When people are Buying and Selling Condominiums, the realization of what exactly they are purchasing and buying into becomes secondary at times as they get caught up in the frenzy of the search for the perfect view, or the one that has amenities that they want or have seen in an Ad.
There are some Key Differences that should be considered when looking between Residential Homes and Condominiums:
1. Real Estate Agents: Does your agent know what is involved in a Condominium Purchase? Ask them how much experience and/or education they have invested in related to Condominiums and related topics.
2. Searches: Residential Searches can also include Housing Associations which are similar to Freehold Condominium, but have different rules and By-Laws as opposed to Regular Condominiums. *the Key is ensuring your Realtor knows the difference.
3. Attorney: when researching to hire an attorney, your Real Estate Agent can provide you a list that they or their office have worked with. It’s a good practice to inquire which ones have had experience in reviewing Status Certificates and understanding Reserve Funds.
4. Comparing Condominiums should include what the fee is in comparison to the features/benefits of the items covered by it. (ie. Water/Gym/Pool/Common Grounds)
5. How old the Condominium building is. This can weigh into the review of the Reserve Fund, and how recently the Reserve Fund Study was completed.
*note: Using a Home Inspector is always recommended, but Agents should ensure their clients are aware that reviewing common property that is enclosed/ locked up is not a requirement. The Inspection should cover the interior of the Unit being purchased and a cursory review of the building exterior for information purposes only.
Part of the Agent’s responsibility also lies in advising their client’s exactly what is included in the Condominium Fees, and compare against other Condominium Corporations in regards to common element use, and overall experience. They should also be able to assist with reviewing:
1. Fees vs. Fees: are you comparing like properties? Is one a newer condo? (ie. Less than 3 years) and if the condo is older (ie. 15-20 years) how healthy is the Reserve Fund?
2. Reserve Fund: When the Attorney reviews the documents, and needs some clarity or details the agent should offer to inquire on their behalf. (This also provides the Agent with the tools to be better advised for their Client’s needs).
3. When searching for an Attorney, like searching for a Real Estate Agent, the Client should inquire if they have experience with Condominium Purchases and how comfortable are they reviewing the Reserve Fund along with the By-Laws?
The more the Real Estate Agent can support the process, the less surprises and last minute stresses will occur. As with any Residential Real Estate transaction, due diligence is critical but is definitely key in ensuring that one’s client (or yourself!) is fully aware of what is entailed when you purchase into a Condominium Corporation.
Overall, the role of the Real Estate Agent shouldn’t be simply to process the sale of the unit, but also to support all the parties as they are the one common factor during the entire transaction. The ability of the Agent to provide assistance and valuable resources and information creates an environment of consistency and professionalism.
With the ever changing real estate market continually moving towards a great amount of Condominium projects and Re-Sales, the Real Estate Community along with those that participate in the business is quickly becoming a core group that needs to be able to rely on each other for qualified assistance and accurate and timely business practices.
Contact Terra Firma Real Estate at 613-721-7434 for more information.