Save me from buying this crappy condo

Reading the latest tweet from a smart realtor Andrew LaFleur I got inspired to write about doing due dilligence on a resale condos.

We know it's important to review the status certificate and condo by-laws, but very few people take the time to review the condo board minutes. From my experience, reading the condo board minutes will give you valuable information on the building state of repair and how the condo board operates. This information will could save you a tremendous amount of money and stress.

So what do you look for when reviewing the condo board minutes?

Thomas Beyer, a specialist in doing condo conversions in Alberta, gives great advice:



Look for:

1. Discussion of major items in minutes of the condo board meetings, i.e. water leaks, new roof, bed bugs, plumbing issues, structural issues, windows, rotten balconies etc.
   
2. Potential cash-calls/special assessments and why
   
3. Reserve fund health vs. age of building (get help with an experienced property manager or lawyer on this)
4. If a newer building: discussion of significant maintenance fee increases
5. If a newer building: any disputes with developer or pending Tarion issues
   
6. Any special meetings outside the usually annual AGM for major decisions
   
7. Any budgeted / future major expenditures and anticipation of funding these same expenditures through reserve fund or special assessment (i.e. you think it is a good deal .. but in 2 months you're on the hook for a $35,000 special assessment to bring reserve fund current and fix all windows and a new roof )

Keep your eyes open

Would Toronto be more safer with no last call?

Night life in Toronto is a hundreds of million of dollars industry. If Toronto extended last call until 5a or staggering last calls over a longer period of time for certain neighborhoods, this may do two things:

• People will not be as drunk. Imagine that their is no mad dash to the bar before 2a. You wouldn't over consume by buying too much before cut off
• City will be safer: There won't be a mad dash of people on the streets looking for their cars or fighting for cabs. When you mix too many drunks in a small area nothing good could happen. By extending last call may cause people to leave at different times so club/lounge closings are more orderly

Toronto would definitely become more profitable and welcoming place for people to visit.

REal Experts Condo Market Analysis

Picture from Urban Toronto


Project Developer District #Units Sold $/PSF
Five Condos Graywood & Mod Downtown Core 493 320 $603
Tango Concord Adex Sheppard Corridor 384 218 $458
One Valhalla Edilcan Group Etobicoke 216 163 $403
King Edward Dundee & Skyline Downtown Core 145 143 $729
Four Seasons Catalia Richmond Hill 201 55 $402

In June there were 1,764 sales (down 0.9% from last year)
Year to Date 2010 - 9,934 sales (up 142% from last year)
Unsold Inventory - 14,498 units (down 15.6% last year)

Observations

• Commonality -Top 5 developers are active in courting the brokerage community
• Lots of sites competing for buyers.
• Developers continuing to buy sites at top dollar (e.g. Freed Developments purchases 2.4 acre site at 578 & 580 Front Street West (on the corner of Bathurst) for $42 million!)
• Toronto is now largest Hi-Rise Market in North America
• Prices are up from last year (2010 Avg $486 psf vs 2009 $430/psf - this stat is an average and really means nothing - have to see what's going on in your local market)
• Banks still tight on construction financing, most projects still require 20% down for the majority of their purchases
  

Conclusions

• 29+ launches set for fall, REal Experts expects to see sales fall and incentives to go up
  

Canada is Just a Rounding Error when Compared to the US

Reading the latest news on foreclosures from Lender's Processing Services, I'm amazed at the size of the US housing collapse when comparing it to Canada (via the Canadian Bankers Association).


US - 7,041,987 loans are either delinquent or in foreclosure
Canada - There are a TOTAL of 4,064,446 loans

US - 2,473,067 mortgages are more than 90 days delinquent
Canada - 17,090 mortgages are more than 90 days delinquent (or 0.69% of the total US mortgages more than 90 days delinquent and 0.42% of the total amount of Canadian mortgages )

Hence, Canada is just a rounding error when compared to US