The Guide to Condo Ownership
The process of buying a condo in Toronto is romanticized. Movies, TV, and commercials, while enticing you into the process, fail to illustrate the grueling effort required to make your dream a reality.
Most first time homebuyers in Toronto are condo buyers. The lower entry price point of a condominum, combined with the smaller footprint for new families, and maintenance-free lifestyle, all create a nearly idealic situation for the first time homeowner.
With many condominium buildings in Toronto, and over 587,000 Condominium Units registered in Ontario, its hard to feel confident you’re making the right decision. It’s important to get it right the first time. Immediately selling a condo after purchasing carries with it costly legal fees, commissions, and the almost certainty of financial loss.
The Condo Buying Process – A Brief Overview
We’ve put together a brief overview of the Condominium Buying process in Toronto. The Guide to Buying a Condo in Toronto can help even the most hesitant buyer navigate challenging waters. Here’s what to look for when buying a condo in Toronto:
1. The Search
Before looking for the perfect condominium unit, begin looking for the right condominium building. Before you commit to sharing your front door with hundreds of other residents, its important to know who you’re living with, and what you’re living in.
Start by narrowing your search to your specific area of interest. You can further refine your search to points of interest. Is it close to public transit? Where is the nearest Grocery Store/Drugstore/Hospital? Are there commercial tenants in the main level, helping reduce the amount of outdoor foot-travel in winter?
Once you’ve found a few desirable buildings, it’s important to get a background. Here’s what you should be looking for:
- Who is the builder, and what is their reputation in Toronto?
- What are the amenities available in the Condominium?
- Is Access an issue?
- Where does the parking Garage Face? (Important in Downton Toronto with an exorbitant amount of one-way streets)
- Have there been any recent news articles concerning the Building? (Lawsuits, criminal investigations).
2. The Status Certificate
The Status Certificate is a legal document prepared by the Condominium Management Company, giving a “snapshot” of the current state of affairs. We’ve put together a great guide to understanding Status Certificates in Ontario. If you’ve never seen one or interacted with one, check out the article.
It’s Important to note that Status Certificates are prepared on a Per-Unit Basis, specific to the unit requested. However, in an effort to speed up the selling process, certificates are typically prepared before the unit is listed. Ask your REALTOR® to request a status certificate from an already listed unit, even if its not the unit you’re considering purchasing. The Status certificate will contain general information about the building.
Make sure you take a look at the following items in the Status Certificate. If you see warning signs, it might be a good idea to start looking for other buildings.
- What is the financial health of the building? Have there been any recent major repairs or faults?
- Is the reserve fund healthy and growing? Have there been any recent special assessments levied against unit owners?
- What is the ratio of owners to renters? Are you potentially purchasing into a rental-building? What might the neighbors look like?
- Is parking owned or assigned? Are there storage lockers, and how large are they ? (This can affect the value of the unit you’re purchasing).
- Are there any by-laws or pet restrictions that could warrant passing on the building altogether?
3. The Unit
If you’ve done the process right, you likely haven’t even started to look for the desired unit in the building. The best advice here is to visit, visit, visit! See every unit available in the building, if possible. Floor plans, bedroom sizes, exposures, and elevator access can vary in condominium buildings.
Our tip? Make sure to see units smaller and larger than you might be looking for. You might find a different floor plan works better with your family.
Always see the unit at different times of day – exposures, reflections, and views can change depending on where the sun is.
It’s a great idea to have the unit inspected to ensure there isn’t a big problem you or the seller might have missed.
The Cost of Buying a Condo in Toronto
It’s hard to estimate how much Buying a Condo will cost. The purchase price, mortgage size, and closing costs all factor into the amount required on the date of closing.
Here are potential costs to keep in mind:
- Land Transfer Tax (Even if you’re a first-time homebuyer, there might be some additional payable)
- Status Certificate (At times, it can be the buyer’s responsibility. These are $100)
- Legal Fees – Typically, in Toronto, Legal Fees can be anywhere from $800 to $2,000 to purchase a Condo.
- Others – Title Insurance, searches, etc.
When you work with ReaLawState, you’re paired with an agent and a lawyer from day 1 of your home search journey. All legal fees are covered by the commissions paid by the seller, contingent on closing. Review of status certificates, answering legal questions, and assistance with closing are all services provided and included at our Brokerage. The Process of buying a condo can be confusing, but we’re here to help!
Have questions about the Condominium Buying Process, want to start your search, or get in touch? Contact ReaLawState for a free, no obligation consultation.