Having been a condo owner for a little more than a year now, I’ve become pretty adept at budgeting for my monthly bills. Cell phone to keep me connected? Check. Cable to keep me entertained? Check. Mortgage to keep a roof over my head? Check. Maintenance fees to keep the building running smoothly? Check.

Maintenance fees (sometimes referred to as condo fees) are a monthly expense, paid by condo owners, that do exactly what the name sounds like — they help maintain the building. More specifically, they help maintain the common areas of the building, like the lobby, the parking garage, the exterior facade and any amenity areas that exist. Some people believe that, because of maintenance fees, condo owners have greater monthly expenses than homeowners, but this is a snare and illusion, for the fees cover many similar costs that homeowners experience, but in a more regular billing cycle. For example, as a homeowner, my mom has a garden to landscape in the summer and a driveway to shovel in the winter. She’s billed for these services in two lump sums, one paid to the landscapers at the first sign of summer, and one paid to the snow-removal service at the start of winter. In my condo, I also have a garden to landscape and a driveway to shovel, albeit on a larger scale, that I share with the 100 or so other owners in the building. The costs of these services are built into our monthly maintenance fees, amortizing them across the year and making budgeting a slightly easier task.

Maintenance fees don’t only cover landscaping and snow removal, they typically also include exterior window cleaning and building facade maintenance, common area utilities and upkeep, common area insurance, garbage removal services and a reserve fund that gets built up to cover large expenses or repairs. A good rule of thumb is that anything outside the walls of your condo unit are part of common expenses (monthly fees) and anything inside the walls of the condo are billed to the individual unit owner. There are exceptions to every rule however, since some maintenance fees will include monthly utilities for the suite, but some will not. My building has individually-metered electricity for the suites (I pay the utility company directly for my usage) but water and gas are included in my monthly fees, so I don’t get billed for them via the utility companies direct. What’s included will vary according to each developer and condominium, so make sure you have a clear understanding of what you’re paying for. Also, remember that the nature of amenities will have a big impact on monthly maintenance fees. The 24-hour concierge service? Those salaries have to be paid from somewhere. The state-of-the-art fitness centre? Those machines aren’t cheap to buy. The seasonal outdoor pool? Huge upkeep necessary for smooth paddling. If you don’t use these amenities, there’s no sense in living in a building where you’ll be paying for them, since condo fees aren’t calculated based on usage, they’re based on percentage of interest.

In simple terms, percentage of interest (or percentage ownership) is calculated based on the square footage of each unit and its relative size compared to all the units in the building. This percentage is then multiplied by the annual operating budget of the condominium (as determined by the condo board in the annual budget) and divided into 12 monthly payments, to give the condo fees for a unit. To illustrate, the wee 650-square-foot space that I call home has a 0.703% interest in the building. With my building’s particular annual operating budget, that works out to $320.07 a month in condo fees, or approximately $0.49 per square foot. When I purchased my unit, the estimated maintenance fees were approximately $0.38 per square foot (which gave me a monthly bill of $247 for about the first year before the building was registered), but an increase in the first year is quite common, as the fees are suddenly based on real budget numbers, rather than an annual budget estimated by the developer. After that initial jump, condo fees usually stay relatively stable, with only minor adjustments for inflation.

On the first of every month, when my fees are due, I let out a small sigh, knowing that my bank account is a little lighter than it was the day before. But whenever I see a cleaner in the lobby, the garbage men loading up the garbage or the landscapers pruning the trees, I smile, free from the everyday logistics of running a house.

If you would like more information about condo fees and what they could include, please contact Matt Richling of the Ottawas Condos Team at 613-286-9501 or Matt@MattRichling.com

Below is a great article that sheds a little more information on why we are seeing trends of people outside of the typical demographic purchasing condominiums. Not looking to purchase as an investment? Take a second and re-evaluate. This is the largest purchase that (lets hope you will continue to make larger) most people make, so not having a concern for its future is only going to lead you down the rabbit hole.

Young investors, older boomers are driving the condo market across Canada

By Sheila Brady, The Ottawa Citizen

The condo market is hot and getting hotter. And many of the buyers seem to be getting younger.

Consider Andrew Serre, a high school graduate who stood in line for eight hours to be among the first to buy a condo at Soho Lisgar. The 22-year-old already owns a one-bedroom in the Mondrian, a Bank Street condo he bought when he was 19. “This one is bigger,” says the lanky Serre, who had his eye on the B2, a one-bedroom with 619 square feet and a generous balcony facing Cooper Street, while crunching the numbers on his calculator.

