In the vast majority of instances, our opinion is that they are ABSOLUTELY necessary. There is sometimes a buying-public mindset that modern day warranties (primarily the '2-5-10' New Home Warranty program) and the fact that a building is 'new', has been built in accordance with modern-day building codes, and has satisfied all municipal permit processes, renders getting an inspection unnecessary and/or redundant. However, these codes and warranties, while generally ensuring a building and home is safe, habitable, and functional, do not address many factors which should be of importance to a buyer of such an expensive, large investment as a condo, and the building it is in. These factors include, generally, such things as quality of workmanship, integrity of materials and finishes, and construction deficiencies that a non-inspector may not recognize.
The process of buying a new condo does include that a legislated (Residential Development Marketing Act) 'deficiency walkthrough' inspection be conducted by the buyer and a representative of the developer prior to completion; this is an opportunity for a buyer to identify any deficiencies within the unit, and the developer must agree to rectify all discovered deficiencies prior to an agreed upon date. There is no legislated requirement for a buyer to have their own representation present, and as such, developers and their marketing departments will generally not encourage or recommend that a buyer seek this. Therefore, it is up to a buyer to be aware that they do have the right to request that they have their own representation present, and that this representation be an inspector of the buyer's choosing who will review the unit as well as the building. We believe that any prudent buyer should do this, and that such representation should be a qualified and experienced Professional Home Inspector, specifically with experience dealing with developers and deficiency lists. Generally, developers are very professional and reasonable, and will go to great lengths to rectify all discovered deficiencies; the key word to note here is, 'discovered'!
We have built up a significant frame of reference from having sold many new homes over the years. Here are some examples of what we feel a professional inspection can greatly help a buyer be aware of;
In more instances than not a best-case scenario enfolds, wherein the developer has done an excellent job, and nothing serious is found that couldn't have reasonably been discovered by a prudent, diligent buyer over the course of a deficiency walk-through. In those cases, an informed 'benchmark' is created, and peace of mind is usually GREATLY increased. In rare instances the worst-case scenario can develop, where truly poor construction can be pre-emptively identified that, without a strata's awareness and pro-active investigation, may not have been discovered until consequences (damages incurred, conflict with the developer) are endured. The middle ground is that it is quite common for items to be discovered that may not be discovered until warranty periods have long expired, may never be discovered, or are only discovered by the next buyer's inspector upon sale of the home. Also, certain deficiencies in the building are sometimes identified that can be brought to the strata's or developer's attention immediately by the buyer once they become an owner, giving the strata a head-start on pro-active warranty and deficiency management with the developer.
In a nutshell, there is definitely value to getting an inspection done on a pre-sale; think of it as very (relatively) cheap insurance and peace of mind.
'Trust', IE familiarity rather than credentials, experience, or referrals, is quite often the ONLY qualifying criteria buyers will use when selecting a buyer's agent. Buyers also often don't take the selection of a realtor nearly as seriously as a seller does; they SHOULD. The realtor fees are paid from the proceeds of the sale, and while the seller's agent and seller largely ‘set the fee' that will be split roughly evenly between the seller's and buyer's realtor, the funds come from the buyer. So, in essence, both buyer and seller are ‘splitting' this cost. The point here is that buyers need to, for many reasons, QUALIFY their prospective agent and ensure they're confident they're going to get good value for the services provided. It's usually easy to find a real estate agent; it's identifying a good one that is the right fit for you that is a bit more challenging.
I recommend interviewing at least 3 for the job, and finding them by cruising some open houses in the area you wish to buy in. Observe them first, and if you find their demeanor appealing, ask them about the building or property, the area, etc.., but perhaps without letting on you're ‘realtor shopping'. Once you've identified your 3 ‘prospects', call them and invite them for a coffee or see if they'd like to meet you at their office. In about a 20-30 minute ‘interview', you should find out about their experience level and knowledge of the area, get a feel for whether they are more about ‘you' or more about ‘the deal', and also ask them how they get paid. They should go out of their way to make sure you know what to expect and when, find out if you have the best mortgage rate, and educate you in general. You want to feel a good personal connection, and also feel they are professional and have your best interests at heart.
