First time condo buyer needs advise!

[jewelerman]

Good day fellow forum members!,
So im in need of advise from anyone who has gone through the process of buying a condo(or home for that matter!).I'm a late bloomer when it comes to buying real estate, but right now with the low interest rates and the large amount of short sales on condos in my area i think its the right time to take a serious look at buying for the first time.I am very interested to hear any suggestions,stories or advise about what you learned about buying a condo(or real estate) and what questions to ask and what needs to be considered while in the process of picking an agent, buying a short sale,dealing with HOA fees and the condo community rules,bank loans,making an offer, how not to over pay, how to pick a property,decorating a smaller space.Right now im thinking i want at least a 2 bedroom 2 bath in a newer building(there's alot of short sales in building built after 2000)I'm very excited but at the same time this can seem a little over whelming to a first time buyer so your input is really appreciated!I want to hear the good,the bad ,and the ugly of your buying experiences!Thanks!

 

[mary poppins]

Check the condo rules and regulations to make sure you can live with them.

Check the books and records to see if there have been any problems in the building. If so, what kinds of problems were or are they?

In addition to condo fees, are there currently any special assessments or anticipated special assessments?

Some states periodically require inspections of condo buildings and property (for example, I think Florida may be 30 years). Is the building you are considering due for an inspection soon or within a few years? If so, special assessments may result from any problems that need to be fixed as a result of the inspection. Does the association have sufficient reserves?

Pay attention to whether owners may rent out their units, and if so, when and for how long. What percent is owner occupied rather than renter occupied? It's good if you want flexibility to rent the property or have the option to do so. On the flip side, if you're not interested in that, rentals could reduce the value of the property as renters typically don't take care of the property as well as owners do.

If you're looking at short sales, consider how many other short sales or foreclosures may be in the building as it is also indicative of people being in arrears on their condo fees. People who can't pay their mortgage likely aren't paying condo fees either. Specifically ask about how many people are delinquent in paying fees. That can lead to increased fees or special assessments for the remaining owners who are current. Also would lead to condo having to expend money for attorneys fees for collection or foreclosure actions.

I don't mean to be Debbie Downer. There are actually a lot of good deals out there right now. Just gotta poke around. Good luck!

 

[chemgirl]

Everything Marry Poppins said.

Also really think if you will use extra services like swimming pool, tennis courts, gym etc. before you buy. Every extra increases the overall maintenance cost of the building. Buildings with a lot of extras usually have much higher condo fees than buildings without. This discrepancy is more noticeable with older buildings. Extras are nice if you're going to use them, and can help with resale, but might hurt the resale price if the condo fees get too high. Its all a balance.

As far as the unit itself, pay special attention to the layout, cabinet space, and closet space. Make sure there is enough room to open the fridge and drawers. I'm in a condo right now and I don't have a coat closet or a linen closet. I wish I would have thought of that before I bought. Other units I looked at had small kitchens without enough cabinets for the basics. Try to picture where you would put furniture before you buy, and look in to condo sized furniture if its a smaller space. Some newer buildings are so keen on saving space that they take away functionality.

Ask if the unit comes with parking! Its surprising how many don't and its a lot harder to resell a unit without a parking spot.

That's all I can think of for now.

 

[DivaDiamond007]

Location, location, location! You cannot (easily) move a parcel of property. If you can't live with the location of a property then pass on it and keep looking.

I would stay away from any property with an HOA; which depending on where you live may be nearly impossible. Around here older properties in established neighborhoods do not usually have them, but newer ones do. I find the idea of some un-governed, power-tripping committee telling me what I can can cannot do with MY home revolting.

When my husband and I were house shopping in 2009 we hired an excellent real estate agent and mortgage broker. We got preapproved for a mortgage before setting foot in a single property and then only looked at homes in our budget. Our real estate agent didn't try to pressure us into buying a more expensive/bigger home than we were comfortable with.

You may also want to think about how much "sweat equity" you want to put into a property. If you are not handy then remember that it costs a lot of $$ to do projects. DH and I are very lucky in that my dad is extremely talented/handy so we can lean on him for projects - laying new linoleum in the bathroom, taking out a cabinet and installing a dishwasher stuff like that. This summer we also tore out all of the old landscaping and put in new ourselves (well, my mom helped pick out new plants). If we had hired someone to do those projects for us it would have cost a lot more money and time. My next projects are taking out the ugly blue tile countertop in the kitchen and painting the kitchen cabinets. Owning a home is WORK!

Do not buy real estate as an investment. A house, apartment, condo, townhome, whatever is a place to live and nothing more. If you are looking for a piggy bank then contact an investment advisor and invest cold hard cash. Today's real estate market is a different animal than it was even 5 years ago.

In our area (NW Ohio) homes in the best school districts come with premium property taxes but higher resale value so that may be something that you consider even if you don't have children.

