The overall prices of real estate are still 16% down from their peak in 2006. What the future may bring to the U.S. real-estate market is still debatable given its slow recovery and uncertainty about consumer confidence.
10 rules for condo buying
By Dan S. Barnabic
Let’s hope the recovery picks up again, but, notwithstanding the market conditions, exercising caution before buying is always of paramount importance. The adage, “don’t judge a book by its cover,” should come to mind when buying into any real estate, and more particularly, a condominium complex. Although they may appear neat and physically attractive looking from the outside, condo buildings may be ridden by myriad problems, starting from poor quality construction, all the way to mismanagement and lack of reserve funds needed for their unexpected repairs.
I previously wrote articles on the pros and cons of owning a condo, the condo ownership structure, longevity of the condo complexes, and compared renting versus owning. This article provides the first of the 10 Golden Rules to be followed by those contemplating to buy a condo for their residence or as an investment.
These rules, explained in detail in subsequent weekly articles, address the most important things to watch out for before buying a condo unit.
The 10 Golden Rules for Condo Buying are:
1. Don’t rush
2. Buy at the right time
3. Beware of bargain prices with high maintenance fees
4. Make a low offer
5. Make sure you can afford the carrying costs
6. Buy with a solid down payment
7. Be cautious when buying during preconstruction
8. Beware of complexes with many units rented out
9. Check the physical facts
10. Consider demographics and future resale value
The rules will provide you with the knowledge on what size and type of condo unit will give you the best resale value and what specific features you must check within the condo complex before you buy. This alone may save you thousands of dollars and prevent you from being stuck in a wrongly chosen unit.
Those of you that already own a condo will benefit from the rules as well, for they will broaden up your knowledge and point you in the right direction the next time you wish to buy a condo unit.
Rule No.1: Don’t rush
It’s human nature to buy on impulse. Very often people fall in love with a good-looking car and buy without giving it a thorough mechanical inspection. Later, when they discover defects that the dealer wasn’t aware of or failed to disclose, they learn what it means to have bought a “lemon.”
Similarly, an overeager condo buyer may run into difficulties by rushing to buy a condo without thoroughly examining the unit and its complex for potential problems.
Many buyers rushing to buy a condo succumb to:
- Problems resulting from failure to educate themselves to the essential facts of communal ownership.
- The allure of becoming their own landlord.
- The promise of carefree living.
- The pressure of sales pitches and developers’ promises that may often be unfounded.
- Not realizing that condo ownership is fraught with perils.
You must take time to carefully consider all the facts before committing to what is likely to be the biggest investment you’ll ever make. Slow down. Otherwise, you may succumb to developers’ or real-estate brokers’ commission-driven sales pitches and make an unwise decision.
Don’t trust others to make decisions for you. Take your blindfold off and read the rules that follow in weeks to come, carefully. By adhering to them, you can develop condo buying skills enabling you to make your own educated decisions before putting your signature on the dotted line.
Stay tuned for the second rule.