Venturing into the world of real estate can be intimidating and complicated at first, especially for people who have no prior knowledge of anything that involves home buying and selling transactions and what happens during and after the property has been leased.
Being a first-time home buyer can feel like walking blindfolded alone in the dark that can lead you to huge debts, sometimes even worse, if you don’t have the right information and people to guide you throughout your journey to buying a home. In this article, we will show you what homebuyers, even those who are exposed in buying and selling a condo unit, ask us when planning to buy a condo. Worry not whether the company tells you the truth, they are obligated to tell you all necessary information about the properties they sell after all, and in the highest form of honesty.
1| What are the rules and regulations around the area?
First things first, what rules are installed inside under the management of the home you are about to buy? Being familiar with these rules not only gives you a great status as a homeowner around the building, but also to detect others who disobey it. Rules around condo communities aren't too strict though but knowing the atmosphere of your surroundings could never hurt a little. Asking this question suggests that you are a responsible homeowner, and everyone loves a responsible homeowner around them, especially for the neighbors.
2| Where do condo fees go?
When buying a home, aside from purchasing the unit itself, keep in mind that there will always be additional costs excluded to the monthly mortgage payment. One good example is what we call utility bills. Utility bills are the services that people purchase like heating, cooling, electric, internet costs, and more. They can be obtained from the homeowner and sometimes, from the local utility company. They can show you the average costs over the past 12 months of the unit you are about to buy.
Other additional fees could include service from using the condominium's additional facilities. Luxury amenities like pools and tennis courts and gyms are some.
Never underestimate the importance of thinking ahead and planning a budget with you money, this can make sure you could afford the home itself and maybe even have more to save.
3| How much is the average condo fees?
More additional payments regarding condo maintenance should be inquired. Remember, condos tend to share walls and landscaping and because of that, the management requires funds to pay for community property and repairs. Condo fees enable the management to fulfill these changes and sometimes, upgrade them. This can be questionable to some first-time home buyers but bear in mind that these renovations come in handy when disasters strike.
4| Should I buy or rent?
Purchasing a new property is, without a doubt, a solid investment. That being said, renting can sometimes be a better option for some people. One thing that first-time home buyers should remember is that there are always multiple options even if you can't see them, the trick is to be equipped with the correct questions and your real estate agent can set you up with something more suitable for your budget or preference.
Choosing between buying or renting is a personal question you have to ask yourself before proceeding to transactions. You can start by asking how long you plan on staying in a home after you purchase it, if you think you'll only be staying a year or two then it might be best to just rent the property rather than having to sell it again after you are done. Another question is to ask how much you have in the bank, which leads to how much the down payment, closing costs, and monthly interest is compared to price of just renting the condo unit. Whatever answer you have though, one thing is for sure, buying a home is great but it can turn out to be a huge waste of energy and time if you don't consider other options such as renting.
5| Is there a rent-to-own property?
A rent-to-own property involves a standard rent-to-own agreement which basically involves renting the condo in a specific period of time with the option to fully purchase it before the lease runs out. Rent-to-own are very hard to come by though as owners do not typically consider that option in agreements. Why? It is quite simple, buyers of this kind of property are mostly those who have credit scores barely qualified for a mortgage which means sellers are taking a higher risk than the buyer in the contract. Since the owner or the management is taking a risk in this negotiation, the terms for a rent-to-own agreement will expectedly be considerably favorable for the owner.
Agreeing on a rent-to-own may have its advantages but as a first-time home buyer and especially as one who is on a budget, it might be best not to opt into an option unfavorable for you.
6| Are there any HOA red flags?
The HOA (or Homeowners Association) is a community designed to manage common or shared property, protect every owner's property values, and provide services to residents to develop a sense of community through social gatherings. They are funded by the residents (homeowners) themselves and usually have a board of directors.
Talking to several people around the neighborhood should help you navigate important information about how management works, the property you are about to buy, and the community that surrounds you.
7| Is the location prone to natural disasters?
As a responsible homebuyer, you should know whether the city you are going to reside in is prone to natural calamities. Typhoons, earthquakes, volcanic eruptions, and more unsurprisingly play their roles in affecting homebuyers where to buy condos for their liking.
Although it is a must that you know much about the city you want to live in, you can still always reach out to the management for related questions if there are concerns about natural disasters and the like. You can never be too careful nowadays, so ask all you want until you feel secure about everything.
8| Is renting out a unit allowed?
People buy condo units today as an investment and more often than sometimes, rent them out. It usually is allowed, but you can never go wrong in ensuring that there are no restrictions about renting out a unit. It is still important for the management to know what you plan to do for the unit so other residents know what is happening around their own home.
9| Are there any pet restrictions?
Are you a pet owner? If you are, then asking whether the building allows pets inside or not is going to be an important question for you to keep in mind. Some condos don't allow pets but for the most part, pet restrictions are put in place so as to prevent any minor inconvenience around the community. Some restrictions include the number of pets allowed to have, the weight limit of having a pet, and more. Restrictions such as these are decided by the homeowners association, which make up most of the tenants and lessees in the building.
