Did you know that over 70 million Americans lived in condominium communities in 2020? While buying a condo is often a great investment, knowing the right condo shopping strategy is key.
So what are some common condo buying errors? What are some things you should know when weighing different options for condos? That’s what we’re here to look at today. Read on to find out more about different things to avoid when buying condos in 2022.
Who Should Own Condos?
While the prospect of living in or owning a condo might seem attractive, it’s not always for everyone. In most cases, people who live in cities are often the most likely to invest in a condo. This is because a lot of condos are built in densely-populated urban areas. You see a lot of condo buildings built in downtown areas that are near stores, grocers, and other amenities.
There are also organizations that make sure the right type of homeowners are living in their condos. The Homeowners Association (HOA) is a big part of condo ownership. The HOA makes sure that all condo owners comply by a set of covenants, conditions, and restrictions, or CC&Rs. If someone isn’t reliable to abide by those rules, then they’re probably not fit for condo living.
Benefits of Owning a Condo
Those whose lives are fit for the condo life are usually people who don’t have enough capital to afford a regular home. Condominiums are known for being more affordable than your standard single-family home. That’s why younger people opt for condos, as it’s a good way to own a home without having to shell out for a house. Older people looking for a relaxed but affordable living option also opt for condos.
Condos are also more manageable than larger houses due to their size. It also provides a good sense of community with other condo owners while also putting you close to the city. Common condo amenities include security, reliable insurance, and maintenance services. Getting the right condo, however, comes down to having all of your approvals in order beforehand.
1. Not Getting Loan Preapproved
Financing is one of the key factors when it comes to condo ownership. A lot of prospective owners move straight into purchasing a condo without getting the right pre-approval done first.
This leads to increased stress and maybe even financial troubles down the line. As such, it’s a good idea to meet with a mortgage broker or another professional beforehand. Doing so saves you a lot of stress beforehand. Getting a pre-approval gives you an idea of how much you can spend each month before you actually start living in your new condo.
2. Forgoing Proper Representation
People shopping for condos often forgo legal representation before closing a deal on their new property. This is ill-advised, as you’re basically the only one looking out for your own interests when buying a condo.
Getting an attorney to review your situation and all other relevant documents is key. They’ll take your interests into account and lobby for you during the closing stage.
3. Proper Location
Aside from all the paperwork and getting the right approvals, choosing the best possible condo in the right location is just as key. It’s easy to choose a nice-looking condo, but you need to choose one that’s good geographically.
Are there proper amenities nearby? Do you have access to transportation, grocers, gyms, and anything else you need? Doing this research is crucial especially if you’re looking for a long-term living option at your condo.
4. Not Checking CCRs
We mentioned conditions, covenants, and restrictions as they related to HOAs, and they’re definitely worth re-stating. These are rules you need to abide by if you’re living in a new condo.
Failing to check and understand CCRs is going to cost you if you aren’t careful. Many prospective condo owners don’t check their CCRs beforehand and run into trouble once they’re moved in.
5. Buying a Condo For Looks
Most people want to live in a nice-looking house, and there are plenty of good-looking condos to go around. That said, looks shouldn’t be the only thing that determines whether or not you close on a deal.
This negatively affects naive condo buyers when they purchase a condo on looks alone. A condo may look nice from the outside or from pictures, but it might not have all the amenities or functions that you need.
6. Not Getting Insurance
You never know what might happen once you’re moved into your condo, such as not being able to make certain payments. Mortgage insurance is crucial in these situations, but not everyone knows that.
Not getting mortgage insurance could put you in a financially dangerous spot, so it’s important you secure a policy before buying a condo. It’s not mandated in many cases, but it’s a great security blanket just in case.
7. Agreeing Verbally
Verbal agreements don’t secure a condo purchase. Getting everything in writing, having it reviewed by realtors and attorneys, and officially signing off is the only way to go.
8. Going in Without Tours
Some people buy condos without having seen the property itself. This obviously causes some issues down the line since it gives way to a lot of unforeseen issues that could’ve been spotted during a tour.
Always take time to look at a property before even considering a purchase. This also lets you compare condo costs so you know you’re making the right purchase.
Always find reliable organizations when looking for properties. Groups like New Era Group are great places to start.
Understanding Condo Buying Errors
Buying a condo can be tough since these properties are often framed as being hassle-free compared to other homes. Use this guide to spot some of the most crucial condo buying errors and make the right purchase today!
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