BY MARILYN WILSON, THE OTTAWA CITIZEN October 2, 2014As a buyer, you might debate between purchasing a condo in a new development or buying resale. In my experience, many buyers start out thinking one way, yet do a complete turn around after shopping. There is no right or wrong; it’s all about what is right for you.
One advantage an established condominium has over a new development is history. If we define a resale condo as one that has been in existence for five years or more, there are many examples currently listed on the Multiple Listing Service.
After a few years, the condo development has settled into its neighbourhood and it should be easy to see how it fits in. Traffic patterns, shopping, restaurants, and neighbouring dwellings will have settled into place. This makes it easier to envision your lifestyle in the area.
New condos may not benefit from such history and they tend to be in neighbourhoods that are evolving. Will your view be blocked when another highrise goes in? Will the neighbourhood benefit from the increased traffic or get bogged down from lack of parking? With a new development there may be more uncertainty as to how the condo will fit in and how it will meet your lifestyle needs.
Don’t just think about the condo’s lifespan, also consider the condo culture. Are there mostly rental tenants, singles, young marrieds, families or elderly tenants? Usually people look for like-minded residents and it can be easier to get an idea of this if you’re buying resale.
The resale condo will also allow you to assess the condo board by checking out the state of the facilities. Are the common areas and grounds well-kept? Everything will be shiny and new when a condo is just completed, but how will it look in the next five or 10 years? To some extent, this will be determined by the board. The status certificate (the document stating the financial status of a condo) will also have the benefit of 10 years’ experience. Have there been special assessments? Is the reserve fund robust?
One of the downsides of new condos is that they have growing pains in the form of problems that require sorting out. While you can’t predict these issues in advance, if you purchase a resale condo, the chances are they will have already been addressed.
That being said, the quality of construction of a new condo can be assessed from the builder’s previous efforts. Does he have a reputation for quality? Does he address problems promptly?
It’s always possible that there will be major problems with mechanicals, the exterior envelope (especially windows) or other aspects of the construction for both new and resale condos. Repairing such problems is at best an inconvenience to the new owner and at worst a cause of significant aggravation.
Although the dollar cost of such problems is typically covered by the builder, that doesn’t mean there is no cost to the new owner. Such major structure-related issues generally manifest themselves early in the life of a condo development so by the time of resale they have become part of the building’s history.
New condos have many advantages as well. They are up-to-the-minute in design and amenities and may also offer the buyer the option of customizing with upgrades. When you go to sell in 10 years, the age of the facilities and the building itself will be an important factor.
At that time, this new condo and its infrastructure will naturally be more modern than the resale condos on the market now. Of course, upgrades and amenities come at a price that is not always recouped when it comes time to sell. But built-ins and upgrades, if not too dated, can be significant bonuses when buying a resale condo.
There are different advantages to purchasing a resale condo and a new condo. Older condos will suffer from dated esthetics, appliances and facilities; new condos will be shiny and modern in these areas. New condos offer the advantage of being customized to the buyer’s preferences whereas older condos do not.
For some, however, the predictability associated with an established condo development may be more important than the unknown. For others, the excitement of state-of-the-art design and the possible improvement on your investment may be the driving factor.
Marilyn Wilson has been selling real estate for more than 24 years and owns Marilyn Wilson Dream Properties Inc. Brokerage, an Exclusive Affiliate of Christie’s International Real Estate. She can be reached through dreamproperties.com.