10| Do I still need to purchase insurance?
Condo associations cover insurance for the building and the land, the only insurance that would probably be in your need is for the unit’s content and liability. This is what we call the Renter’s Insurance. This would protect you for damage to the personal property inside the condo, from unfortunate incidents that may occur.
11| Are there any special assessments incoming?
There are inevitable maintenance repairs that come up around the association like replacing the windows, repairing electric circuitry, and renovating some public areas. The board will have to take bids and determine how to pay for the job and if there is not enough cash in their reserve funds, it is probable that a special assessment will need to take place and the cost of the maintenance will be divided into the number of owners in the association.
You can ask for any history about special assessments or anything the same. You can also ask you for any future plans about said assessments. If the community has not been under any renovation within the past decade or so, there is a high chance that an assessment will take place anytime soon.
12| What are the restrictions on outdoor space?
Condos typically offer an outdoor feature that residents can indulge themselves with. It could be a yard, a deck, balcony, whatever it is that involves outside the unit. Sometimes, however, there are activities limited to these areas such as smoking cigarettes, barbecuing, creating too much noise, leaving any form of litter, so be sure to ask for any restrictions about these or else, the management could close the areas for everyone and no one will be able to enjoy it anymore.
13| How do parking arrangements work?
If you are someone who owns a car, it's important for you to know where and how parking arrangements work around the condominium. If parking space is scarce in the building, are your guests allowed to park somewhere nearby the building?
14| Is the property modern and is it properly preserved throughout the years?
Inspecting every aspect of the condo of your preference from top to bottom is a vital step in ensuring that you are making the right decision in choosing between options. The property should be clean, well-maintained, and cared for. The walls and ceiling should have no undesirable areas and unusual colors which might be signs of a unit is crumbling sturdiness.
Be wary of older condos though, some managements don't really put in too much work in keeping their properties appealing. Outdated materials and construction practices can cause big repair bills and sometimes, put you in danger.
15| Has the property been under any form of renovation?
Updates to a unit or a condominium are vital in its value and durability, but they are also opportunities for unwanted events to happen, especially if the owner was on a budget and saving money on the rehabilitation or renovation of the place.
If the property you are considering buying did undergo renovations, it is possible to ask the seller or the lessor for details about the people responsible for the work along with their contact information. Small and simple changes such as what color they painted the walls may be very helpful in your investigations throughout buying or renting a condo unit.
16| Is there any pending litigation?
Lawsuits that involve the company are vital pieces of information to know what might actually happen for the future of your home. Most times, litigations include disagreements with the association against the builder or developer. As a buyer, and a first-time at that, keep in mind that you have the right to know if there is anything that could suggest an unpleasant history about the company.
17| What is going on in the neighborhood?
Asking what happens around the neighborhood is important information that can affect the length of your stay in a property. Data suggests that the quality of the neighborhood is one of the main reasons recent home buyers chose their neighborhood.
Because when buying a home, you're not just aiming for a modern unit to live in but a comfortable life and a peaceful one at that. Having loud, drunk, or ill-mannered people around you eliminate all chances of having that calm lifestyle.
18| How often has this property been in and out of the market?
A property that has been on and off the market, being sold multiple times, within a short period of time means that it may point to a problem existing in said property. Problems could include the property's location, neighborhood, or the house itself. Being certain about your choice means being thorough about investigations around the house itself and every little thing that is more than meets the eye, so you won't have to deal with inconveniences with your stay.
19| What is the potential resale value of a condo?
A condo's resale value can only go two ways; upwards or downwards. An increase in a condo's resale value is always a good thing because it shows that it is in high demand and that it fulfills most buyer's needs. Increases can mean many reasons, one of which is that condos typically outperform detached homes when we talk about appreciation.
Meanwhile, a decrease in resale value pretty much deteriorates the chances of selling the condo. Most of the time, a negative change in resale value is caused by buyers not wanting condos at any given time. A condo unit's resale value is highest when buyers exceed the number of renters.
Asking what the resale value of a unit of your choosing ensures that you have a plan of what to do about the unit once you are done with occupying it. Remember that as a person in real estate, you are not limited to buying yourself a home, you can also be a seller or a lessor.
20| How well have condos sold in the community in the past?
Having knowledge about the history of the condo community that you are interested in helps you create a sounder decision when planning to buy a condo unit. Asking if there are condos appreciating the same as “like” properties in the area, how long do listings stay on the market, whether there is a demand for the complex, are all good questions to start. The answer to these questions not only equips you with knowledge about how units around you work, but also what kind of people you share the building with too.
There is no perfect home, but we believe that knowledge is certainly power, and, in this case, knowledge will enable you to become a well-protected, well-informed, and information-oriented home buyer. It is now your responsibility to share this information with other first-time buyers who need help in guiding them buy their new home.