The key is to get in early, says Serre, who was second in a lineup that stretched down Lisgar to Bank Street. The condo started at $276,900 on the second floor, rising by $2,000 for each floor and by $3,000 for floors six, seven and eight. He reserved a condo on the eighth floor, and a locker for $3,500. The initial price: $291,000.

Serre was eligible for a two-per-cent discount because he bought on the first day and he got an iPad after finalizing the deal. The developer, Mastercraft Starwood, also gave early buyers free, stainless-steel appliances.

“This is a tangible investment. You can actually see it. It’s not like a stock,” says Serre, who works for ING Bank and estimates he paid $158,000 for his Mondrian condo and it’s now worth $240,000.

“I’m not sure what I am going to do. Move, sell it or rent it out.”

Further back in line, Jean-François Forgues balanced on crutches to take pressure off his ripped Achilles tendon while zeroing in on the same design, but up on the 10th floor. The 28-year-old has already bought two condos. “This is an investment, a smart investment.”

Even further back, Ross Baylin patiently waited as security officials allowed small groups into the slick sales centre. The retired 60-year-old and his wife, Suzan, now live in a rambling 4,200-square-foot house in Cedarhill.

“We don’t have a cottage. I like to play golf and want to spend time travelling to Tuscany,” says Baylin, who spent years sitting on airplanes and staying in hotels, while working in private industry and for the federal government.

“We visited every part of Florida, now I would like to travel more,” says Baylin, who wants to declutter and looks forward to living in an urban, one-bedroom condo. He has checked out several condo sites, but the timing wasn’t right. Soho Lisgar will be ready in three years.

At one point, it seemed earlier buyers snagged his first choice, leaving him to write off the exercise as useful, but unproductive. Then a condo was turned back and he picked it up. “It seems like there’s good karma here,” he said while sipping a celebratory glass of wine.

Across the room, Serre and Forgues were sharing jokes, taking pictures of the model showroom with their cellphones, then sitting down to share wine.

“It’s been a good day,” says Serre.

The condo market is strong in Ottawa, says Ron Desjardins, predicting sales will control 20 per cent of the new home market in 2010. The housing analyst expects 5,500 sales of new townhomes, singles and condos this year, including 1,200 condos. The condo market controlled about 15 per cent of the new sales market last year.

A majority of condo sales are smaller, one-bedroom units or one-bedrooms, plus a den geared to younger buyers, some boomers, women and singles looking to move on after a divorce.

Bigger condos seem tailored to boomers, but these buyers take longer to cash out their homes and to make a decision, he says. This explains why many bigger units in a condo building take longer to sell.

“In fact, 85 to 90 per cent of sales are for condos under 1,000 square feet,” says Desjardins.

Smaller condos are also a popular choice for investors, says David Wex, partner with Urban Capital and the developer behind the hugely successful projects of East Market, the Mondrian and now Central on Bank Street.

It was condo owners buying a second unit or referring friends that drove many of the early sales at Central during a private launch of Phase Two last week.

The following day brokers and the public bought into the site. “We also sold some of the remaining condos in Phase One,” says Wex. Staff also took names for Phase Three.

Over at Soho Lisgar, staff estimate 60 per cent of the buyers were young professionals and investors, while 40 per cent were older boomers.

However, Canada Mortgage and Housing Corp. analyst Sandra Perez Torres says older boomers retiring from public service jobs with indexed pensions will drive condo sales across the city.

“Ottawa has one of the biggest percentages of senior population,” says Perez Torres. “The buyer profile will be trending towards the senior market.

“Ottawa is also still a very affordable market, below the Canadian average.”

The average price for a house in Canada, including condos, is $320,000. In Ottawa, it’s $304,801, she says.

“The average price in Toronto is $396,154 and a hefty $592,441 in Greater Vancouver.”

(The above video might not work through your RSS reader. Pop over to the website to view!)

Almost daily, I get the question about what exactly separates one unit from the other. I took a little trek over to the Mondrian which is still under construction to show what is keeping the elephants out!

Please leave your comments below! And you can also call me direct 613-286-9501 or email Matt@MattRichling.com!

