Yeh:                      

If you want to know more about buying a condo for the very first time, we've got a great playlist here for you to view as well as a step by step guide on buying the house for your very first time. Check out this playlist here. And don't forget to subscribe [00:17:30] to keep learning from the experts. We'll catch you in our next video.


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Let us know if you have additional home buying related questions that we can answer by submitting them in the comments section below. 

Homebuyer's School publishes new content weekly so subscribe or check back regularly for the latest information, strategies and tips from home buying experts.  

About Karen McDonald:

This is my 12th year with Brookfield Residential.  I have been involved in 8 sites now with 7 in multi-family and 1 Single Family.  I received my certification as a New Home Sales Professional from PHBIA in 2008. 

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