As far as decorating a small space...

My house is teeny tiny - a 720 sq. ft. half-cape style home built in 1949. 2 bedrooms, 1 bathroom and finished basement. 1.5 car garage with attached screened-in porch. Very typical for our neighborhood and at our price point in our city.

Our living room is a neutral taupe color and our leather furniture is a darker brown/tan. We use throw pillows, curtains and an area rug to bring in color. I'm not too into decor so we have family photos throughout our home and no knick-knacky sort of stuff. I do like Longaberger baskets but only buy them to use and not just for looks.

In a small space I say avoid too dark colors as they can make the room feel smaller and avoid over-sized furnishings/decor for the space. When narrowing down properties measure out the rooms and try to imagine how your stuff will fit into the space.

 

[jewelerman]

Thanks!!!There has been some really good suggestions made!I'm writing many of them down to discuss with the right people later on! This is a great start!

 

[centralsquare]

Everything Marry Poppins said.

+1...very well said.

 

[fleur-de-lis]

Noise. Especially if your ceiling is someone else's floor. (My colorist has been dealing with a legal nightmare with this issue for more than 6 months now.)

 

[lbbaber]

We own a condo that DH uses sometimes when working long hours.

The 3 things that stand out:
Noise
Parking
Special Assessments

Our condo fees doubled bc of a special assessment. For the next few years we will be paying aver $700/month in fees alone.

 

[iLander]

We need more info, Jewelerman. If you are buying in NY, or Ohio, or Florida, they all have different issues. Can you tell us the state?

Here's some general info; buy a condo with a "limiting factor", something that limits the amount of competition you'll have when you resell. Otherwise you will be like all the other condos, stretching to the horizon, and it will be hard to sell. A limiting factor is usually a view, or a certain desirable location (school district, waterfront, etc) or even a 3 bedroom in a 2 bedroom complex. Makes sure it's special enough to stick out in the sales listings.

Get high ceilings. These younger people hate 8 foot ceilings and carpet. They just do.

Condos are easy to fix up because you don't have to worry about buying a whole new roof or repainting by yourself. Frees up money to get rid of that carpet/formica/old appliances/ugly paint, etc.

Use realtor.com to see ALL the units for sale in one complex. Some friends of ours just spent $400K on a condo, and I didn't have the heart to tell them that most other units are selling for $200K.

Go see the more expensive units in the complex, they will give you ideas for decorating, etc.

If you're primarily looking to live there for MANY years, I have to say this; don't stretch to afford a view. I had a fabulous ocean view once, and after six months, I didn't even notice it anymore. After that, I saved a ton by staying in desirable areas, but without the view price tag, it kept things affordable for me. The area was the limiting factor that kept my value up.

 

[MichelleCarmen]

Check the condo rules and regulations to make sure you can live with them.



Pay attention to whether owners may rent out their units, and if so, when and for how long. What percent is owner occupied rather than renter occupied? It's good if you want flexibility to rent the property or have the option to do so. On the flip side, if you're not interested in that, rentals could reduce the value of the property as renters typically don't take care of the property as well as owners do.I

This isn't true AT ALL. I just moved to a HOA housing/condo establishment (detatched condos) and there is a **5 rental limit* to the entire HUGE neighborhood so they have strict guidelines that dictate the number of renters b/c of that misconception. If the renters don't keep up the yard, they are subject to issues/complaints/fines, etc. In fact, BECAUSE OF THAT, I spend more time in my yard than most of the owners. The one that looks bad is owned. Mine is improving day by day because *I* am fixing it up...the owner totally neglected it...If I wasn't a renter, I could complain to the HOA and have that OWNER with the messy yard be fined for not plucking out their weeds!

 

[jewelerman]

We need more info, Jewelerman. If you are buying in NY, or Ohio, or Florida, they all have different issues. Can you tell us the state?

Here's some general info; buy a condo with a "limiting factor", something that limits the amount of competition you'll have when you resell. Otherwise you will be like all the other condos, stretching to the horizon, and it will be hard to sell. A limiting factor is usually a view, or a certain desirable location (school district, waterfront, etc) or even a 3 bedroom in a 2 bedroom complex. Makes sure it's special enough to stick out in the sales listings.

Get high ceilings. These younger people hate 8 foot ceilings and carpet. They just do.

Condos are easy to fix up because you don't have to worry about buying a whole new roof or repainting by yourself. Frees up money to get rid of that carpet/formica/old appliances/ugly paint, etc.

Use realtor.com to see ALL the units for sale in one complex. Some friends of ours just spent $400K on a condo, and I didn't have the heart to tell them that most other units are selling for $200K.

Go see the more expensive units in the complex, they will give you ideas for decorating, etc.