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http://www.MattRichling.com

"pumpkin season" by émiliep on flickr

When you purchase a condominium in Ottawa we include in the offer a condition that allows you to research the condominium and read over its “status certificate” with your lawyer. This also gives you time to get in contact with members of the condo board and talk to them about the following questions. During the process you will learn how responsive and organized its members are. More importantly it will allow you to find out if there are any problems before it is too late.

1. What percentage of units is owner-occupied? What percentage is tenant-occupied? Generally, the higher the percentage of owner-occupied units, the more marketable the units will be at resale.

2. What covenants, bylaws, and restrictions govern the property? What grandfather clauses are in place? You may find, for instance, that those who buy a property after a certain date can’t rent out their units, but buyers who bought earlier can. Ask for a copy of the bylaws to determine if you can live within them.

3. How much does the association keep in reserve? Plus, find out how that money is being invested.

4. Are association assessments keeping pace with the annual rate of inflation? Smart boards raise assessments a certain percentage each year to build reserves to fund future repairs.To determine if the assessment is reasonable, compare the rate to others in the area.

5. What does and doesn’t the assessment cover? Does the assessment include common-area maintenance, recreational facilities, trash collection, and snow removal?

6. What special assessments have been mandated in the past five years? How much was each owner responsible for? Some special assessments are unavoidable. But repeated, expensive assessments could be a red flag about the condition of the building or the board’s fiscal policy.

7. How much turnover occurs in the building? This will tell you if residents are generally happy with the building. According to research by the Canadian Real Estate Association®, owners of condos in two-to-four unit buildings stay for a median of five years, and owners of condos in a building with five or more units stay for a median of four years.

8. Is the condo building in litigation? This is never a good sign. If the builders or home owners are involved in a lawsuit, reserves can be depleted quickly.

9. Is the developer reputable? Find out what other projects the developer has built and visit one if you can. Ask residents about their perceptions. Request an engineer’s report for developments that have been reconverted from other uses to determine what shape the building is in. If the roof, windows, and bricks aren’t in good repair, they become your problem once you buy.

10. Are multiple associations involved in the property? In very large developments, umbrella associations, as well as the smaller association into which you’re buying, may require separate assessments.

I came across a list by NAR (National Association Of Realtors, basically our USA counterpart) and decided to Canadianize the list. You can check out the original list here.

If you  would like to talk about buying a condo here in Ottawa, please contact Matt Richling directly 613-286-9501 or by email Matt@MattRichling.com.

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http://www.MattRichling.com

So it is the middle of the month. PERFECT opportunity to breakdown the current statistics for the Ottawa Condo Market. We are going to talk about three markets - Entire Ottawa, Downtown Core, and West Ottawa North.

ENTIRE OTTAWA

Currently in Ottawa there are 560 condo properties for sale across the entire Ottawa Real Estate board (107 of which are conditionally sold, but not sold firm). The average price for all these listed is $350,101. Over the last month (most accurate current information), the average price listed was $234,115 with the average sale being $230,111 - providing a 98% list to sale price ratio with average of 30 DOM (days on market). Total amount of condominiums sold in Ottawa, year to date is 2,650.

DOWNTOWN OTTAWA CORE

Currently in the downtown Ottawa core (see above map) there are 124 condominium properties for sale (16 which are conditional sold, but not sold firm). The average list price for these units is $543,868, which is high, mainly due to a fair number of new construction buildings listing the penthouse/larger units - in return raises the average). Over the last month (most accurate current information), the average price listed was $335,025 with the average sold price being $333,799 - providing a 100% list to sale price ratio with an average of 13 DOM (days on market). Total amount of condominiums sold in the downtown core, year to date is 375.

WEST OTTAWA NORTH

Currently in the west Ottawa north area (see above map) there are 62 condominium properties for sale (12 which are conditional sold, but not sold firm). The average list price for these units is $439,958, which is high, due to a couple high priced resale listings. Over the last month (most accurate current information), the average price listed was $294,412 with the average sold price being $289,578 - providing a 99% list to sale price ratio with an average of 39 DOM (days on market). Total amount of condominiums sold in the west Ottawa north area, year to date is 221.

RECAP

What does this mean? If you are looking in the downtown core, units are NOT lasting on the market. If you are relying on solely checking the MLS website, *YOU WILL MISS OUT ON PROPERTIES* especially in this market. Get signed up on an auto-notification search through your Realtor. Ensure he/she is sending you the listings asap, not one a one email per day or week setup. Also this data also shows that if you are willing to move outside the downtown core how much you can save. In most cases $40,000 or even up to $100,000 for certain parts of the city. Where do you want to live? What is your pre-approved (through a mortgage broker) amount, and what is your budget (sometimes these are two very separate numbers)?

