A two-bedroom co-ownership apartment in Toronto recently sold for a little over $400,000, a price that might sound appealing in the city's pricey real estate market. This deal, however, comes with a catch that potential buyers should be aware of. The concept of co-ownership, which is different from the more common condo ownership, may bring unexpected challenges.
In co-ownership arrangements, buyers own a share of the entire building rather than having a separate title for their specific unit. This means that all owners share responsibilities for the property, which can lead to complicated decision-making processes. For instance, if major repairs are needed, all owners must agree on how to handle the costs and the work involved.
Additionally, financing a co-ownership can be more difficult than a traditional condo. Banks and other lenders often see these arrangements as riskier investments. This means that securing a mortgage might require a larger down payment or come with higher interest rates. Potential buyers need to be prepared for these financial hurdles before committing to a co-ownership property.
Lastly, resale can be tricky. The market for co-ownership units is smaller, which can make selling the property more challenging. Prospective buyers might be wary of the shared responsibilities and the complexities involved in co-ownership. While the initial price tag might be attractive, the long-term considerations could make this type of property less ideal as a starter home.
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