If you're primarily looking to live there for MANY years, I have to say this; don't stretch to afford a view. I had a fabulous ocean view once, and after six months, I didn't even notice it anymore. After that, I saved a ton by staying in desirable areas, but without the view price tag, it kept things affordable for me. The area was the limiting factor that kept my value up.

iLander,
My state is Utah.I am planning on looking at places that have that limiting factor...better area with 3 bedrooms 2 bath is in the works as well as the 2 bed 2 bath...the ones that stick out to me in an advertisement,also newer buildings .I would like a view ,but not as important to me but know its important to future buyers that may buy from me in the future.I plan on staying long term(10 years or longer). Thanks everyone for the great information! its really appreciated and enlightening!JM

 

[chemgirl]

Check if the condo fee includes building insurance and see what's covered. You'll need regular home owner's insurance, but its helpful if the building insurance covers damage due to flooding etc.

I say this because I got a frantic knock at the door yesterday evening. It was the building manager. The ceiling collapsed in the bathroom of the unit below me. "Apparently" there had been no prior issues and then the ceiling just collapsed. They wanted to see my bathroom to make sure there wasn't a burst pipe (like I would lie about that...). Anyway, its a big headache and I'm not sure if I'm going to be liable for the damages and what's covered by which insurance provider. I'm very frustrated because there's no way it just spontaneously collapsed (especially when I hadn't even been in my bathroom for 9+ hours). The people below me are renters and I bet they just ignored a small leak until it wasn't so small anymore

I guess moral of the story is, see if the condo fees include building insurance that covers damage to other units due to building maintenance issues. Also watch out for the renter thing. I know there are many great renters, but its the few negligent ones that you have to look out for.

 

[iLander]

My state is Utah.I am planning on looking at places that have that limiting factor...better area with 3 bedrooms 2 bath is in the works as well as the 2 bed 2 bath...the ones that stick out to me in an advertisement,also newer buildings .I would like a view ,but not as important to me but know its important to future buyers that may buy from me in the future.I plan on staying long term(10 years or longer). Thanks everyone for the great information! its really appreciated and enlightening!JM

In Utah, they can build to the horizon, so dig hard and find a 3 bed/2 bath with vaulted ceilings and great view. Ask about upcoming assessments, and check the fees. Ask how many units are rented out and how many are owner-occupied. A high % of rentals may mess up your mortgage financing (and life at the pool).

Check the market value on Zillow, for a rough guide.

When you find a complex you like, make sure you look at ALL available units, not just the ones the realtor wants to show you. You might find a unit that needs $10K of updating for $50K less than everyone else. Avoid the developer's salesmen, they will try to pawn off the worst stuff to you first.

Plug the address into Realtor.com to find all units and prices in a complex.

Enjoy it, I love real estate, myself!

 

[MissGotRocks]

Have an attorney review the bylaws of the condo association before placing a contract. There are many reasons for associations to place special assessments and little you can do but pony up the money once that happens. Two stories come to mind - one in which all utilities were included in condo fees but the association kept putting to a vote the issue of installing individual electric and gas meters. Sounds good except that the homeowner would be responsible for the amount of purchasing AND installing the meters. This particular condominium group was built 20+ years ago and while all units were brick, they were poorly if not at all insulated. Gas heating costs were sky high - hence the association wanting to purge themselves of these costs and put them off on individual homeowners. So far, all of these efforts have been voted down by members. However, condo fees are astronomical because of the utilities, upkeep of very large pool and tennis courts, and upkeep of property. A very nice condominium but very high condo fees. Selling is difficult because folks can't wrap their minds around these condo fees. Another story involved a townhouse/condo unit wherein the siding, decks and trim were all subpar materials and literally falling off of the units. The builder had gone bankrupt so the only 'fix' was in the amount of an $11,000 per unit assessment. It was legal and everyone had to pay that amount per the bylaws.

Mortgage companies can look at the whole foreclosure/condo fee arrearages when deciding to finance a mortgage. You definitely want to know the rent/own ratios in the complex. That gives you today's look but no guarantee about tomorrow unless they have the rent clauses in effect.

Many pluses to condo living but buyer beware sometimes - just be very informed including legal opinion before signing contract.

Best of luck to you - any home ownership is very exciting!!

 

[pregcurious]

Make sure that there are not too many renters in your building. If you have too many absent landlords, the property will suffer for it. Also, meet your neighbors, and find out out sound-proof the walls are.

 

[jewelerman]

WOW! thanks A MILLION TIMES OVER for the great advise and support! I am really going to ask questions about all of these areas that each of you have brought up! and i will get a lawyers input before signing any contract! I

 

[MichelleCarmen]

Make sure that there are not too many renters in your building. If you have too many absent landlords, the property will suffer for it. Also, meet your neighbors, and find out out sound-proof the walls are.

Also, an end unit is ideal b/c of less noise AND you will have more windows in your unit b/c you're not sandwiched in between two other units.