Buyers FAQ

Buyers FAQ

Buying a condo, or any property, comes with a lot of doubts. We’ve taken the time to answer some of the most common questions we get asked.


Most people who buy a condo take ownership through the Land Registry System. Just before the day of closing, you transfer money to your lawyer and if you need additional funds via a mortgage, your lawyer will register your ownership of the property and the interest of the mortgage lender.

An Assignment means that you are buying a ‘right’ to own a condo that is not in the Land Registry System. Usually the condo has not been built or it is not ready for occupancy and the building has not been registered. This ‘right’ is just a paper transaction and not the transfer of the actual property. The closing of the Assignment occurs BEFORE the condo is registered. The individual who buys the ‘right’ will eventually close and register their ownership of the condo at some later date.

The number of Assignment transactions is growing rapidly. For sellers who bought a new condo from plans several years earlier and whose plans have changed, this is an opportunity to sell before they have to get a mortgage and incur additional closing costs such as that dreaded, double Land Transfer Tax. For buyers who want a brand new condo without having to wait years for construction to finish, or who can not find what they want in the resale market, it represents a lot more choice. Most Assignments are sold on an ‘Exclusive’ basis. They are also more complicated than a regular sale because a mortgage can not be obtained on the closing of the Assignment, and will need to be postponed until the day of registration. Other issues such as occupancy, reimbursement of the seller’s deposits and more must be taken into account.

You need a Realtor that is trained in finding and drawing up the Offer for Assignments. So if you want to buy or sell an Assignment then you have come to the right web site! We also have the best trained Realtors with the most expertise in Assignments!

The Status Certificate provides basic and essential information concerning the financial status of a unit and of the condo corporation.”How much is in the reserve fund and is it sufficient for the immediate future? What did the engineering report say? How many units are rented in this buidling? Is there a claim against the current unit owner?” A Status Certificate answers all of these questions and more, it is your protection against the unknown.When purchasing a resale condo unit, you should ensure that your offer is conditional on receiving and reviewing a Status Certificate and the accompanying documents, as required by the Ontario Condo Act. The certificate is the resale equivalent of a disclosure statement and you must review all the material that comes with the certificate to ensure that you are satisfied that both the condo unit and the condo corporation are suitable for you.

This certificate, for which there is a fee of $100 inclusive of GST, must be delivered within 10 days of the request for it. It discloses whether the owner of the unit you are buying is current in the payment of common expenses as well as a picture of the condo corporation’s financial affairs. It is to be delivered with the documents, which govern the condo corporation but are not attached. Once the list of agreements is reviewed, you or your lawyer may also wish copies of some or all o them for review. There can be an extra charge for these documents

Original condos were developed as a cheaper form of housing. Instead of having to buy the land and the building, people could own their building/unit and share the land cost.It then makes private ownership possible in areas where land values would ordinarily make this too expensive i.e. living downtown Toronto.

People buy condos as much for ‘Lifestyle’ as they do for price. In downtown you can buy condos for over one million dollars quite easily.

Condo ownership also eliminates some of the problems of upkeep and maintenance often associated with home ownership, since the cost of maintenance is shared and is usually the responsibility of the Condo Corporation through its property management (Lifestyle). For older people, condos represent an attractive ownership alternative when they spend extended periods away from their property.

Before any home search begins a new buyer will need a down payment. In a Conventional Mortgage your down payment is at least 20% of the purchase price. However, you can buy a home with as little as 5% down. Anything less than 20% of the purchase price for a down payment is considered a High-ratio mortgage. High-ratio mortgages need mortgage loan insurance which protects the lender against mortgage default. Mortgage Insurance can be provided by a few different companies such as CMHC, Canada Guaranty and Genworth. Mortgage Insurance Premium fees are determined by the percentage of your mortgage and can vary from 0.5% to 5.65%.
You can determine down payment options using our Mortgage Calculator.

Mortgage Calculator

Condo Maintenance Fees are a monthly fee you pay to the building when you own a condo; they go towards the operating costs of the building

Condo Maintenance Fees are a monthly fee you pay to the building when you own a condo; they go towards the operating costs of the building

  • Some condo buildings include some or all utilities while others have the individual owners pay the utilities directly.
  • Each building pays for different amenities such as a 24hr security guard, valet parking, swimming pools ect. Usually, the more amenities a building offers, the higher the maintenance fees.
  • Finally each corporation is required to set aside a portion of the condo fees for a reserve fund to pay for major repairs in the future. Some corporations may not charge sufficiently for their reserve fund which could cause problems down the road.