Regardless of how you do get introduced to or ‘find' a prospective realtor, DO put them through the interview process! The substantial professional fee that you will put in their pocket is more than worth it if they protect your interests, make sure you understand the value of what you're purchasing, and overall create a confident, comfortable experience for you as you spend hundreds of thousands of dollars on likely your biggest
This question gets asked often, and two factors must be addressed when answering it; sales activity, and the direction of prices in relation to this activity.
In 2012, buyers mostly sat on the sidelines for the latter two-thirds of the year, waiting for sellers to lower their prices. Sellers didn't budge much and stayed patient, and buyers did not often try to write lower offers and negotiate. As a result, activity dropped dramatically, but prices did not drop (in most segments), at least not nearly as much as such a drop in activity would indicate. For example, the REBGV recorded the slowest September (total number of sales) in 28 years!!
Currently, the market has largely acknowledged that buyers are in the driver's seat, and will likely remain so for a while. What we are finally seeing in the market place is that buyers are now writing offers, and not being shy with their offer prices. Some sellers are lowering their asking prices as well. Since last spring, prices have generally come down slowly but steadily by about 10% to 15% in some segments. Currently, buyers seem tired of waiting, with many feeling that this is either as good as it gets, or close enough to it to 'pull the trigger'. People always need to move, and what is now pent-up inventory is bound to come on the market as we get into spring, with buyers waiting for it. We feel activity will most likely pick up, and if sellers are willing to negotiate or price themselves within range of current sales, then prices will level off, as demand and supply will balance out. This is the forecast of most experts, and we tend to agree, based on our 'on the street' observations and gut feelings. It's not likely that we'll see an increase in price in any segments, and if so, it will be minor. However, if sellers hold out or buyers demand discounts that are too much, than inventory will increase, activity will decrease, and we may be headed for more of a dramatic drop later in the year.
So, is the market picking up? Activity and number of sales, yes. Prices; it's just too early to say, ask us again after Easter
The general reason that these regulations have been introduced is to standardize how stratas budget, and pay for, long term inevitable expenses such as roofs, plumbing, envelope repairs, etc., etc.. It also establishes and addresses asset inventories, cash flow models, record-keeping regarding storage lockers and parking, and other issues that to date have been the cause of endless conflicts and problems for stratas and their members/owners.
To date, the strata act mandated that stratas maintain a contingency fund, and perform some generally loose standardized budgeting. So, some stratas would elect to have higher fees and maintain a very large contingency fund, accessing this fund when issues would arise and thereby limiting the need for ‘surprise' levies or assessments. Others would elect to have low fees and a minimal contingency, levying/assessing as needed. Also, many stratas, until a majorly expensive issue would arise and ‘sting' them, would not participate in in-depth long-term budgeting or expense forecasting. As many of these planning or budgeting decisions would often be made by the council members with minimal participation from other owners in the strata, when an issue would finally arise that demanded serious financial participation from all owners, conflicts would happen.
In our opinion, these reports and their mandatorily legislated nature is a good thing. Transparency will be greatly increased for buyers reviewing documents and doing their diligence, many sources of confusion and conflict within stratas will be eliminated, and accountability between owners and their councils will be increased. Yes, fees will generally rise for most stratas that do not have this type of budgeting in place already (many new stratas already have ‘capital plan' budgeting in place). However, if one were to, based on typical current strata financial practices, amortize (for example) 30 years of fees and special assessments back down to a monthly fee, one would quite likely find this monthly amount to be considerably higher. While many owners may prefer to have lower payments and pay for projects ‘as they happen', the more practical (and certainly more ‘peaceful') route is to diligently budget long-term.
The adaption will be somewhat painful as BC stratas phase these reports in, but as a frame of reference, strata fees here are generally considerably lower than in many other provinces where such budgeting is already in place (EG, Toronto has much higher fees on average).
Follow this link to a very comprehensive informational piece