Buying a Condo MISTAKES | 5 Things to Avoid When You Are Purchasing A Condo
How to Buy a Condo
Buying a condo can be an intimidating experience, especially if you are a first-time buyer. Learning a few tips on how to buy a condo can help you approach the process with more confidence, and save you a few bucks in the long run. Do the prep work, plan well, and before long, you'll be closing on your new condo!
Preparing to Buy a Condo
Get pre-approved for a loan.Before you can even begin searching for the right condo for you, you have to know what you can afford. A trip to the bank will not only give you the financial details you will need to proceed in purchasing a condo, but also establish a reasonable budget for your income level.
- You may want to consider visiting more than one financial institution in order to get the best interest rate on your loan. A little legwork in the beginning can save you a lot of money in the long run.
- Do not mistake pre-qualification with pre-approval. Your pre-qualified amount is not a guaranteed amount, but this must be done before your finances are more thoroughly investigated and you are pre-approved.
Use your pre-approved loan amount to your advantage.Now that you're pre-approved, you should have received a conditional agreement in writing from your lender. This indicates that you are one step closer to obtaining an actual mortgage, and will give you bargaining power when dealing with property sellers.It will also define the upper limit of what you can afford.
Research ideal areas.Spend some time to scope out the area of a few places you really like. Pay attention to traffic patterns, proximity to major area attractions, grocery stores and any other factors that may be either appealing, or unappealing, to you and your family.
Search actively for homes in your ideal areas.This is especially important if you choose to forego using a realtor. Finding you potential listings that might be a good fit is the primary purpose of a realtor, but instead of hiring a realtor you might:
- Subscribe to a real estate magazine
- Check online listings, like Craigslist and zillow.com
- Page through local newspapers, which may have listings
- Peruse neighborhoods you would like to live
- Search real estate websites online, which frequently maintain a database of homes for sale
Attend open houses.Once you have narrowed down your choices to a short list, find out when the condo will be available for viewing. Often there are scheduled open houses, but you may have to contact the seller to set up a separate viewing. Take your time going through the condo and make special notes of pros and cons.
- Take along a notepad to help you remember what you liked and didn't like about each condo you walk through.
- Ask questions about what types of condo fees are associated with the complex. Although condo communities come with the conveniences of provided upkeep and other services, these benefits also come with a price tag.
Inquire about Home Owner Associations (HOAs).If your property is included as part of a community HOA, you will need to pay a monthly fee to maintain common areas (landscaping, pool, playground, fitness area, etc.).This fee should be included in your pre-qualified amount.
Choosing a Potential Realtor
Do your homework.The right realtor can make the process of buying a condo much easier, but the wrong fit could end up costing you time. Ask your agent to provide a list of previous clients with contact information and who on that list might be pleased or disappointed with the realtor's performance.
- A question to consider while contacting your realtor's previous clients: what was the asking price and sales price of the property? This is a good gauge of how hard your realtor will work for you.
Look up licensing.Each state/province you live in should have boards that license and discipline real estate agents. While inquiring with you local realty regulatory agency, check to see the status of your potential agent's license and whether there has been disciplinary actions or complaints.
Evaluate your realtor's certifications.Real estate agents specialize in different kinds of property sales. Even among generalists, you will likely find your agent has additional training in some areas. The three main credentials you will have to evaluate are:
- CRS(Certified Residential Specialist): has completed additional training focusing on residential realty.
- ABR(Accredited Buyer's Representative): has completed additional training representing buyers in a transaction.
- SRES(Senior Real Estate Specialist): has completed additional training helping buyers and sellers above the 50-year age mark.
Check your potential realtor's current listings.There are two main places you might find current listings: your agent's or agency's website AND realtor.com, a website that complies with Multiple Listing Services.
Hire a realtor to advocate for you.Although you can purchase a condo without the help of a Realtor, the process may go smoother if you enlist the help of an expert. He or she will be able to help you quickly find condos that meet your needs as well as keep you apprised of newly listed condos that may be right for you. The Realtor will put the time and effort into your condo buying search so you won't have to.
Closing on the Condo
Make an offer of the condo.Sellers purposefully choose a listing price they know will be countered. Place your initial offer, but be sure it is reasonable. If you place the bid too low, the seller won't take you seriously. But, if you don't go low enough, you might end up paying more for the condo than necessary.
- Don't be afraid to bargain during this step. In some cases, closing costs can be negotiated as part of your offer.
Review any counteroffer.When you are made a counteroffer, it will tell you a great deal about whether the seller is willing to negotiate or if they are going to be firm in their asking price. If the seller appears unwilling to negotiate the price, inquire whether there are other areas, like closing costs, processing fees, etc., where the seller might be willing to make a concession.
