First Time Buyer
Condominiums are a good way to get into the housing market if you can't afford to buy a house or prefer this type of lifestyle. Condos are also great if you don't want to spend a lot of time doing yard work or maintenance.
One important thing to remember about a condominium is that you don't actually own the unit you live in nor the lot.
You own the air space inside the walls, ceiling and floor of the unit.
With a townhouse you own the unit along with the lot.
Owning a condo, you are restricted from adding a room, painting the exterior or changing the landscaping.
When you buy a condo you are also joining a homeowners' association which is responsible for the maintenance of the units, insurance, garbage and outdoors areas. The monthly HOA fees may seem high at first, but owning a home will have similar costs over a same period of time.
What to Consider when Buying a Condominium
Ask owners in the complex what they like and dislike about both the unit and the complex.
How good is the sound proofing? End units and upper units generally sell for more when sound comes into play.
How is its location in the complex. Next to an access street, parking facility, pool?
Look for units that are not adversely affected by these.
Stay away from predominantly rental condo complexes, those having more occupants that are renters. They are often poorly maintained as absentee owners usually vote against improvements and increases in maintenance fees.
Many lenders will not make loans if the percentage of renters is high compared with owner-occupants.
Compare monthly association fees with other similar condo complexes and what amenities are included.
Find out if any increases in fees or special assessments are planned.
Is the condo homeowners' association in good financial condition. Before making a purchase offer, obtain the latest financial statement from the homeowners' association.
Are there any lawsuits between the homeowner association and the builder?
Who manages the complex and how well are the common areas maintained.
Check to see if there are any unusual bylaws, rules or CC&Rs. A good complex generally is a result of restrictions of pets and rentals. Read all papers carefully.
Buying in a New Complex.
Find out how many units are sold and closed. Don't be one of the first buyers.
Its better to have 60% of the condos sold before you close your purchase.
If the units don't sell or the developer goes bankrupt, you may end up owning much less.
Make sure a warranty is provided for one year on everything in the unit.
It is important to know exactly what your developer will warrant when buying in a new complex.
How do Condos Compare to Single-Family Homes?
Based on appreciation, condominiums in some areas have been as profitable an investment as single-family homes in the last five years. In some markets, condos appreciated even more.
Problems with Condominium Associations, are Condos a Bad Investment?
Despite problems in many associations, condominiums have done a good job of holding their value. Real estate experts say that the reason there are more stories about conflicts in associations is the proliferation of homeowners' associations.
Condominium associations involved in lengthy and expensive litigation may find that such disputes will hurt resales because some lenders are reluctant to make home loans on units in their projects. However, experts argue that many disputes today are resolved more readily without initiating legal action. In addition, the condominium community has worked hard in the last few years to overcome image problems that were brought on by disputes and lawsuits among condo owners and developers.
Associations today are becoming more sophisticated about property management and are taking steps to prevent legal problems and disputes.
Buying a condominium is still an excellent way to start home ownership
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