MaLuda Hussaini – Is Provide Commercial & Residential Vancouver Condos for Sale and the Surrounding Area

Hello everyone!  If you are new to my website , I am a realtor in the Vancouver area and I will be speaking to some common topics I have come across with clients Buy or Sale condos in Vancouver. 

Vancouver Condos For Sale 🙂

Today I will be talking about first time purchasers for “attached” properties or stratified as we know them. 

The first thing you need to know when you’re thinking about buying a stratified unit but what is this? 

Well, that seems self-explanatory, why am I bringing this up in the top five most important things you should know? That is because this is something that a lot of people don’t quite fully understand. Strata is a style of ownership not a style of building.

A lot of people, when you tell them you’re buying a strata unit, they’re going to of course think of the high rise apartments in downtown cities like Toronto, Vancouver, Montreal, and yes, those are strata units, but attached units are a type of ownership not a style of building, so you can have a strata unit in all different shapes and sizes. 

But you can even have single family homes, for example, like individual houses, the entire cul-de-sac or a crescent could be stratified.

Now common ownership means?

That you have common ownership over the entire building or area that’s condominiumized and then you have exclusive access to a specific portion of it.

So thinking of those high-rise apartments, your specific unit, you’ve got exclusive access to it, but the entire building you own is in common with the rest of the owners which also means you’ve got common responsibility for that through your condo fees.

We’re going to get to condo fees in just one second but what you need to know when you’re buying a stratified unit is that is a style of ownership, not a type of building.

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MaLuda Hussaini
Vancouver condos for sale – Apartments for sale in Vancouver
Condos for sale downtown Vancouver
778-316-4663
Looking for a free estimate? contact us —> click here

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Another big difference between buying a strata unit and buying a house is what you’re qualified to spend.

I’ve had buyers come up to me and say, “Hey MaLuda, I’ve been pre-qualified to spend $300,000, I’d like to buy a condo.

So let’s set the max budget at $300,000.” but that’s not going to work because condo fees actually count as part of your payments when you’re buying a condo.

So when you’re qualifying for your mortgage, they’re going to do what’s called your debt service ratio. For those that don’t know, your debt service ratio is what your cost of living is going to be versus how much you make. And there’s a certain percentage of your income that can go to living expenses.

So your mortgage payments, your property taxes, and generally your heat are included in what’s called your gross debt service ratios.

And then you have total debt service ratios.

So that’s your payments and any outstanding things like student loans or credit card bills that you have to pay.

Well, when you’re buying a condo, those condo fees get added into your gross debt service ratios, those can exceed 38% of your income, and your total debt service ratio can’t exceed 44% of your income.

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MaLuda Hussaini
Vancouver condos for sale – Apartments for sale in Vancouver
Condos for sale downtown Vancouver
778-316-4663
Looking for a free estimate? contact us —> click here

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So let’s go through a quick example.

We’ve got Connie, The Condo Buyer. She’s got a $65,000 a year income, she’s got 5% down and no debts. If she was qualifying to buy a single family home, she’d be able to spend $318,000 today.

But if she’s buying a condo with $200/month condo fees, she’s now all only qualified to spend $300,000.

And if you take those condo fees and make them $450, now she’s only qualified to spend $278,000.

For every $100 in condo fees, it drops your maximum purchase price by about 3%.

So when you’re looking to buy a condo, make sure that when you do a pre-approval, the condo fees that you’re expected to be on the property, are included as part of your qualification, because that’s going to dramatically change what you’re qualified for.

And then when you’re looking at condos, if you see really high condo fees, that’s going to reduce the total maximum purchase price that you can offer the seller.

I think everyone hates paying condo fees, and that’s understandable. As we just talked about, it reduces how much you can spend on a condo because it counts on your debt service ratio.

As well, it’s an additional monthly expense that you are going to have to pay in addition to your mortgage, your property taxes, and everything else that goes along with home ownership. 

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MaLuda Hussaini
Vancouver condos for sale – Apartments for sale in Vancouver
Condos for sale downtown Vancouver
778-316-4663
Looking for a free estimate? contact us —> click here

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Well, let’s talk about what condo fees cover and some of the advantages of paying those condo fees.

