What Is An Exclusive Listing?
When the Toronto real estate market inventory gets low or the competition becomes fierce, those looking at alternative options might consider some ‘outside the box’ housing ideas. Not everyone lives in a traditional house or condominium. And, there are several reasons why. In our experience, a co-operative or co-ownership building is a great asset class to explore, as they tend to be more affordable and less competitive. And, who doesn’t love the insider scoop, in our fast-paced market?
Take a look at our Cole’s Notes version to understanding the difference between a co-operative building, co-ownership building, and condominium.
As the purchaser of a condominium, a number of things apply to you.
If you’re purchasing a unit in a co-operative building, here’s what you need to know.
For purchasers of units in a co-operative building, you’ll need to know these applicable details.
When it comes to purchasing a co-operative or co-ownership building, you’ll want to keep these pros and cons in mind.
There are many pros that come with purchasing a co-operative or co-ownership building. First, since many of these property types are older, converted apartment buildings (many built in the 60’s and 70’s), they often exist in very established neighbourhoods. For example, you’ll see this in Rosedale or Yonge and Eglinton. And with this in mind, these neighbourhoods are often seen as out of reach for the average buyer’s price point!
On the other hand, it is typical that these units are much larger than new condo units – a lot of bang for your buck! Furthermore, since there are some challenges with these types of buildings, there may be less competition. And, this means you will often see a reflection in the entry price. Although higher, the maintenance fee often contain your share of the property taxes, heat, water, etc. This is why it’s important to really understand what the fees cover! Lastly, since the buildings are older, they often have tons of character and charm (and, far less turnover), which is very much lacking in our newer condo supply!
More of a challenge than anything, these are some things you need to be thinking about. An important difference is that traditional bank financing is impossible to get for co-ownerships and co-operatives. Since only a small percentage of Toronto buildings fall under this category, they represent too small a sector for the big banks to cover. Therefore, many trust companies and credit unions will provide mortgages for a co-ownership or co-operative at competitive rates. However, some will require a 30%-40% down payment (if not the full amount in cash). This may not be achievable for many buyers. In addition to these challenges, more often than not, these buildings are older and have higher maintenance fees, more mature demographics, and outdated details (i.e. shared laundry, no amenities, radiant heat, older windows, common areas, etc.).
So, the question is, should you or should you not? If you are curious about knowing more on buying or selling in a co-operative and co-ownership building in Toronto, just ask us. Personally, I’ve helped two buyer clients investigate these options over the past year. One made a successful purchase and is very happy with this decision. The other? Upon exploring the idea, they opted for a traditional condo instead. Point is, it’s good to know all your options and then choose what works for you.
As a team, we’re happy to walk you through the requirements of buying into a co-operative or co-ownership building. More than this, we’ll introduce you to the right mortgage brokers and lawyers. Our goal is to facilitate a smooth transaction with one of these rare and unique properties.
This article is written by Fox Marin Sales Representative, Ian Busher. With an extensive background in carpentry and contracting, Ian is our resident “Renovations Expert”! He takes pride in his ability to assess the quality and condition of a house. This, in tandem with his talent for speaking to the feasibility and cost of potential renovations, and his eye for the aesthetic details of a property, makes him a powerful partner for anyone looking to buy a home in the Toronto real estate market.