Buying a Condo in Calgary "101"

[deaftone]

Tried searching to no avail. Maybe we can turn this into a megathread of sorts.

I am beginning the process of purchasing a condo in the beltline section of Calgary. So far I have picked out a general area that works for me, and have focused in on two newer buildings within that zone... I am meeting with the bank tomorrow regarding mortgages.

I'm assuming there are some of y'all who have done this recently. Any tips for a noob? Dealing with the bank, condo mgmt company, etc?

One thing the gent at the bank said was that since I would be putting down 10% as a DP, I would need to pay a monthly insurance fee. Is there a name for this fee?

Ciao

[barmanjay]

*edit*

Point form

Get a pre-approval:
- bank or
- mortgage broker
* lock in your rate for 90 days

Find a realtor (realtor will help you with most of the leg-work in this whole section):
- interview at least 2
* search for properties
* view properties
* feel comfortable with condo fees
* place offer
^ need a deposit (will be part of DP) $5k is good
^ Conditional to:
> site inspection
+ hire a property inspector
> financing final approval
+ forward purchase contract to bank/mortgagebroker for final approval
> satisfactory review of condo docs, rules/bylaws and agm minutes
+ aquire the current condo docs
- reserve fund study/current reserve fund balance
- special assessments?
- bylaws and current AGM minutes
+ hire a condo doc review company to sit down with you to review the condo docs (ask realtor for one)
^ sign off on conditions if satisfied
> if not satisfied, sign the non-waiver notice and start back at search properties again

Find a real estate Lawyer (ask realtor if you don't have one):
- forward all documents of the purchase
- inform bank/mortgage broker who the lawyer is
- get property insurance (your auto insurance provider can help)
* forward insurance policy to lawyer

Utils:
- Electricity
- Gas (unless it's included in condo fees)
- cable/internet (unless...."...)
- phone

Moving:
- contact condo management
* use of elevator
- Moving truck?
- supply friends with pizza and pop, then beer after
- Pimp out condo/become a pimp/pimp out yourself
- Profit???


Costs:

Buyers realtor is paid by the selling realtors commission (split)

RE Lawyer: anywhere from $600-1500 - based on how big your mortgage is
Home Inspector: $350-525
Condo Doc review co: $300-600
Insurance - varies - inquire with your insurance provider

[Redlyne_mr2]

This fee is because your mortgage requires CMHC mortage insurance. It's to protect the banks interest in case they have to forclose on the property. If you walk away the bank still gets their money.

[7thgenvic]

Tons of good guys on Beyond that will help you out. My advice is to see what you can find by yourself and then when you have questions that you cannot answer then use a beyond resident realtor to solve the puzzle.

[ckangarloo]

I think you are talking about CMHC insurance.
See here:

http://www.redflagdeals.com/forums/h...-house-806006/

With 10% down, you will have a 2% premium added to your mortgage. No way around this unless you can get more than 25% down.
I would get a mortgage broker for sure. They will help you greatly in getting the best mortgage for your situation/comfort level.

I can't stress this enough, but if you are serious about a condo; get condo docs and board meeting minutes. Get them looked at someone who knows what to look for. There are companies that specialize in this but names escape me. I would also talk to current owners to see if they know of any big repairs coming down the pipe but haven't been captured in meeting minutes just yet. Don't want to get yourself saddled with a special assessment because of a leaky roof or something.

If I were purchasing right now, I would be sure I could handle payments if interest rates rise to the 20 year historic average of 8.2%. Although I do not foresee interest rates climbing that much anytime soon, they really only have one way to go.

FYI: I myself would not purchase something because of low interest rates while the principal remains inflated.

[bulaian]

first thing i would do is go to a mortgage broker, not the bank. If you shop around to different banks yourself, they'll each run a credit check on you and lower your credit score.

with a broker, they'll only need to run it once, then they'll shop around for you to get the best rates.

[whiskas]

Just finishing up buying my first condo, there's a lot to learn and figure out believe me!

You need to get a pre approval amount for a mortgage, that way you know how much you can afford. Instead of going to a bank I recommend a mortgage broker. Like a realtor, you don't have to pay for their services since it's covered by commission. You fill out one application and they can shop around for the best rate for you. Unlike shopping around yourself which means filling out loads of forms, doing multiple credit checks (which hurts your credit score) and bank rates aren't usually as competitive.

You need a minimum 20% downpayment to be exempt from CMHC insurance.

[prae]

Originally posted by ckangarloo

With 10% down, you will have a 2% premium added to your mortgage. No way around this unless you can get more than 25% down.

It's only 20% now, has been for some time.

