Condominiums offer first-class amenities along with splendid building features. In the first weeks of 2020, condominiums’ sales rose to about 8% compared to last year’s sale. With the rise of sales of condos, are you thinking, “should I buy a condo?”
Buying a condo for the first time can be quite confusing, so here’s a guide to learn more about them. Read on to learn more about condos, with three expert tips and the difference between buying a condo vs. a house.
What Is a Condo?
A condo, short for condominium, is like a mix between a house and an apartment. Condominiums come in many forms: apartments, townhouses, and small homes. Owners usually share common areas such as garages, elevators, pools, and so on.
Expert Tips for Home Ownership
Buying a condo is different from buying a home or renting an apartment. You get big price tags and countless details that can confuse anyone. So, here are some expert tips to help you in the process of how to buy a condo:
1. Set A Budget and Make A Loan
Before you start your search for a condo, you’re going to need to settle your financials. Make a monthly budget with the estimated costs of your taxes, mortgage, and homeowners’ insurance. Add the total cost to your food and utilities to your entertainment and travel.
If you plan to withhold buying the condo, you need to start saving for the down payment. You need at least 5% for resale condos or 20% for pre-construction condos. If you plan to buy the condo as soon as you check it out, you’ll most likely need to apply for a mortgage.
Start by getting pre-approved by your lender. You need to present your assets, debts, income, and other financial details. Note that your mortgage won’t help you with your closing costs.
When making a budget, you need to consider paying your debts. Your debt is the ratio of all your debt to your gross income. Lenders will take a look at the ratio to estimate your level of risk to get a mortgage.
Make sure you also check your credit before checking in with lenders. A low credit score can affect your mortgage interest rate when you buy a condo. You can get help from a mortgage broker to help find the best rate.
2. Find a Condo that Matches Your Lifestyle
Always consider your lifestyle before you plan to buy a condo. You can ask help from an agent to help you find a condo, especially if you are a first-time buyer. They can also help you in negotiating a price and working through the paperwork.
Consider the community that you’re willing to stay at. Check whether the people you share the place are old, young, or a mix of both. You should check whether the condo management allows guests or pets to stay over.
Make sure you inspect the condo if you’re looking for specific amenities. A good way to consider what condo you want is by listing five things you want in the condo, like a pool or large closets. Out of the five in your list, assume that you’ll get at least two of them in a condo.
3. Make an Offer
Don’t hesitate to make an offer and negotiate with sellers. Most condo sellers start with a high price knowing that buyers will bargain them down. A good way to increase your chances for negotiation is by researching the average price of properties in your area.
Then take a look at how long the property stayed in the market. This information can help you shape your offer, especially if sellers are looking for a quick sale. Calculate 4% to 7% below the stated price to start your negotiations.
If the seller doesn’t accept your offer, then give a counteroffer. Have an agent help you with the official offer stating the negotiated details. This includes the earnest money, official agreement, and closing dates.
Buying A Condo vs. House
Condos are smaller, but you’ll be a lot closer to your neighbors. Houses have neighborhoods, so you’ll have more privacy than a condo. To further answer your question on should I buy a condo, here’s a comparison between a condo and a house. However, if you aren’t considering buying a condo yet, with companies like Rentberry, you can find condos for rent without an agent, and be sure that your deal is safe and secure.
Ownership and Maintenance
Homeowners have control and the right to do anything on their property. You also have to maintain everything on your property, such as the grass, leaves, snow, and so on. It’s your responsibility to maintain and repair your house from the interior to the exterior.
Condo owners have limited control when it comes to home maintenance. You’re not allowed to extend, renovate, or do anything that may change the house’s structure. The homeowner’s association maintains the exterior of the condo.
The prices of houses all depend on the neighborhood. The properties in suburban areas are usually cheaper than those in a city. Condos are about $10,000 cheaper than houses, excluding mortgage and maintenance fees.
Security and Privacy
Condos are smaller units and part of a community, meaning you’re closer to your neighbors. You get to interact with your neighbors since condos tend to attract people with similar backgrounds and interests. Security is tighter in condominiums with security personnel and CCTV cameras.
Houses have neighborhoods, which means that you have privacy. It’s your property, so you can do whatever you want while keeping other people out. Depending on your neighborhood, security policies can change and differ from condos.
Since you own the house, you can add your amenities. However, newer houses already have amenities such as pools and playgrounds.
Condo owners are usually entitled to shared amenities. This includes swimming pools, fitness gyms, park areas, and so on.
Should I Buy a Condo?
Now’s the time to finalize your answer to the question ‘should I buy a condo?’ Buying a condo needs many moving parts and processes, but remember the tips stated above to make the process easier and cheaper. We hope you enjoyed reading our article on condos.
Do you want more tips on how to buy a condo? Consider taking a look at our other guides today!