Sometimes you may walk away from a condo that needs some renovations because you are already spending your hard earned savings on the down payment and closing costs. To help you avoid losing out on a property for this reason, here is an article from Igor Geshelin: one of our trusted partners as a Mortgage Market Professional with The Bentley Group at Premiere Mortgage Centre. The Bentley Group is Premiere’s top producing Team in Atlantic Canada, and Premiere has recently had the distinct honour of being awarded “Mortgage Brokerage of the Year” at the CMP Canadian Mortgage Awards. Here is what Igor has to say:
You’ve found the perfect condo. The location is ideal, the price is in your budget, the layout is perfect and it’s just the right amount of square feet for you and your favorite things. But the kitchen cabinets look like someone made them out of a station wagon’s wood grain panels, and your feet are submerged ankle deep in a sea of what you sincerely hope is carpet.
Updating these items to modern day standards is going to set you back a few thousand dollars, and as you are about to purchase a property, the last thing that you need is another expense on top of your down payment, 1.5% Deed Transfer Tax (some may call it a government money grab), solicitor fees, etc. Not to worry, there is a mortgage product just for you: Purchase Plus Improvements is here to save the day.
Designed specifically for scenarios where some renovations are required to be completed to a property at the time of purchase, this program simply requires up front quotes for the intended work to be submitted for lender approval at the time of securing your mortgage for the purchase. The renovation funds are held in trust until the work is complete, and then released directly to you to pay the contractors, or reimburse yourself if you have already paid for the work out of pocket in the meantime.
This is a spectacular way of including value-add property improvements directly into the mortgage, and especially at today’s historically low rates this is by far the lowest-cost approach to financing a renovation project. If you were to wait a year after purchasing and pay for these items on your credit card or a line of credit, your cost would be substantially higher. To put it in perspective, adding an extra $10,000 worth of improvements to your mortgage today would only be an additional $21/month. It doesn’t’ get much better than that, and your kitchen will be transformed into an Ikea showroom in no time!
If you have any questions about Purchase Plus Improvements, or any other mortgage questions for that matter, don’t hesitate to contact Igor at email@example.com or call: 902-441-6493.
As always if you are looking to buy or sell a condo feel free to contact us.
Halifax condo market update – April 2013
Figure 1 – All data based on MLS® statistics for areas 1 – 40 which encompass all of HRM
Figure 2 – All data based on MLS® statistics for areas 1 – 40 which encompass all of HRM
Again in April we see a similar trend with condo sales as we have seen with home sales for Halifax in general. Number of Sales continue to drop compared to previous years. Average price stayed virtually the same as 2012 at 260K but increased by 11% compared to 2011. Expect this trend to continue through the spring and early summer.
If you would like more information on the Halifax Condo market you can always contact us. firstname.lastname@example.org
The following are a few points to consider before making a condo purchase. Be aware that this is by no means an exhaustive list of the items you will need to be on top of when looking for and buying a condo, but it will get you started.
1. Location- As we all know in real estate it’s all about ‘location, location, location’ this is true for condos too, on a couple of different levels. The location of a condo building should make sense to you, do you like the hustle and bustle of living right downtown with the energy of the city right outside your door? Or do you prefer to live in a calm, quiet neighbourhood where you can sit on your balcony and relax? Remember, condos don’t appreciate overnight, you should plan to live in this one for the next five years at least. The other location we need to look at is where in the building your new condo is going to be. If you really want a corner unit, but there another unit in the building that has a new kitchen but with a less favourable view and the asking price is similar, which will you choose? Condos in a building are similar to houses on a street, the house at the end of the cul-de-sac or the one that backs onto greenspace will hold value over others one the same street. Similarly so, a condo with a significantly better view or a corner unit (more windows) will hold higher value over units with obstructed views, even if they have nice new kitchens. Remember, you can always renovate your kitchen, when you have saved up the additional capital, you cannot change your condo’s location in the building.
2. Amenities- Does the building you are considering provide the amenities you want and need? Or are there some that you can live without? Some amenities that are great to have but can increase condo fees are things like a pool which is maintenance heavy, a live-in superintendent whereas they live in a unit owned by the condo corp. One thing that can be a necessary item that not all buildings have is parking, do you need parking or will you in the future? Another thing to consider is a parking spot included with your condo or do you have to lease one from the building? Even if you don’t need parking now, not having it might negatively affect your sale price down the road when considered against other condos that include parking.
3. Building Age and Condition- Age is an interesting question, most people are excited about investing in pre-construction and moving into an all new building. This is great but it can require patience, constructing a big new building can take years and there can be delays that extend your move-in date by as much as six months or even a year later. On the flip side some older buildings can have aging infrastructure such as plumbing, windows or a roof that needs to be replaced, this is not a problem if the condo corporation has been saving a portion of their fees into a reserve fund to replace them when the time comes.
Check back here for more tips and updates on condo buying and selling or sign up for our newsletter for condo news direct to your inbox and of course, contact us directly if you have any specific questions.