Special considerations for Saskatoon condo buyers

When you purchase a condominium you’re buying more than just a home. You’re also purchasing shares in a corporation which is responsible for managing the affairs of the property. Your “share” of the corporation is normally based on the size of your condo unit, as a percentage of the whole. These shares are often referred to as a “unit factor.”

Of course, you enjoy exclusive use of your condo unit and pretty much everything that goes on inside of it, including improvements you wish to make are your responsibility and are done at your discretion provided these things do not contravene the Bylaws of the Condominium Corporation.

In addition to implementing and enforcing Bylaws for the condominium, the corporation is responsible for setting budgets, record keeping, maintaining adequate insurance on the building and other improvements and maintaining the property. Each unit owner makes a monthly contribution, based on their unit factor, to cover expenses incurred by the corporation. In most cases, some money is also collected and set aside for “reserves,” which will generally be used for unexpected expenses and expenditures which are not included in the general operating budget. Like any other property, major expenses are incurred when a roof needs to be replaced or a boiler system fails. Generally, these items are paid from reserves. If the reserve fund cannot cover the expenditure unit holders are called upon to make up the difference through what’s known as a “cash call.”

Just like companies which operate in the market place, some condo corporations manage the affairs of their property better than others. As a prospective buyer, you owe it to yourself to make certain that you have a reasonably good idea of what you’re getting yourself into. The doctrine of caveat emptor or buyer beware applies as much to condos as any other type of home and prudent buyers take appropriate actions to protect their interests.

If you offer on a condo unit through a REALTOR® some actions have already been taken to help protect you. All real estate registrants are required to use mandatory forms as directed by theBylaws of the Saskatchewan Real Estate Commission. One of those forms is called a Schedule “C” Special Terms for Contract of Purchase and Sale of a Condominium Unit. This form, when completed by a buyer and accepted by the seller, binds the seller to provide you with various documents within 10 days of acceptance. You may review these documents and if you are concerned about anything you discover to the extent that you wish to cancel the agreement, you may do so by serving written notice to the seller of your intention to rescind your offer. That written notice must be delivered to the seller within 5 days of receipt of the documents.

The Schedule “C” requires the seller to provide the buyer with the following documents:

  • the current Bylaws of the Condominium Corporation;
  • the latest financial statements of the Condominium Corporation and the last audited statements;
  • the current policy of insurance;
  • any current management agreement regarding the Condominium Corporation;
  • the current recent budget of the Condominium Corporation;
  • written confirmation of parking/storage facilities and exclusive use areas included in the purchase price, any related costs or charges and any special rules regarding those areas; and
  • a current Estoppel Certificate issued by the Condominium Corporation pursuant to the regulations of The Condominium Property Act, 1993.

 In my next post, I’ll go a little deeper on these documents, explaining what the purpose of each is and what steps you may take to protect yourself.

Norm Fisher
Royal LePage Vidorra

Premium Saskatoon houses sell while market is still at work

I did a routine search of today’s MLS® listings at about 4:00 pm. There are two new listings showing up in all of Area 1, which for Saskatoon real estate agents includes all neighbourhoods which are East of Circle Drive East. Both of these new listings are in Briarwood. One is priced at only $248,000; the other at $419,900. This small number of listings comes as no surprise. It seems to be the way it has been lately.

Meantime, the number of potential buyers continues to mount. There are plenty of motivated buyers waiting in the wings for these types of premium homes. One of those buyers is certainly prepared to pay more than anyone else for one of these two homes. At least, that’s pretty much how it works in most cases. The only problem is, both homes are currently sold, pending unknown conditions. At the time I write this blog, neither listing has yet found its way to MLS® Online. The listings will appear there tomorrow, a day late and a dollar short.

Of course, the question running through my mind is, how much money did these sellers miss out on by accepting an offer before most of the market could even get away from work? This, we’ll never know. Perhaps they somehow managed to connect with that buyer who was willing to pay the most, but I doubt it. Why would anyone accept an offer before the market knows their house is for sale? To me, it’s simply mind-boggling. Any thoughts?

Norm Fisher
Royal LePage Vidorra

Understanding the Saskatoon house price puzzle

If you read the story in today’s Star Phoenix titled, “City housing price surges: Average sale price of Saskatoon house tops $160,000,” you might be a little confused, especially if you’ve been reading my blog or reviewing my statistics. I’d like to make a small contribution to this discussion and add just a couple of the missing pieces.

The “year-end average figure of $160,577” which is related to “houses” in this story, actually represents the average sale price of Saskatoon homes across all of 2006.

Included in that average are condominiums and mobile homes. The average selling price of a Saskatoon house actually came in at approximately $171,000 for all of 2006.

Of course, the other potential problem with one-year averages is that they are often skewed by some old data, particularly in markets where prices are changing rapidly. Those houses which sold at a lower price at the start of 2006 tend to skew the average down and give a slightly distorted picture of what one might expect to pay for an average house in today’s market. This was one of the primary reasons that I added six-month averages to myAverage Sale Price of Saskatoon Houses page and my Saskatoon Neighbourhood – Profiles and Price Trends page. In a market which is changing rapidly, the six-month average represents a more realistic reflection of current market prices.

