{"id":10158,"date":"2017-02-28T01:00:19","date_gmt":"2017-02-28T06:00:19","guid":{"rendered":"http:\/\/www.zoocasa.com\/blog\/?p=10158"},"modified":"2018-10-11T14:54:00","modified_gmt":"2018-10-11T18:54:00","slug":"the-condo-blacklist-what-buyers-need-to-know","status":"publish","type":"post","link":"https:\/\/www.zoocasa.com\/blog\/the-condo-blacklist-what-buyers-need-to-know\/","title":{"rendered":"The Condo Blacklist: What Buyers Need to Know"},"content":{"rendered":"<p>As housing prices shoot through the roof, buyers are increasingly turning from single- or semi-detached family options to <a href=\"http:\/\/www.zoocasa.com\/toronto-on-townhouses\">townhouses<\/a> and condos. They can be wise alternatives in terms of budget, and are usually part of a condo corporation, which offers a number of perks and protections.<\/p>\n<p>However, while condos are generally competitively priced compared to houses, finding one that\u2019s listed for a super-low amount can be a red flag. And, if the listing agent recommends you pay at least a 20% down payment on the property, that can be an even bigger one. Regardless if you have a larger nest egg to pay or not, this request should be cause for concern \u2013 in fact, it could be a sign that your condo is on the \u201cblacklist\u201d.<\/p>\n<p><strong>Related Read: <a href=\"https:\/\/www.zoocasa.com\/blog\/infographic-townhouses-the-top-20-most-affordable-neighbourhoods-in-toronto\/\">The Top 20 Mortgage Affordable Toronto Neighbourhoods for Townhouses<\/a><\/strong><\/p>\n<h2>The Condo Blacklist<\/h2>\n<p>While there\u2019s no <em>official<\/em> industry blacklist per se, this term refers to properties that come with less-than-desirable circumstances \u2013 factors that can create an emotional rollercoaster for buyers not in the know.<\/p>\n<p>There are a number of reasons a property could be blacklisted, but most are related to its financials. Condo corporations must use money generated from condo fees for a number of things including groundskeeping, snow removal, and general maintenance of the building\u2019s outer shell (windows, room, lobby and elevator). In buildings that have them, they also apply to amenities such as pools, gyms, and even the odd bowling alley. All of these \u2018perks\u2019 come at a premium cost and are expensive to maintain.<\/p>\n<p>As the condo corporation pays for the maintenance of these items, the money comes out of the building\u2019s bank account, the balance of which must remain above a certain level for high-ratio insurers (CMHC, Genworth, and Canada Guaranty) to cover unit purchases within the property (required by law for buyers who pay less than 20% down). If a buyer is required to pay the full 20% on the unit, it\u2019s likely the corporation\u2019s bank balance isn\u2019t up to the insurers\u2019 standards.<\/p>\n<p><strong>Related Read: <a href=\"https:\/\/www.zoocasa.com\/blog\/how-to-save-for-a-down-payment-under-the-new-mortgage-rules\/\">How to Save for a Downpayment Under New Mortgage Rules<\/a><\/strong><\/p>\n<p>Every lender and insurer has their own particular guidelines and every property is unique in regard to these financial comfort levels.<\/p>\n<h2>Condo Corporation Status Certificate &amp; Financial Statements<\/h2>\n<p><strong>\u00a0<\/strong>How do lenders and insurers know this information? They find out by reviewing the condo\u2019s Status Certificate, which includes the property\u2019s most recent financial statements and operating costs. The certificate will also reveal work that has been recently completed, what pending work requires action, whether there are any outstanding liens or work orders, and the current financial status of the condo corporation. In some cases, it could include details of criminal matters, or whether the <a href=\"https:\/\/www.zoocasa.com\/blog\/should-you-buy-a-condo-thats-facing-a-lawsuit\/\">condo is embroiled in a lawsuit<\/a>.<\/p>\n<h2>Do Your Due Diligence<\/h2>\n<p><strong>\u00a0<\/strong>By paying a full 20% on the property, the buyer bypasses the need for high ratio insurance, and ensures their only funding will come from the lender. However, lenders also have their own guidelines and will likely include the review of the Status Certificate and condo corporation financial reports as a closing condition. This is why it\u2019s important not to drop conditions from your Offer of Purchase \u2013 you don\u2019t want to find out from your lawyer that your condo purchase can\u2019t be legally closed because the lender won\u2019t approve the mortgage.<\/p>\n<p>A smart method is to confirm the property\u2019s insurable status by having your real estate agent confirm via a property search to determine whether it fits the high ratio insurer\u2019s criteria \u2013 that way, you won\u2019t be in for any nasty surprises when making an offer on your unit.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>As housing prices shoot through the roof, buyers are increasingly turning from single- or semi-detached family options to townhouses and condos. They can be wise alternatives in terms of budget, and are usually part of a condo corporation, which offers a number of perks and protections. However, while condos are generally competitively priced compared to [&hellip;]<\/p>\n","protected":false},"author":44,"featured_media":10160,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jnews-multi-image_gallery":[],"jnews_single_post":[],"jnews_primary_category":[],"footnotes":""},"categories":[76,42],"tags":[],"class_list":["post-10158","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buying-a-home","category-condominiums"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The Condo Blacklist: What Buyers Need to Know | Zoocasa Life<\/title>\n<meta name=\"description\" content=\"On the market for a condo unit? 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