# Condo/Home Price Calculating



## monokitty (Jan 26, 2002)

Some questions for home owners.. 

If you see a place listed for $250,000, for example, a condo, I know that the list price isn't the final price (obviously). What else is added? And what about tax? Is it the standard 14% of the purchase price, or do homes and condos work in a different manner? (speaking from within Ontario.) And a mortgage -- is it based on the list price, or the price after all taxes and other fees? (the latter I assume, but could be very wrong.)

- List Price
- Yearly Property Tax
- Monthly Condo Fees
- Monthly Utility Bills

And...?  What other costs are involved?


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## Beej (Sep 10, 2005)

14% sounds like sales tax, which would just be for new homes.

I think some places have a land transfer tax, which may or may not apply to you. Look into it.

Legal fees and other various costs of buying and moving are about 2%. Best to have that cash available for the costs as they appear. Maybe 3%.

Property taxes can range quite a bit...maybe 1.5% of value is a rough estimate, but they're due once per year. If you're buying after they are already paid by the previous owner, then they are generally rolled into the purchase price, so you may have time to save up for next year. Talk to your real estate lawyer (you will need one, so find one).

Condo fees can be quite high but keep in mind they often include a bunch of utilities and capital maintenance for the building while, for a house, you have to save up for capital maintenance (roof, siding, etc.) and pay all your own utilities.

Utility bills range widely with personal use and the building envelope. Start with assuming $1500-$2000 per year (much lower if condo fees include heat/power; higher for older homes with poor insulation and old heating systems) and find out if power, heat and water are covered in condo fees. I'm not sure how TO bills water.

Also note that, for a mortgage, if you're putting down less than 25% of the price, there will be an insurance fee (CMHC or GE) and it is about 3%. You don't need this in cash, but it adds to the mortgage.


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## adagio (Aug 23, 2002)

You pay land transfer tax in Ontario. Up to $250,000 it is amount X .01 - 275. From $250,001 - $400,000 it is amount X .015 - 1525.

As a safe guess figure closing costs with taxes and legal fees to be about $5000.

The seller is responsible for the property taxes up until closing. The amount is adjusted according to the calendar.

Generally condo fees include water, electricity, heating and building insurance. Sometimes it includes cable TV. You will need home insurance for the contents of your condo.

If you're going to buy in Toronto then do it quick. The city is out to grab your pockets for an additional land transfer tax. 

I just bought a condo last week and close in July. I hope I squeak in before I have to give idiot Miller anymore money.


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## monokitty (Jan 26, 2002)

Beej and adagio - thanks for the input. Much appreciated.



> Generally condo fees include water, electricity, heating and building insurance.


Ah, good to know. At first I thought I was going to pay $300-$700 per month in condo fees to only keep the front lawn trimmed and the drive way shoveled.


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## adagio (Aug 23, 2002)

Lars, be aware condo fees differ on townhouses. Those only cover mowing the lawn and no utilities.

Don't forget apartment condo fees also cover amenities. The building I'm moving into has a pool, whirlpool, sauna and gym as well as a terrace lounge. The fees also cover security/concierge services.


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## PenguinBoy (Aug 16, 2005)

If you are considering a condo, it is worth looking into not just the condo fees but also the state of the reserve fund, the management of the condo, etc.

I have heard of cases where a developer will build a new condo with artificially low fees and then when the management of the development is turned over to the condo association they realize that they need to raise the condo fees significantly to build up the reserve fund.

You should compare fees and also look at what is covered as this can vary a lot between developments, for example in some case heating is covered by the condo fees and in other cases it is not - this can amount to a significant difference in monthly costs.

As you might expect, small buildings with lots of amenities (elevator, underground parking) cost a lot to run as the cost of providing the amenities needs to be covered by a small number of units.


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## dona83 (Jun 26, 2005)

I just bought a condo...

Final price was $126,500.

My upfront costs are my down payment ($6500) + 1.5% cash (meaning non borrowed funds) for closing costs incluiding the lawyer ($1000+), mortgage appraisal (typically $250), property tax transfer (approximately 1% give or take, waived upto a certain amount for first time buyers.

Because I'm only putting in 5.xx% down, I have to pay a 2.75% CHMC Insurance Premium on my mortgage amount which I have elected to add to my mortgage. $120,000 + 2.75% = $123,300. If you put between 5% and 10%, you pay 2.75%. If you put in between 10% and 20% I think you pay 2%, and between 20% and 24.99999...% you pay 1%.

Thus, my mortgage payments are $347 biweekly, roughly $750 a month. (It's just easier for them to take a little bit each paycheque). The sale completion date is July 12th so on August 1st I'll have one payment due which would cover the interest only. On August 17th I'll have a second payment due which would also cover interest only. My next payment after that would be 2 weeks after August 17th which would be interest + principal from then on. I'm making these two interest only payments because 1. The first payment is to bring the mortgage the beginning of a month, 2. The second payment is to bring my payment intervals to my desired mortgage payment date, coinciding with my August 17th paycheque.

Now on top of my mortgage payments, I have condo fees, whatever utilities are not included (so Hydro, cable, internet, phone). Also you have to deal with property taxes. If you own less than 20% equity of your home, the bank is required to pay the taxes for you. For me my property tax is $945/year, which means they'll take an additional $39 or so biweekly. I find it's less hassle this way. My municipality of Mission allows owners who do pay their own taxes to regularily contribute to a fund to pay next year's tax, and they earn interest equivalent to prime - 2% for the funds they do precontribute. Great incentive there.

As a condo owner, you have to worry about the financial statements of your strata corporation. Do they have enough contingency reserve? Do they regularily earn a profit? The condo I bought had a huge boiler and piping replacement 5 years ago (lifespan of a boiler is 25 years, this is a 30 year old building, no worries), at a cost of $155,000, each of the 38 owners were hit with a $3900 assesment because the cost exceeded what they had in their contingency reserve. Don't get me wrong, if the reserve is equivalent to $1000 per owner or higher, the reserve is healthy. The contingency is for emergency repairs -- the boiler replacement was years in the making.

Be sure to check miscellaneous by-laws within the strata corporation. Mine charges $25 everytime someone moves in or moves out lol. Additional storage areas, parking, additional parking stalls, waste management, landscaping, building repair. Oh yes request strata meeting minutes for at least the past 12 months so you can see if anything was discussed that could concern you -- leaking roof? dry rot? water contamination?

I'll write more when I can think of more but hope that's a good starting point for you.


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## adagio (Aug 23, 2002)

In Ontario you can get a Certificate of Status. This will tell you everything you need to know about a condo building from reserve funds to who is on the board. This certificate is usually part of a conditional purchase at time of offer. Your lawyer will look it over and discuss any deficiencies with you. If status is iffy you can back out of an offer without penalty.


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