How To Buy A Condo In Toronto

Welcome to our guide on how to buy a Condo in Toronto. There are as many tips and tricks as there are different types of units available. Toronto has one of the most vibrant condo markets in the world. It is not an even playing field however. Let us guide you through the minefield that is the Toronto Condo Market.

• Legal Definition Of Condominium
• Tips For Buying Your First Condo
• Learn The Lingo
• Is Buying A Condo in Toronto For Investment A Good Idea?
• Is It A Good Time To Buy A Condo In Toronto?
• What Is The Cooling Off Period?

What is a Condo?

Let’s get a small legal point out of the way. A “Condominium” is a form of ownership. Legally the Real Estate is called an apartment. The correct term is a condominium apartment (or Townhouse, Stacked Town etc). For the sake of expediency we will stick with the vernacular and use “Condo”.

Tips For Buying Your First Condo In Toronto – What You Need To Know

The rules are the same whether you’re buying your first Condo or your fourth. Rule #1 is Use An Agent. Rule #2, see Rule #1. Buying your first condo in Toronto can be daunting. The Canadian Mortgage And Housing Corporation (CMHC) has a comprehensive breakdown.
At Pat Simmonds Real Estate Services we like to make it easy!

First Time Condo Buyer Guide For Toronto

Research The Product

There is a dizzying array of product available on the city’s Skyline. At any one time there are hundreds of
Toronto condos for sale. You will notice that there a handful of “Big Builders” and an army of smaller firms scattered across the GTA. Research the builder’s reputation. Not all buildings are created equally. Neither do all units share the same finishes. Check this list to get a sense of how many units there are.
[UPDATE] The demise of Urbancorp and the litany of unfinished units and debts left behind should act as a word of warning. Always use a professional Realtor.

Learn The Condo Lingo And Terms

North facing, South facing, Den, Square Feet, Cooling System, Locker, Parking, Status Certificate, Parking Membrane, Condo Corp, Condo Board, Maintenance Fees, Financial Health, Common Elements, Wrap Around Balcony, KITEC and all the rest of the terms get thrown around like candy at a kid’s party. It can be confusing. Learn how to read a listing sheet.

Know What You Want Ahead Of Time

What’s the difference between a Condo and a Loft? Is this a choice that suits my lifestyle? Does this building tick all the boxes about where I want to live? There are thousands of Toronto condos for sale at any one time. Just because I don’t need parking now will I need it in the future? What mistakes do I need to avoid? Can I rent it out at a future date?
All these and many more questions need to be asked before you make a choice.

Common Questions About Buying A Condo In Toronto

What Is The Minimum Down Payment Needed To Buy A Condo?

This depends on the point of resale or assignment.
This depends on whether it is an investment property or a primary residence.
Let’s start with the first time buyer of a resale unit.

• For condos with a purchase price less than or equal to $500,000 the minimum down payment is 5%
• For condos with a purchase price greater than $500,000 and less than $1 million, the minimum down payment is 5% of the first $500,000 plus 10% of the remaining balance

Is It Easier To Get A Mortgage For A Condo Than A House?

Because Condos generally costs less than single family houses a buyer doesn’t have to earn as much to qualify. Recent government stress tests (October 2016) have made requirements stricter. Please refer to this post about first time buyers for more general requirements. Because the lending requirements are constantly changing we recommend keeping in touch with your Realtor or lender to keep up to date.

What Are A Condo’s Monthly Fees?

When you choose to buy a condo you accept that there are monthly fees. These fees are payed by everyone in the building calculated on a per square foot basis. Some unit owners pay more depending on the size of their apartment and whether they have a parking unit and or a locker. The fees are used for maintenance, cleaning, garbage disposal, upkeep of the common elements and other projects. Generally, the newer the building the less the fees are. The older the building the greater they become. Older buildings need more upkeep. Monthly Fees are an important element of mortgage qualification, they form part of the carrying costs.

Is It A Good Time To Buy A Condo In Toronto?