If you would like more specific data about your area, or would like to talk about selling your home, please contact Matt Richling directly 613-286-9501 or by email Matt@MattRichling.com.

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http://www.MattRichling.com

Who ever said that Ottawa was a boring government town with no taste, is proven wrong again with 669 Edison Avenue in Westboro. Both sides of this 2009 semi-detached home are available for purchase, which just recently had the finishing touches put in place. The units, which are mirrors of each other both boast three generous sized bedrooms, and three bathrooms (with the rough in for the fourth in the basement). The interior, all hardwood except the basement with Berber carpet and bathrooms with tile, were designed for entertaining with the open concept main level, chef’s quality kitchen and high nine foot ceilings. The basement is fully finished including over sized windows, and plenty of room for storage. No expense spared on the exterior either, with full landscaping in the front and fully fenced, maintenance-free backyard.

Did we mention the homes are both Energy Star qualified! Meaning that there are features through out the home designed to save you money, have improved air quality, and expand fewer pollutants than non-qualified homes. For more information on Energy Star and what exactly it requires - go here.

Both homes are listed on the Multiple Listing Service for $464,900 per side and are available with a short closing period. For a private tour please contact Matt Richling directly at 613-286-9501.

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http://www.MattRichling.com

Matt Richling is a sales representative with RE/MAX Affiliates Realty Ltd., Brokerage, Independently Owned and Operated - The opinions of the authors expressed herein do not necessarily state or reflect those of the RE/MAX or RE/MAX Affiliates Realty Ltd., Brokerage.

Today I was able to tour the units at 200 Besserer street (corner of Cumberland), also known as “The Galleria”. Built by Richcraft,the 12 floor building contains 149 units mixed mainly with one bedroom, one bedroom plus studio, two bedrooms, and two bedrooms plus studio. The smallest unit, the Holgate, is 615 sq. ft. compared to the largest units, Harris and the Jackson both 1,135 sq.ft. aproximately.  Prices for the units range from $279,943 for the Holgate (one bedroom 615 sqft) on the 10th floor to $473,747 for the 12th floor Jackson (two bedroom plus study 1,135 sqft). Don’t forget parking is an additional $27,500 for the third floor, or $30,000 for the first and second floor.

The units themselves feature “higher ceilings” (basically vary by unit - some up to 10ft!), full hardwood, ceramic tile, and berber carpet, six appliances, and lavish bathrooms. The finishing touches are currently being put on the units, so there are not any interior pictures, but you can take my word that the finishes in the building were impressive. The recreation area and pool are quite large compared to the surrounding condo buildings. As well the entrance and hallways were equally as impressive and created a grand feeling as I toured the building.

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http://www.MattRichling.com

Matt Richling is a sales representative with RE/MAX Affiliates Realty Ltd., Brokerage, Independently Owned and Operated - The opinions of the authors expressed herein do not necessarily state or reflect those of the RE/MAX or RE/MAX Affiliates Realty Ltd., Brokerage.

Over the last couple weeks the lower floors have been starting the final inspections, allowing the owners a chance to see the units. Below are some photos (sorry about the quality), that the owners have taken. I continue to be impressed with the building.

Rental prices are beginning to pop up, anywhere from $1,450 per month for a one bedroom and the prices go up from there (Parking of course is extra!).

(Above photos are property of Facebook)

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http://www.MattRichling.com

Matt Richling is a sales representative with RE/MAX Affiliates Realty Ltd., Brokerage, Independently Owned and Operated - The opinions of the authors expressed herein do not necessarily state or reflect those of the RE/MAX or RE/MAX Affiliates Realty Ltd., Brokerage.

Once we have found the home you would like to purchase, we need to present the vendor (the seller) with an Offer to Purchase or an Agreement of Purchase and Sale. As your home is probably your biggest investment, it would be wise to work with your real estate agent and/or a lawyer in preparing your offer. Remember that the Offer to Purchase or Agreement of Purchase and Sale is a legal document and should be carefully prepared.