The best way to compare expenses between buildings is to add your condo maintenance fees plus utilities you pay direct to get an accurate comparison.

Information on the status of the corporation including current condo maintenance fees is contained in a ‘Status Certificate’ for the corporation/building. You should always request a status certificate as a condition of making an offer on a resale condo property.

The choice to buy or to rent really comes down to a personal preference. But if economics are the deciding factor then you should always buy.

We did the math on a property that was bought and then rented. The property is located in Liberty Village. It is a one bedroom with parking and locker (plus the bonus of a large balcony). It sold for $315,000 and currently rents for $1700 per month. The details are as follows: 5% down ($15,750) and a mortgage of $299,250 at 2.94%. (five year fixed with a 25 year amortization). Monthly mortgage payments would be $1407. Property taxes are $150. per month and condo fees are $361. The total monthly outlay is $1918 versus renting at just $1700 per month. The difference is $218. This difference is what people with limited knowledge focus on.

Now let’s consider what happens after five years. The Renter invests the difference (they never do) but let’s believe they will do this every month and they earn an interest rate of 2% after tax (probably high). After five years the Renter would have saved $13,760. What happens to the Buyer? After five years, the Buyer would have repaid $43,764 of principal on the mortgage (forced saving). That’s because the payment of $1407 is split almost equally between interest and principal repayment. So the Buyer would be $30,000 ahead of the Renter even if the property never increased by one dollar!

If you assume that the property increased in value by 3% per year (the historical average for real estate), the property would be worth $365,000. The Buyer would then have increased their equity in the property to $109,514. If the Buyer had borrowed the down payment of $15,750 from family and repaid it, the net gain would still be $93,764. The biggest risk one can make is not investing in real estate!

If real estate prices increase, those who do did not buy are clearly the losers. But the naysayers will still ask: what happens if real estate drops in value? If they do, then both the Renter and the Buyer win. So how does the Buyer win? When real estate prices fall, the more expensive properties fall further. So while the property you own is worth less, the property you want to upgrade to is also worth less and the price gap narrows. The best time to upgrade your property is usually when prices are falling, not when they are rising. In summary renting involves the worst economic outcome and also comes with the biggest risk.

Closing is the day you (or your lender) hands over the full amount of the purchase price and Title gets transferred from the seller to the buyer. This is also the day the buyer gets the keys to their Condo! However, one thing all buyers should be aware of are closing costs. Make sure you work it into your budget. Ideally, you should budget 1.5%-3% of the purchase price for Closing costs. Closing costs are made up of a number of different expenses/adjustments and below we’ve listed a few common ones.

Legal Costs

When purchasing real estate you are required to obtain a lawyer to handle such tasks as reviewing the Status Certificate, preparing the mortgage, drafting title documents and conducting various searches. Costs can vary so it’s a good idea to get a quote.

Land Transfer Tax

The amount you pay in Land Transfer Tax will differ depending on where you live. If you are buying a condo or any property in Toronto you will have the Ontario Land Transfer Tax and the Toronto Land Transfer Tax.

Home Inspection/Appraisal Fees

Any time you require a Mortgage, a Mortgage Appraisal will need to be conducted in order to determine fair market value for your home. A Home Inspection is often done to determine the condition of the home.

Mortgage Insurance Premium

Mortgage insurance premiums can often be added to your mortgage. There will be taxes on this premium that will be paid on closing.

Interest Adjustment

Typically you are expected to make your first mortgage payment one month after closing on your new home. However, if you are closing mid-month, you may need to pay interest on the time between your first payment and the closing date. You can avoid interest adjustment by setting up your first mortgage payment exactly one month after your closing date.

Land Transfer Tax varies depending on where you live. If you are buying a property in Toronto you will have the Ontario Land Transfer Tax and the Toronto Land Transfer Tax. However, if you’re a first time buyer you don’t have to sweat yet. First time buyers are exempt from the Toronto Land Transfer Tax on the first $400,000 and qualify for a $2000 tax credit on the Ontario Land Transfer Tax.

Ontario Land Transfer Tax
  • 0.5% on the first $55,000
  • 1.0% on the portion between $55,000-$250,000
  • 1.5% on the balance over $250,000
  • 2.0% on anything over $400,000
Toronto Land Transfer Tax
  • 0.5% on the first $55,000
  • 1.0% on the portion between $55,000-$400,000
  • 2.0% on anything over $400,000

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