It’s a great time to buy a condo in Toronto. The Condo lifestyle has been fully adopted by homeowners in the city. In bound migration figures show clearly that Toronto’s younger population will continue to grow for the immediate future. As the stock of available single family homes continues to remain tight buying a condo in Toronto remains the only option for many newcomers, particularly those that intend to work downtown. The absorption of newly built units remains very strong for both local and overseas investors and buyers.

Is Buying A Condo in Toronto For Investment A Good Idea?

OK, so you’re thinking of buying a condo in Toronto for investment purposes. It could be part of an ongoing investment strategy. Perhaps you’re just worried about how your purchase is going to fare further down the road. What ever the reason you need to either do the market research yourself or trust your Realtor to do it for you. It is a complex world with many moving parts. If you intend to rent out or let your unit you need to be aware of any restrictions that the condo corp and board may have. Please read this post about our property management services. You need to be aware of the tax implications for resale. If you are thinking of buying a condo as an investment from abroad I encourage you to read this article. Investing in Toronto Real Estate has been a safe bet for quite some time now and it is unlikely that there will be a market crash or that we are in a condo bubble.

Do I Need A Real Estate Agent To Buy A Condo?

Yes, Yes, Yes and Yes. You really should use a Realtor to buy a condo in Toronto. For starters, the service fees are written into the seller’s contract. In other words it’s free for the buyer. As Real Estate Agents we make it our business to get inside as many units in every building as is humanly possible every week. We really know our product. Never buy direct from the builder by yourself. Ever. Builder’s forms are notoriously complex and the small print would sink a ship. They are not there to act in your best interest, they are there to act in their own best interest.

How To Find A Great Real Estate Agent In Toronto To Help Me Buy a Condo

Read our blog about how to choose the best Realtor for you. Always ask your family and friends for a recommendation. Certain buildings present different approaches, some buildings need to be avoided altogether. We have extensive notes and access to information with regard to every Condo project in the city. It would be impossible for the average person to keep track. Purchasing a condominium apartment has many separate moving parts least of which is value accrued over time versus increasing maintenance costs. It pays to use a realtor to buy a condo.

Where Is The Best Place To Search For Toronto Condo Listings?

You can easily search for Condo Listings online. Realtor.ca is where most Toronto Condo Buyers find something they like however it is not as up to date as the Toronto MLS. Typically it can take a few hours for the site to scrape new listings and data. It’s easier and faster for you to get us to send you the updates personally. In this market a couple of hours could make all the difference. Besides, it’s easy to get confused with the sheer volume of Condos being bought and sold. Stick to your wants and needs and keep focused. This is what we advise our clients every time. Check out our Toronto Bespoke Real Estate Listings to help you get up to the minute new releases from the Toronto MLS.

Should I Buy A New Or Resale Condo?

If you’re thinking of buying a condo in Toronto this is a question that pops up all the time. There are a number of factors that affect this choice. New builds or Pre Construction apartments can be bought from the plan using a variety of financial tools to secure the purchase. You have to be really sure that what you think you’re buying is what you end up with 2 years later.
Important: HST is a consideration when buying a new condominium apartment.

What Is A Pre-construction Payment Schedule?

A pre construction condo payment schedule is negotiated with the builder. Be aware of closing costs and development costs that may not appear in the initial contract or agreement. As buildings age the maintenance fees increase. Understanding how to balance this offset against your per square foot value is a determining factor in the future viability of your investment. Be aware of terms like Registration, Occupancy, Assignment and others that are often heard when the conversation turns to new or resale condos.

What Is The Cooling Off Period?

All New Build Condos purchased from the builder have a 10 day “Cooling Off Period”. This allows the buyer to cancel any contract in that period.

Will I Lose My View Of The City?

The City of Toronto has a great page to track future development proposals across the city.

Tips For Buying A Condo In Toronto

We hope that you found some value in this “How To Buy A Condo In Toronto Guide”. Obviously it’s only scratching the surface so if you have any further questions please send us an email or give us a call. We’d be happy to help. We love providing professional advice if you’re buying a Condo in Toronto for investment or if you’re buying your first Condo. It’s what we do.