You have heard the horror stories: You parents friend who bought a condo and had to pay $100,000 because it was leaking, your cousin’s boyfriend who unknowingly bought a grow-op, the dude you went to high school with who mortgaged more than he could actually afford and ended up in foreclosure, that guy in the paper who decided he didn’t want to complete on his presale condo and thought he would stage a protest (?). Unfortunately there are people in Vancouver who without question have gotten screwed when they bought a condo. Fortunately there are steps you can take to protect yourself, your money and your investment.
Here are 10 very simple steps to protect yourself from getting screwed.
- Talk to a Mortgage Broker. Before you even open a Real estate paper, look on MLS or step foot in an Open House talk to a mortgage broker or your bank. Figure out what you can afford and what hoops you will need to jump through to get your mortgage (paper work, proof of income, employment letter etc).
- Prepare a list of wants and needs. Your needs are deal breakers, things you can absolutely not live without. Needs are things you would like but are not necessarily deal killers. These lists are not carved in stone. You can go back to them at anytime and make changes.
- Call a Realtor. Of course I was going to say this! However, this is a very important step. A good Realtor will have an intimate knowledge of the buildings in the area you are looking to buy in. They will know the problematic and pro-active buildings; they will know the leakers and where to find value. A good Realtor will also have a network of professionals to help you along the way in ensuring you don’t get screwed (i.e. Home Inspectors, Appraisers, Insurance Brokers etc more on this later).
- When it comes time to buy, don’t get caught up in hype. This means do not get into a multiple offer situation. The easiest way to get screwed is to pay too much for a condo. If you are competing with other buyers this will only increase the eventual sale price.
- Write an air-tight offer. Again, this is where hiring the right Realtor comes into play. An experienced Realtor will be able to write an offer containing clauses to protect you. If you feel your Realtor is not knowledgeable about contracts and clauses have the Realtor’s managing broker or your lawyer look over the contract prior to presenting it to the Seller.
- Hire a professional and qualified Home Inspector! I don’t care if the roof has just been replaced. I don’t even care if the building is only 2 years old. Don’t be cheap; you are spending hundreds of thousands of dollars on a condo, why wouldn’t you pay another $550 for the peace of mind an inspection brings?
- Do your due-diligence. Read the strata documents, ask questions, talk to the property management company who looks after the building-leave no stone unturned
- Hire a Real Estate Lawyer or an experienced Notary Public. They will take care of the conveyancing for you and ensure there are no hiccups along the way. If there are hiccups a good lawyer/notary will take care of things with minimal discomfort.
- Plan your move. Schedule moving trucks, the cable and gas companies, and home insurance far in advance so you are not stressed and forget something when the big day comes.
- 10. Throughout this entire process, relax. Take a deep breath, go for a walk and never lose sight of why you want to buy a condo.
When it comes to buying a condo in Vancouver of course you don’t want to get screwed, who does? When you buy Real Estate you walk a fine line between an emotional purchase (your buying a home!) and a business decision (this is an investment in your financial independence and probably the largest investment you will ever make).
Good luck and, try to have fun.