05/31/2012 02:32 EDT | Updated 07/31/2012 05:12 EDT

Ask a Realtor: New Condo or Resale?

"Ask a Realtor" appears Thursdays. Have a real estate question for Susanne? Please email her at, and she will publish and answer the questions of most general interest.

Q: Should I buy a new or resale condo?

The advantages of new condos

There is much to like about a new condo. All new kitchen, bath, windows, etc.! And when you buy from a floor plan, you can also sometimes ask for custom finishes and certainly upgrades. You get exactly what you want. Also, if it's in a great location, has a balcony or a big terrace, even better. Many new condos also have fabulous rooftop gardens and some come with private elevators. If you buy a penthouse....lucky you! Is it more complicated than buying a resale condo? Yes.

Will you make money when it is finally built? Most likely, but probably best to wait until the building is registered because it's hard to sell the "paper." This is the original agreement (amount paid including the down payment, usually 25 per cent) plus what is the perceived dollar increase in market value of the unit now. This calculation determines the new asking price. With a newly-built condo you will have a phantom mortgage (like rent to the builder) until the building is registered -- usually when 90 per cent of the units are sold. Only then will you put your own mortgage in place.

Once the building is registered you are the owner, and by doing comparables in the area, you can list the property for what you and your agent determine is its market value.

What about a resale?

Resale condos have many pluses. Firstly, they may have been built many years ago. They will be bigger than new condos for the money. They may be recently renovated and if not you can certainly entertain that possibility. But you're stuck with the windows unless the building has replaced them. The building will also have an established board. As well, they have a built-up reserve fund for ongoing major repairs.

An older building will have an established clientele and you will be privy to much information about the running of the building when you obtain the status certificate. The size of the reserve fund, the yearly financial report and minutes of the board meeting. Are there any assessments? (Charge to condo owners if the reserve fund can't pay for an unplanned additional expense.) You can also find out how much of the building is rented. The by-laws will be available to you; can you have a pet? A barbeque? All of this will have been decided by the board of directors.

And most importantly your closing date is firm. With new construction the move-in date for a new condo might change, or be delayed several times. But don't forget with a new building there will be little in the way of major repairs for several years but with an older building the repairs are ongoing, though built into the budget. Good research to see both new and resale condos.

What about a loft?

They are fabulous spaces with soaring ceilings and often open ductwork and steel beams and seem to do very well on resale. With "new" and resale lofts, they are often former commercial spaces. Sometimes the building is a combination of converted commercial space and new build. If it's the original commercial space just make sure that the sound-proofing is okay. But very little deters the loft buyer!

So whether it's a new condo, a resale or a loft, enjoy the process and make sure you buy what's best for you and what best suits your needs! It's very much a personal choice....