[JordanAndrew]

Great thread idea. I'm also going to be looking into getting a condo place in the near future. Any advice that I can get until then will be much appreciated. I'm shooting to get this condo in the next 4-5 months, so I don't think I can lock into the current rates.

Can anybody reccomend a good mortgage broker? I know MIWYFSHOT is a good realtor so he's definitely on top of my list to hire as my realtor. What else do I need?

Also, speaking of realtors, if I was to buy a brand new condo would I still need a realtor? What are the advantages of having a realtor when buying a new condo?

[ckangarloo]

Originally posted by prae


It's only 20% now, has been for some time.

Sorry, my bad. 20% down = no CMHC fees (I guess the lenders gets around this somehow as this chart still shows insurance necessary up to 35% down).
One thing to remember too is that the longer the amortization, the higher your premium. 35 years (yikes!) equals another 0.4% tacked onto your premium.

[R-Audi]

One thing I would suggest.. when you narrow the choices down.. pay for a condo consultant/inspection.. Someone who goes thru all condo documents, meetings, reserve fund etc. If there is the slightest negative condo.. stay the F away.

Im currently dealing with some problems with my condo thats used as a rental.... Consultant mentioned some small problems.. and those small problems turned into large problems..
For that reason I'd be careful with new developments.. older ones have already been established, and had all kinks worked out. (Then again.. most problems wont exist with new buildings)

[whiskas]

I wouldn't bother with an inspection because you only have to check the things that you're on the hook for, the condo board is responsible for everything else.

Anyone can check to make sure the appliances work and the plumbing doesn't leak.

[Ntense_SpecV]

Originally posted by whiskas
I wouldn't bother with an inspection because you only have to check the things that you're on the hook for, the condo board is responsible for everything else.

Anyone can check to make sure the appliances work and the plumbing doesn't leak.

You're assuming it's only for apartment style condos. What about townhouses? There are a ton of different style of houses that fall under a strata.

[barmanjay]

Point form

Get a pre-approval:
- bank or
- mortgage broker
* lock in your rate for 90 days

Find a realtor (realtor will help you with most of the leg-work in this whole section):
- interview at least 2
* search for properties
* view properties
* feel comfortable with condo fees
* place offer
^ need a deposit (will be part of DP) $5k is good
^ Conditional to:
> site inspection
+ hire a property inspector
> financing final approval
+ forward purchase contract to bank/mortgagebroker for final approval
> satisfactory review of condo docs, rules/bylaws and agm minutes
+ aquire the current condo docs
- reserve fund study/current reserve fund balance
- special assessments?
- bylaws and current AGM minutes
+ hire a condo doc review company to sit down with you to review the condo docs (ask realtor for one)
^ sign off on conditions if satisfied
> if not satisfied, sign the non-waiver notice and start back at search properties again

Find a real estate Lawyer (ask realtor if you don't have one):
- forward all documents of the purchase
- inform bank/mortgage broker who the lawyer is
- get property insurance (your auto insurance provider can help)
* forward insurance policy to lawyer

Utils:
- Electricity
- Gas (unless it's included in condo fees)
- cable/internet (unless...."...)
- phone

Moving:
- contact condo management
* use of elevator
- Moving truck?
- supply friends with pizza and pop, then beer after
- Pimp out condo/become a pimp/pimp out yourself
- Profit????

I'll edit and add this to my top post for easy access

[Speed_69]

I'm new to the whole purchasing a property as well.

When purchasing a new property, is it necessary to hire a realtor? and how much comission would they normally charge you?

[ExtraSlow]

This is a great list. I can't stress enough how important the condo documents and a professional review is. With a condo, you aren't just buying real estate, you are entering into a business relationship with the other owners. This means it's doubly important to check out your potential partners and how they run thier end of the business.

[barmanjay]

Originally posted by Speed_69
I'm new to the whole purchasing a property as well.

When purchasing a new property, is it necessary to hire a realtor? and how much comission would they normally charge you?

in a nut shell

using a realtor to buy= free
using to sell = costs

selling realtor splits his commission with the buying realtor

[stevelou]

If anyone needs a mortgage broker, my fiance may be able to help you get an idea of what you can actually afford and what interest rate is available.
You can pm me for more details or can email her at [email protected]. She has access to over 50 lenders.

[broken_legs]

does anyone else think CMHC is a scam?


YOU are the one that pays the insurance, but YOU still end up on the hook if you forclose! Why can't the insurance be for the buyer to pay the bank?

YOU are paying insurance so the BANK gets all of their money.

YOU still have to pay back CMHC if they pay out a huge claim to the BANK.

What a scam.

[extm88]

anyone else realize op is banned lol?
at least i think