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Thread: Buying a condo

  1. #1
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    Default Buying a condo

    I'm looking into buying a condo. I live in an area that is relatively inexpensive, and so it makes more sense to own than to rent, to hopefully build equity.

    However, it's definitely a daunting process to buy and if anyone can give me some pointers, it would be much appreciated.

    There is a property I found that is access-controlled, somewhat newly-built, gated and in a pretty hip neighborhood. After talking to an agent today, I found out that four apartments were put up for sale in that complex and the complex itself is not so big. So naturally, I'm wondering if anything is wrong with the property or the HOA.

    Also, it happens to be bank-owned. The realtor told me bank-owned, for a buyer, isn't good-that banks do not like to pay closing costs and a whole slew of charges in buying a home, so buying a home like that will ultimately cost me more. Is this really true? Because until now, I thought the opposite. She also said bank-owned homes take forever to sell.

    Another property I am eyeing has no controlled access, isn't gated. Even the mail boxes are parked on the side walk, making it look a lot less secure, though it is in a much (supposedly) safer neighborhood.

    Also, as far as HOA fees, what should a reasonable monthly fee be? The two properties I mentioned are $130-150/month hoa, which I can deal with. However, there were also a few cheaper condos in the same price range in my city, which seem to have HOAs that appear a bit excessive given the relatively low cost of living in the city (approx. $250). Any input on that?

    If anyone can be of help w/advice about buying a condo, I'd appreciate it.

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    Default Re: Buying a condo

    ^ Are you pre-qualified to buy ? That is really the first step ( getting approval for your loan ) so that in case you do find " the one " you'll be ready. There are also agents and some owners that won't show unless you are pre-qualified.

    If you like that bank owned one , don't let the agent make you 2nd guess things. Most likely , it could be an agent wanting to " double side " the deal such as representing a seller as well as representing you ( the buyer ) which doubles their commission. They are most likely wanting to show you everything they currently have in the funnel ( homes they are signed as the sellers agent on ).
    ^ Simply let the know you want to see everything and they will auto-correct it .

    It is true that bank owned homes take longer than traditionally funded homes ( due to banks just wanting to see MANY offers before making a selection who to work with and they will typically take longer to get back for example that a motivated seller who is wanting to make a move for example ).

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    Default Re: Buying a condo

    For the HOA , it just depends what it includes. Look at the inclusions ( for example, do the higher ones provide lawn care, snow removal, ameneties like jacuzzi or club house ? ). Once you get a sense of what is the norm, you'll be able to tell if things are priced correctly ( 90% of the time they will be ). You should get " more " with the higher prices ones.

    I personally really really like condos and town homes ( both in terms of living and investing in ) . I love that life is easier with less to maintain.

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    Default Re: Buying a condo

    HOA's are never more than one election away from turning truly terrible. The lower end the condo, the worse the HOA tends to be. I used to flip houses and one HOA burned me, never again. That said, there are some positives to a condo, but none which cannot be purchased on your own. Don't like yard work, hire a lawn boy. Don't like fixing little things, hire a handy man. Don't like worrying about replacing a roof, set up a sinking fund to replace it. All the HOA does is charge you in advance for things and then if they don't budget right, they assess you for the difference. It's a pay now and pay later proposition.

    HTH
    Z

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    Default Re: Buying a condo

    If the unit you are looking at is an REO, it could be the whole condo project is in financial trouble. The fees might be OK now, but who knows about next year.

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    Default Re: Buying a condo

    Condos typically do not appreciate as much as single family homes do. Are there duplexes in your area? (Easy way to become a landlord - tenants are next door so can't go crazy on you, but maybe you want more privacy...) Some condos have high fees and sock money away into reserve funds for new roofs, etc. Others are a wind storm away from a 'one-time-assessment' to replace the roofs, LOL
    Same 3 things apply - Location, location, location. A condo in a classic mill building has always appealed to me. Look carefully before you leap, and good luck, congratulations on thinking about your next big financial step!
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    Default Re: Buying a condo

    The problem with condos - especially 1BR condos - is that they don't appreciate it. Between interest and opportunity cost ("the money you could have if you had invested instead of buying a condo") and assorted associated fees, it often gets quite close to the cost of renting. And if you leave, you get clobbered over the head by realty fees.

    If you intend to live in your condo for 10+ years, go for it. Otherwise, maybe not so much.

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