Does downsizing from a house to a condo fill you with dread? Follow these tips below or ask me for advice, and it'll be a much smoother process for you.
Canada is displaying few signs of condophobia as the retired and the soon-to-be-so downsize and first-time buyers start their home-ownership lives with purchases of modest suites in downtown areas.
Thirty years ago, fewer than 4% of owner households were condo owners. By 2006, it had reached 11%. Today, the number is approaching 15%, meaning that well over one million Canadian households own a condominium. In the Greater Toronto Area this year, six in 10 new homes sold have been condos. And that trend is likely to continue.
In a way it is a great leap of faith to commit yourself to entering an agreement whereby you are to be financial and social partners with a couple of hundred strangers for the foreseeable future. You will deal with them at the closest of quarters, trusting them to do the right thing so that your property and your wellbeing are secure.
Of course, you rely on neighbours when you occupy a stand-alone house but the shared ownership in a condo takes that reliance - that trust - to a far different level.
Some of the people reading this column will right now be considering selling their house and buying a condo. Here are some things to consider - beyond the usual real estate caveats - before buying and taking up residence in a vertical village:
Those who have never lived in a condo/apartment may wish to rent out their house for a year and test drive a condo rental unit.
Take a long, hard look at the condo building you're thinking of buying in. You can ask for annual financial statements and the status of the reserved fund for study. (We were lucky in that a close friend had lived in our building for three years prior to our buying.)
Take a special tour of the common elements of the building. You own a share of these places and you should know what you own. (An acquaintance in our building who has lived here for more than three years was recently surprised to learn we had a golf practice room.)
Before committing to buying, you may want to sit in the lobby and read a newspaper or magazine while observing the comings and goings of the occupants and getting a sense of what the villagers are like.
Likewise, you should walk (or drive) the neighbourhood for a good, long spell to get the lie of the land.
If the building you are considering is older, there is a strong likelihood that special assessments will be coming to address the structural and decorative effects of aging. Also, some older buildings, like ours, do not have individual meters for hydro and water. So if you go away for the winter, you are in effect subsidizing your neighbours' utility bills for months at a time. We've learned to live with it.
If you opt to buy in a condo under development, be warned that these projects are rarely finished on time. Expect delays and more delays.
This last point also underscores the need for patience in the world of the vertical village. As one friend described his condo, "It's a funny little place with funny little people doing funny little things."
Source: William Hanley, Financial Post