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Some answers to common condo-buying questions

II thought I’d take a moment and address some of the most common questions that I’ve been asked over the past couple of weeks.

II thought I’d take a moment and address some of the most common questions that I’ve been asked over the past couple of weeks.

What is an assignment deal? An assignment deal involves the transfer of the interest in an agreement of purchase and sale, rather than the actual property itself. The thing to watch out for here is occupancy fees — how long the anticipated closing is and how much the fees are. It’s like buying a brand new property but not as the original owner. It’s also important to ensure that the offer is drawn up to protect your interests in the same way a resale agreement is put together.

What happens to my deposit? When you purchase a property your deposit will be held in the trust account of the listing brokerage, nine times out of ten. The deposit can only be pulled out of that trust account if the deal closes, if it falls apart and a mutual release is signed to direct the funds back to the buyer, or by court order if one of the first two scenarios prove difficult. The deposit does go towards the down payment on your mortgage, for all intents and purposes, if the deal?is?successful.

What do I do in a multiple offer situation?

To be honest, the only way to ensure you’re not left second-guessing is to go in with your best offer. In other words, the highest price at which, if you discovered someone else was successful, you’d be disappointed.

If I actually win a multiple offer situation, did I still lose? If you’re very comfortable with the existing solds and what you know the property to be worth on paper, you’ve assessed what’s important to you and you’ve discussed when you plan on selling with your Realtor, then you may simply be setting a new market value. I recently helped a friend and client secure a townhouse for $50,000 above list price, establishing a jump in market value of approximately $35,000. The reason we were and happy is because we’re not looking to resell for at least five years, and I know that area will still generate a good profit when they do look to move. Having said that, it is important to review in detail because not all multiple offer properties are created equal.

I’m looking for a condo exclusively for investment purposes; what should I do? This may surprise you. Depending on your price range you will have a choice of one or two buildings, up to a maximum of four. You’re either looking for the cheapest bachelor or one-bedroom in the downtown core which can successfully be rented at a profit, or a two-bedroom plus den that can be rented to three students. There are less than a handful of buildings worth considering because while it’s not hard to make a decent real estate investment in this city, if you can, you may as well make a great one.

– Amit is a Realtor/Developer with Re/Max. amitp@rogers.com

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