Making an Offer
What to Know Before Making an Offer on a Condo
It’s no secret that buying a condo is a big investment. And with any significant purchase, doing your research is crucial to ensure you won’t be faced with unexpected problems or costs in the future.
While it’s easy to fall in love with a condo unit and picture where you’ll place your favourite couch and eat your favourite meals, what’s just as important to consider in your decision (if not even more important) is what’s outside of that condo’s walls.
To guide you through the condo buying process, I’m sharing four tips to help you make sure you’re making the best decision for your needs.
1 – Know how to review your documents
There can be a pile of documents to review when you get involved with a condo and its strata, but don’t let it be daunting! Instead of trying to sift through every single page, knowing the crucial pages will help you get the most useful information for your decision.
Set aside a few hours to properly review your documents and get a good sense of what it would be like to own a condo and/or live in the building you’re considering.
- I recommend starting with the strata’s Form B (Information Certificate). This is a document that answers frequently asked questions when it comes to that particular strata. It should be reviewed by anyone considering a condo purchase and covers information like strata fees, parking stalls, pending lawsuits, and any challenges that may affect your financial position once your purchase is complete.
- Next, have a read through the AGM (Annual General Meeting) minutes. Every strata package should include two year’s worth of strata meeting notes. This lets you read into the culture of the strata and any recurring or notable themes or problems with the building like water leaks, noisy neighbours, security concerns, etc.
- Take a look at the strata’s financials to see the status of the contingency reserve fund used for emergencies and repairs. Having an adequate reserve fund means the state of your building’s amenities (ie. pool, gym, rooftop) will remain in good shape as the years go on. Draining the reserve fund (or not having one at all) could mean a significant increase in dues for you as a homeowner, or the collection of large, one-time fees (a.k.a. special assessments) to help cover maintenance and repair costs.
- From there, the Depreciation Report will help you understand what big issues are coming up for the strata in the next two years. While this document is about 100 pages on its own, the summary and forecasting sections will provide you with adequate information. This report assesses the physical condition of the property and evaluates the building’s structure, exterior, systems (ie. electrical, plumbing), and shared amenities so you can get a sense for upcoming repairs and maintenance.
2 – Look beyond just your own unit
After taking a walkthrough and reviewing the structural integrity of the unit you’re hoping to buy, what’s beyond those walls can affect your living experience just as much
Take inventory of what’s happening with the roof, elevator(s), parking areas, and neighbours. More information on these can be found in the depreciation report, but try to seek out answers to questions like:
- Are there enough elevators to support the volume of people living in the building? Do they work efficiently or will you spend a long time waiting?
- What are the demographics of the building’s residents? Does this line up with your preferred lifestyle?
- What are the noise levels like from adjacent and overhead neighbours? Is this something you are comfortable dealing with?
- Are adequate measures in place to help ensure building and parkade security?
- When was the roof done? Is it nearing an age where homeowners will need to help financially contribute to its replacement?
The bigger (and more expensive or annoying) issues are likely those that are beyond your own unit, whereas a simple repair in your condo will be a comparatively small expense.
3 – Take a walk through the parking garage
While reviewing the parking garage and where you will store your vehicles, look for cracks that you can stick a loonie into, and look for any signs of water leaking through those cracks. This itself isn’t inherently a bad thing, but it’s important to make sure it’s an issue with plans to be addressed. If there’s no mention of it in any of the reports, meeting notes, or depreciation report, that’s where it can become a potential reg flag and where you should ask the seller for more information.
This is important to make sure you avoid damage to your vehicles and that the value of your property is not negatively affected. Not to mention, it mitigates the risk of extreme problems like damage to the structural integrity of the parking garage.
4 – Check the outside of the building
Once you’ve gotten a feel for the interior living conditions, take a walk around the outside of the building and get a good look at the state of its exterior.
Is management taking care of the common property? Are the grounds being maintained with proper landscaping, snow plowing, or lawn mowing? Are there signs of water damage that haven’t been fixed?
Take note of anything that indicates a spot where maintenance should be happening but isn’t. You can also get a feel for proactive maintenance by checking for bulletin notices of upcoming repairs, cleaning, etc. in the lobby.
Thinking of making an offer on a condo?
Purchasing a condo is no doubt an exciting time – but it’s also a big commitment! Knowing what to look for and what implications it could have on your future is key for making this decision. A few extra hours of research could save you plenty of headache and financial distress down the road.
If you have more questions about what to look for when buying a condo, I’d be happy to chat. Stay tuned for even more tips on making your condo buying experience a smooth one.