10 Mistakes to Avoid When Purchasing Your First Condominium
Making the decision to purchase a condo is both exciting and daunting. Having a place to call your own and having the ability to decorate your space however you wish is a great amount of freedom for many people. However, condos are no small investment with the median sales price reaching $319,000 in the last year alone. Considering this large price tag, it’s important to avoid a number of common mistakes that can ruin your experience before and after purchasing a condo.
What is a Condominium?
As opposed to a detached house or even a townhouse, a condominium is an individual unit that is owned privately but resides within a group of other units. This grouping of units can be just a small handful, or it could be an entire skyrise building. If you think this sounds similar to an apartment, you would be correct. The primary differences between a condo and an apartment are that condos tend to be multi-floored and can be purchased, whereas apartments are usually single-levels and only for rent.
Buying a Condo vs. Renting a Condo
When looking to get a condo of your own, the first question you will be faced with is whether to buy a condo or to rent a condo. While renting a condo can seem enticing as you aren’t locked into a location for 15-30 years, the long-term cost will be less if you purchase. Additionally, you can build equity in your purchase with every payment you make on the loan you take out to buy the condo.
The other consideration to keep in mind is that prices for condos will fluctuate based on location. For example, Adelicia Nashville condos for sale will not have the same prices as New York City, New York condos. Higher prices may deter a potential buyer initially, but the long-term benefits will almost always outweigh those for renting. On top of this, the average down payment for most condo loans is only 3% of the total cost, which is far less than that when purchasing a home.
10 Things to Avoid When Making Your Condo Purchase
After settling on a condo that you really enjoy, or even if you haven’t found one yet, there are 10 mistakes all potential owners should avoid:
1. Waiting for the perfect moment to buy
So many potential buyers looking to invest in property, whether that be a condo, house, townhouse, or something else, are obsessed with finding “the right time” to make their purchase. Whether that be waiting for economic conditions to stabilize or hoping the price will be lowered for a specific unit, the truth is that there is no best time to buy. If you are in the financial position where you can afford the purchase, it can be the right time.
2. Continuing to rent because it seems cheaper
Oftentimes, long-term renters will hold off on making the switch to purchasing because they have become accustomed to paying their monthly rent. The idea of a loan payment can be daunting as it can come with a slightly higher cost. However, loan payments will eventually end, but if you continue to rent then the payments will never cease.
3. Getting scared away by the economy
Fluctuations in the economy can drive many potential condo buyers away. The fact of the matter is, however, that economic fluctuations do not go away overnight. If prices are high right now, they likely won’t fall for at least a year or more, and it’s not a guarantee that they’ll fall. When you are in the financial position to buy, don’t waste any time.
4. Not checking the condition of the unit with your own eyes
One of the biggest mistakes potential condo owners make is failing to inspect a unit with their own eyes. While pictures may make a unit look fantastic, they tell you nothing about what’s just out of frame of the camera or what the community really looks like.
5. Purchasing a unit in a building with massive legal drama
The last thing any new condo owner wants is to get involved in a massive lawsuit and drama between either individual in the community or the community and its individuals. This could lead to unnecessary drama that requires your attention shortly after moving in, or a hostile environment that you aren’t looking for.
6. Not inspecting the grounds of the property
Your condo is only one part of the equation when joining a property. You should always take a walk around the grounds to see what the community looks like and to get a feel for who your neighbors would be.
7. Not verifying whether parking is included with your purchase
Parking can be quite expensive if it is not included with your unit. In some cases, you may be paying as much as $250 or more on a monthly basis for a parking spot that might not even be attached to your unit. Check whether this cost is included with your condo purchase.
8. Not asking around to understand what the community is like
While seeing the community with your own eyes is a great start, the people who live in the community will be your best resource. Take the time to speak with people you see around the property and ask how they enjoy the area and their unit. This can also help you see if the units are built with any issues.
9. Not submitting for prequalification or a preapproved loan
When applying for financing for a condo purchase, consider submitting for prequalification so that you can see the interest rate you would be offered. You can then compare this rate to other offers that come through in order to see what the best rate will be.
10. Overspending on your previously set budget
When you set a budget for your condo purchase, it’s best to stick to the price you set. While paying slightly above asking to be competitive may be required, don’t stray too far from your original budgeted plan.
Select the condo of your dreams
When purchasing your condo, it’s easy to get wrapped up in the excitement of having a place to call your own. While this is a great accomplishment, every potential condo owner should be aware of what they are buying. This means looking at more than the unit itself, and requires taking the community, financial aspects, and more into account.
Avoid making a purchase you’ll regret in the future and take the time to scout out your new condo and the surrounding areas before signing the papers. This will help any prospective condo owner ensure that they will be satisfied with their purchase for years to come.
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