Planning to buy a condo for the first time? Where do you begin? What questions should you ask? In this episode, we discuss the key things to consider when buying a condo such as where to get information, who to talk to for advice, why a reserve fund study essential and top questions to ask before buying.
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Hi, everyone, welcome to another edition of Homebuyer's School. Today I'm joined by Karen McDonald, Community Manager with Brookfield Residential, and today the question we're gonna answer is:
Where do I get information before buying a condo?
So, Karen, where are some places that I can get myself educated on buying a condo and all the related facets to that?
Well, all the information that you would need in buying a condo, as far [00:01:00] as how it's operated, would be in your condominium documentation.
Karl Yeh: Okay.
So, when you're buying a resale home, the present owner should really provide you with all of that information.
Should they not have it available to them, you can always go to the management company and request it.
A lot of the times, it comes with a little bit of admin fee that you pay-
Karl Yeh: Okay.
Karen McDonald: In order to get copies of that.
Karl Yeh: Yup.
In a new build, the builders should be providing you with all the documentation in order to review before [00:01:30] you end up buying your home.
So, all of that information should be readily available to you before you firm up the purchase of your home.
Karl Yeh: Yeah. And all of that, you can probably do online?
Yes. You can do the requests for it from the management company online. Yeah.
Same thing with financial documents, bylaws, it should be all in the same group.
Karen McDonald: Yes. It will be.
What is a reserve fund study and how does it relate to buying a condo?
Awesome. I've always been hearing about the reserve fund study. What is that?
The reserve fund study is ... it's analyzing with [00:02:00] the costs are for the reserve fund for future expenses.
From the point of registration of the condo plan in a new build, the reserve fund study has to be done within a two year period. That's in a new build. Then, every five years after that.
In a resale, you would have access to information on what the last reserve fund study would be because it has to be accompanied by a written report.
So, every five [00:02:30] years in a resale, a reserve fund study has to be done to ensure that there is enough allocated to that reserve fund to maintain future expenses.
Is there a minimum that that reserve fund has to have, based on, say, the cost of the building?
Well, I would say that there's not absolute minimum. It would all depend on how much common area there is. What the expenses would be to repair that.
I would say that a lot of times in a resale, where you're buying [00:03:00] maybe a refurb, something like that, the suggested about would be at least $50,000 into that reserve fund on a yearly basis.
But, again, depending on the size of the development, it can vary.
If it's a huge development, you might be looking at more you want in that reserve fund.
Is there any other pockets or places of information I can go to before I decide to buy my condo?
Karen McDonald: Absolutely. You have a number of resources, likely, at your fingertips.
Karl Yeh: [00:03:30] Yeah.
- Talk to the professionals. Talk to your mortgage broker.
- Talk to your realtor.
- Talk to your builder representatives.
- They are all the professionals within the industry.
They will have all of the information that you need to make this huge decision before you buy your new home.
Top questions to ask before buying a condo
Perfect. What are some, let's say if I had to ask the top three questions before I decide to buy a condo, what would that be?
I would say buy the condo that fits your lifestyle.
If you're [00:04:00] buying an apartment, is it amenities that are in there, town home, just the maintenance-free aspect of it.
- Where are you gonna see yourself in 3-5 years?
- What are you gonna be doing?
- Is it gonna fit your lifestyle for the next 3-5 years?
- Where are you gonna be?
- From there, is the price comparable to what's in the area?
You have to shop around.
Karl Yeh: Yeah.
You have to make sure that it's comparable to everything [00:04:30] within the next three communities. You should be paying fair value for your new home.
Thank you very much, Karen. Thank you very much for joining us and we'll catch you next time.
So of our other videos that you may be interested in watching related to this topic are:
Let us know if you have additional condo questions or home buying questions that we can answer by submitting them in the comments section below.
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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.