Now every building is going to be different. But usually, you’re going to see condo fees cover things like maintenance of the common areas, some utilities, and building management.  That’s the advantage of strata units, you don’t have to deal with the maintenance of the exterior space. 

Another advantage of startas is the reserve/contingency fund – This is a pool of money that you’re putting away each and every single month to future repairs and renovations that are going to be needed on that property.

Now as a homeowner, people should be putting away a set amount of money each and every single month for repairs, 1 or 2% is kind of a good rule to work by.

But a lot of people don’t do that when they own a single-family home. And how many times you’ve heard of a major malfunction in a house like a furnace or a plumbing problem, and now the person’s scrambling because they have to come up with 4 or $5,000 to fix that and they didn’t have any money put away for that.

A big advantage of buying a condo versus buying a house – is the fact that you have somebody that’s going to do most of your maintenance and a lot of renovations. You don’t have to worry about cutting grass, shovelling snow, replacing the roof, those types of things, that’s going to get covered by somebody else in your con fees, pay those condo fees, boom, it’s taken care of, but it also does limit some of the flexibility.

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MaLuda Hussaini
Vancouver condos for sale – Apartments for sale in Vancouver
Condos for sale downtown Vancouver
778-316-4663
Looking for a free estimate? contact us —> click here

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So, for example, you want to change the front door on your condo?

You might not be able to do that. That actually might be the responsibility of the condo association and it might be their door even, not yours.

You want to do some renovations, or move a wall?

That also might not be possible without prior approval from the condo board because there could be HVAC systems, wiring or plumbing for the rest of the units in that wall, so you might not be able to move that.

When you buy a condo, make sure that you know what is your responsibility and what is the condo board’s responsibility and what approvals you’re going to need if you’d like to do any repairs or renovations.

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This is an important part of buying a condo in Vancouver.

When you’re buying a property, generally, you’re going to make what’s called a conditional offer.

So you’re saying you’ll buy this property as long as, I get my financing and my home inspection is good.

When you’re buying a condo, there’s an additional step because buying a condo isn’t just buying a property, you’re basically buying into a corporation. And you would want to know what kind of financial shape that corporation is in, and also what are the rules of that corporation, same thing applies to a condo.

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This is why you as a prospective buyer would read through the documents of the strata corporation. 

This is a stack of documents that’s going to talk about what the bylaws of the condo are, what their budget is, what they’re spending money on, what the meeting minutes for the last couple of meetings, plus the annual general meeting, have talked about, how much money is in that reserve fund, what their insurance policy covers, as well as things like bylaws for pets and what is your responsibility and what is the condo responsibility.

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You want to know all of that information before making the decision to buy a condo.

So get that as part of your offer, sellers will provide that to you, then review it yourself, and also maybe have somebody like a lawyer look at that.

The last thing you want is that the reserve fund is deficient, for example, they have to repair something and you will have a big levy to pay into. 

When that happens, they don’t have enough money in the reserve fund, they divide up the cost of that repair by the number of owners and they hand you a bill, that could be thousands of dollars that you didn’t anticipate.

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So make sure when you buy a strata that the reserve fund is adequate for the size of the strata. 

Also, if you’ve got a pet, make sure that pets are allowed or your type of pet is allowed in that condo.

Some stratas have pet restrictions or don’t allow pets at all. Knowing this, and knowing the documents inside and out, reviewing this, is probably the most important thing you need to do when you’re buying into a strata.

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MaLuda Hussaini
Vancouver condos for sale – Apartments for sale in Vancouver
Condos for sale downtown Vancouver
778-316-4663
Looking for a free estimate? contact us —> click here

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There you have it, that’s my top things you need to know when you are buying into a strata. And if you’re out buying a condo this year and you would like me to put you in touch with a fantastic real estate agent in your area, got my contact information below, send me an email and I’ll be happy to put you in touch with an awesome agent in your area that’s going to find you that perfect condo.

But if you’re a first-time home buyer, you’ve probably got some more first-time home buyer questions.

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Author: Maluda Hussaini

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