11 Mistakes All Condo Buyers Need To Avoid!
Buying a condo can be overwhelming, especially to first time buyers. In a fast moving market like Arlington, it is even more difficult to stay on top of everything. Below are 11 mistakes you want to avoid to make the process a lot smoother.
1. Not knowing if the condo association is Involved in any lawsuits.
What happens if you buy a condo that is involved in a lawsuit? You become a party to the lawsuit! If is not uncommon for listing agents and buyer agents to not know if the condo association is involved in a lawsuit - do not overlook this one!
Lenders will generally ignore frivolous lawsuits with a letter from the condo association’s attorney. Some lenders will decline loans if the outcome of the suit is uncertain. If the lender finds out about a lawsuit after your financing contingency expires, your deposit may be at risk.
2. Continue to Rent Because It Is Cheaper
Renters have been saying this for years. Meanwhile, their friends that did buy have a lower monthly payment and substantial equity. Unless you are living with your parents, rent is not any cheaper, especially when you consider the tax benefits of owning.
3. Not knowing if the condo association has adequate reserves.
Don't overlook the financial situation of the condo association. If the association suddenly needs to make a costly, unexpected repair and does not have adequate reserves, you could be hit by a special assessment which could run thousands of dollars for each owner.
4. Needing to see every condo on the market.
Most buyers will need to see a certain number of condos to just get a feel for the market and hone in on their needs and wants. However, most will also get to a certain point where they have seen enough and are ready to act. The buyers that continue to need to see every thing on the market, are the ones that never end up buying. Their fear of buying a place when another one 'that might be a little better' is just about to come on the market, keeps them from buying anything.
5. Not knowing if the condo rules include lease restrictions.
If you are an investor, you definitely want to pay attention to any lease restrictions. If you ever think you might want to rent out your place, you should also pay attention to this. Some condos will limit the number of units that can be rented in the building/complex. Once that limit is reached, there is a waiting list for future landlords. A long waiting list can seriously impact your rental returns.
6. Wait for prices to come down.
If you have lived in this area long enough, you have probably noticed prices rarely go down. There are many reasons why Arlington and the DC metro area continues to be recession proof and down turns in the market are not as severe as other areas. Over the past decade, the average condo price has increased from the mid-$300's to the mid-$400's. That is about a 33% increase.
7. Continue to rent because you can't afford your dream condo.
The longer you wait, the longer you won't be to afford your dream condo. Keep in mind, your first (or even second) condo, won't be your last. A better strategy is to get into the game now and buy a place. You will then be in a better position in the future to move up to your dream condo, which will probably change over time anyways.
8. It's priced well, but I want a steal.
Don’t we all? The reality is, if it’s priced well, another buyer will appreciate the value and may step in and buy it before you. while you continue to “play not to lose” rather than “play to win”.In this area, if a condo is under priced, it will get bid up pretty quick.
9. Buying directly from a for-sale-by-owner to save money.
That money you are hoping to save buying directly from an owner? That is the same money the owner is trying to save.
10. Backing out of the contract because the home inspector found some defects.
Every inspector will find something. If they don't, the inspector doesn't feel like they are doing their job. Of course, for major issues, you might want to consider cancelling the contract, but for the most part, expect the inspector to find some defects. You can usually get the seller to correct these or give you a credit.
11. Choosing to work with your friend/relative/coworker because they need the sale.
Buying a home is one of the biggest decisions you are going to make. You want to have a good agent on your side that knows the condo market. Tell your friend/relative/coworker that you value their friendship so much that you don’t want a real estate transaction gone sour to jeopardize the precious relationship.
Here is the deal: there are too many misinformed Realtors advising their clients to buy a condo, without realizing they have
incorrect information! The unfortunate reality is that Realtors who focus on single family homes often get out-negotiated, establish
unrealistic expectations, and unintentionally misinform their clients!
Your average Realtor cannot become an “expert” in condo transactions overnight. There are many generalist real estate agents
offering to help you regardless of your unique needs with incomplete, misinformed, or just plain wrong opinions about condo sales.