Having said all of that, I’ll note that the average selling price of a house in Saskatoon over the last six months is $176,153, substantially higher than you might have guessed from reading this story. Given the fact that current listing inventories are extremely low, it’s reasonable to assume that the average is closer to $180,000 at this time.

Unfortunately, I cannot provide you with a link to this story as it didn’t make the Star Phoenix website today. Instead, they feature the article, “Edward Jones at home in Sask,” which discusses the investment brokerages plan to open offices “in our community” so that new sales people can go “door knocking in neighbourhoods.” I’d like to thank the Star Phoenix for the warning.

Norm Fisher
Royal LePage Vidorra

So you want to invest in Saskatoon real estate

Saskatoon is obviously gaining a national reputation as a hot spot. There is little doubt that our city is doing well and the Saskatoon real estate market is healthy and strong showing several years of decent appreciation. At the same time, many of Canada’s major markets have been showing signs of cooling off, so of course, Saskatoon is standing out amongst them all.

Lately, there has been a dramatic increase in the number of investors who are expressing interest in adding some Saskatoon real estate to their portfolios. My strong Internet presence and high search engine visibility brings me lots of inquiries from serious, and sometimes, not so serious buyers. I’ve dealt with many email inquiries from prospective investors over the last two weeks.

I have a few tips for out of province investors which I sincerely hope will be helpful.

All successful investors which I’ve met have a preference for certain types of properties and specific goals they wish to achieve. Some of the investors I’ve encountered lately seem to be lacking that focus and express interest in everything from $50,000 condos to $50,000,000 shopping malls. It’s difficult for an agent to be effective for you when you don’t know what you want. Be open to discussing your objectives with your agent. It helps us to help you effectively.Talk to some agents on the phone. Your real estate investment is very serious business and email communications often lead to confusion. For something this important, we should be talking. If we can’t do it face to face, let’s speak on the phone. You can reach me toll-free at 1-888-978-6676.

Some of those I’ve corresponded with by email seem to have a need to impress with tales of great wealth. This kind of talk, coming from someone I’ve never met makes me want to proceed very cautiously and sometimes not at all. There are so many scams out there today that we have to be careful. Promises of big business possibilities during an initial email contact are going to be viewed with suspicion.

I’m most impressed by a few thoughtful questions. Even if you already know the answers, doing so tells me that you know what you need to know, and it gives you an opportunity to find out if I know anything. If you don’t care whether I know the market or not, it causes me to question how serious you are.

Be prepared to forward a deposit. As I said earlier, there are buyers all over the place here and most of them are ready to act when the right property comes up. If you and your chequebook are 500 miles away, we really don’t stand a chance. Having an adequate deposit in trust, in Saskatoon is the only way that you can be ready. Real estate trust funds of up to $5,000 are insured by the Real Estate Assurance Fund in Saskatchewan. If you’re dealing with a licensed broker your money is placed in trust where it’s safe and ready to work for you when the time is right.

Be prepared to conduct your transactions in accordance with local customs. Real estate is done in many ways, in many different places. Your offers will be taken most seriously if you seek advice from your agent on how things work in the Saskatoon market.

Do a little bit of research on our real estate market. Lately, I’ve been asked for things which no longer exist in this market, and people have actually been put off when I told them so. 

  • Eastside luxury homes with good rental potential priced between $150,000 and $175,000.
  • Motivated sellers who are anxious to sell at a bargain price.
  • Quality residential revenue homes which will deliver positive cash flow with a 15% down payment.

Unfortunately, none of these things exist in the current Saskatoon real estate market. If that’s what you need to meet your goals, we may as well discuss it now.

Good luck.

Norm Fisher

Royal LePage Vidorra

Saskatoon MLS listings hit record low

I just ran a search of active listings on the Saskatoon Real Estate Board’s MLS ® service. This morning, there is a total of 256 active listings including single-family homes and condominiums within the Saskatoon city limits.

Area 1 – East of Circle Drive East – 57 listings.

Area 2 – West of Circle Drive East to the river’s edge – 52 listings.

Area 3 – Downtown Saskatoon to the far North end – 28 listings.

Area 4 – Idylwyld Drive to Circle Drive West – 103 listings.

Area 5 – Circle Drive West to the West edge of Saskatoon – 16 listings.

I’m going to guess that some 40% of these listings are under contract, leaving approximately 150 homes available to be purchased. I have never seen such low levels of inventory in the 14 years I’ve been in the real estate business. Last year, at this time we had around 500 properties for sale.

This is bad news for buyers and much better news for sellers. If you’re planning on offering your Saskatoon home for sale, don’t waste a minute getting it to the market. You have a golden opportunity to break some price records, I would think.

Norm Fisher
Royal LePage Vidorra