Sign the contract for sale.Once all relevant parties have signed the contract for sale, you will generally have to wait for an attorney to review the contract and any changes made to it. When both sides are pleased with the state of the contract, the attorney review will be complete.
- A few days after the seller has accepted your offer, you will usually have to pay earnest money (also known as a good faith deposit). These funds will be put toward your down payment, but if the deal falls through, you might not be able to reclaim this money.
Await your closing date.The closing date is rarely set in stone at this point, but will give you a basic idea of when the sale will be finalized. In many cases, you will have to forward a check through to the seller's attorney for the balance and initial deposit.
- You can use this waiting period to begin inspecting the property and applying for and completing your mortgage paperwork.
Track inspection.If you do not perform your inspections by the inspection contingency date defined in your contract, you might waive your right to an inspection or mortgage.All inspection reports should be forwarded to the seller and closing credit can be negotiated for necessary repairs. When you are firmly committed to the purchase of the property, you will need to order title work to verify the property is free of liens or other claims.
- The status of your mortgage should also be watched closely. Shortly before you close on your condo, you will need your lending institution's mortgage package. Some agencies might operate on an closing estimate, paying up-front with the difference refunded after the closing is finalized.
- A certified bank check is often required at closing. Ask your agent, lender, or the seller of the property which form of payment is best for your situation.
Perform your final walk through and forward necessary information to your lender.Make sure that all previously discussed issues have been taken care of and that no new issues have cropped up. At this point, you should receive survey certification, review of title, and other pertinent documentation for your lending agency to complete your mortgage.
Finalize the sale.Now that necessary mortgage information has been completed, the seller and potential legal consul will sign the final documents and complete any remaining financial exchanges. The deed will then be forwarded to either you or your agent.
- Title work should be sent to your bank for a final review.
- Pertinent deed and mortgage information will need to be sent to your county registrar to formally record the sale.
Follow applicable closing instructions.Now the closing date should be set, and your lender should have included instructions on how to proceed and final inspection information. Depending on your situation, this final leg of your journey can take up to three months. Once the county has recorded and forwarded all necessary information to involved parties, you will close and can begin moving in.
Pay closing fees.These will vary according to your agent, agency, and location. The estimated cost of closing is about 2.3% of your purchasing price.Some common fees associated with closing on your condo are:
- Title work
- Escrow fees
- Condominium capital fees
- Survey fees
- Loan interest
- Filing fees
- Courier or mail fees
Close on your new condo.Now that you've closed you should have your keys and can begin moving in to your brand new condo!
QuestionIs there homeowner's insurance that is specific for condos?
VP, CAPITALPlus MortgageVP, CAPITALPlus MortgageExpert AnswerYes, there are two types of insurance that primarily cover condos. First is the "walls-out coverage"; this is obtained by the condo association and paid by your monthly dues. This policy covers anything from the walls out, like windows, the roof, the building itself, etc. Then you have the option to obtain an HO6, or "walls-in" policy. This you will pay yourself and covers all of your personal belongings inside the property.Thanks!
QuestionWhat are questions to ask for HOAs for condos?
VP, CAPITALPlus MortgageVP, CAPITALPlus MortgageExpert AnswerAsk to see the budget, and pay special attention to special assessments and reserves. Ask when the last special assessment was and when they anticipate the next one to be.Thanks!
QuestionWho will do the paperwork if I buy a condo in another state?wikiHow ContributorCommunity AnswerIf you buy a condo in another state, your paperwork will be handled by a state-licensed real estate broker in that state.Thanks!
How long does the process take?
Approximately how much does a condo cost?
In how many days will I get my condo key?
To buy a condo, first research locations to figure out where you want to live. When you’ve decided on an area, look at condo listings, and go to open houses for properties you’re interested in. Consider hiring a realtor, who can help you identify condos in the neighborhoods you like. Also, talk to your banker about getting pre-approved for a loan so you’ll know what you can afford. If you find a place you like, make an offer, then be prepared to review any counter-offers you may receive before you reach an agreement on a final contract.
Video: 7 things you need to know before buying a condo
How Exercise Changes the Way You Eat
Reasons your pay isnt going up
LumenArt Alume 2-Light Accent Wall Sconce AWL.14 AWL.14.ASC
How to Deal with a Passive Aggressive Mother
Christmas Glitter Makeup Tutorial
New Potatoes with Garlic and Herb Mayonnaise Recipe
How to Roast Sunflower Seeds
Pierre Hardy x NARS Summer 2013 Makeup Collection
How to Pack a Lunch Box
8 Things You Dont Know About Calories
Fast Fried Rice