Any offer or agreement will typically include:

• Your legal name, the name of the vendor and the legal civic address of the property.
• The purchase price offered.
• The chattels that will be included in the purchase price (e.g.: window coverings, appliances or a satellite dish). Whatever items in or around the home that you think are included in the sale should be specifically stated in your offer (some of you might have heard me talk about “the Cat” being included).
• The amount of deposit.
• The closing day (date you take possession of the home)–usually 30 to 60 days from the date of agreement. It can also be 90 days or longer.
• Date when the offer becomes null and void.
• Any other conditions that go with the offer, including property inspection and approval of mortgage financing.

Below I have included a sample Agreement of Purchase and Sale (and one specifically used for condo’s), which is the same as one that I would prepare or use (This is actually from the Toronto Real Estate Board, but it is the exact same in Ottawa minus the little TREB logo in the top corner). The best part about these forms is that they breakdown and explain each and every clause, from lawyer speak to English. Especially when just starting out, I always recommend that my buyers read over and become comfortable with the offer before finding the property they love. This way when the time comes you are more prepared and we can focus better on the negotions.

Agreement of Purchase and Sale

Agreement of Purchase and Sale - Condominum

The process of making an offer, receiving a counteroffer and then revising it again is not uncommon. The whole process can seem like a roller coaster ride – exciting, but stressful. It’s all part of making the deal work best for you and the vendor.

Are you thinking about buying? We can sit down and talk about the process, your options, and the market. Contact me (click here) and let me know what I can do to help!

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http://www.MattRichling.com

Matt Richling is a sales representative with RE/MAX Affiliates Realty Ltd., Brokerage, Independently Owned and Operated - The opinions of the authors expressed herein do not necessarily state or reflect those of the RE/MAX or RE/MAX Affiliates Realty Ltd., Brokerage.

Earlier last week I asked around Twitter and Facebook (add me!) for anyone that had a question about real estate that they would like to have answered. Below are the first three questions I was asked. Do you have a question - Ask me!

Kim P on Facebook asked - I am thinking about moving to Calgary, can you refer me to an agent out there?

Of course! Before I set you up with an agent that works in a specific area, I want to find out exactly what your needs are and get a better feel for the type of agent you would “mash” well with. Whenever I refer someone, it reflects back on me, so I will work extra hard to ensure that you are being taken care of!

Also it is good to note that I attend a high number of networking events that allow me to meet agents from all over the world specifically for this reason. To be able to help any of my clients that are moving, regardless if it is in Ottawa, Halifax, or a small remote town in Asia, I can and will be able to refer an agent.

mstrpln on Twitter asked - Where’s the best (and modest) neighborhood to move to in Ottawa?

I had a chuckle with this question. I would love to spit out an answer but I do not believe that there is a perfect answer to this question. Each client is going to be looking for different features in a neighborhood and will find different pros and cons that will matter to her/his family. This is where knowing what you want (see link to previous post) is important and will help you (and me) figure out what you might find to be modest compared to the next person (or even your significant other!). While one neighborhood might be seen as cheap and rough, the next person see’s as affordable and a great entry into the market.

spiche on Twitter asked - In your opinion, if buying new, where should we focus our money when upgrading to get the most return when we sell later on?

Great question and one I get asked often by clients who are buying new from builders. I like to start the answer with asking how long you are planning on staying at that home? If you are staying for a period of time that allows you to enjoy the property then take your preferences towards how you will use the property in high regard. For example, if you enjoy cooking and will spend many evenings cooking and entertaining, then spending money in the kitchen will not only benefit you as the home owner living in the unit for the next five years, but also benefit the buyer when you sell. If you

If your answer is more in the shorter time frame or you just don’t like the question, focus on your typical renovation areas - kitchen, bathrooms, flooring, basement (finishing the basement and bathroom).

Buyers are just like you (…they ARE you!)  and are for the most part, going to be looking for the same things you are. Not every home will work with every client, but if you are going to be investing upgrades into your general areas (kitchen, bathroom, flooring, basement etc) then feel asured. Want a more specific answer to your situation? - Ask me!

Do you have a question that you would like answered? Let me help you and help others by answering your question! Email me, Twitter me, or message me on Facebook.

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http://www.MattRichling.com

Matt Richling is a sales representative with RE/MAX Affiliates Realty Ltd., Brokerage, Independently Owned and Operated - The opinions of the authors expressed herein do not necessarily state or reflect those of the RE/MAX or RE/MAX Affiliates Realty Ltd., Brokerage.