Buying A Condo - Avoid These Common, Costly And Popular Mistakes
A condo is a much-desired piece of real estate in today’s stance of nuclear families. It is a small, compact and charming abode where you can enjoy the luxuries of a high-rise without compromising on security and get to enjoy a plethora of amenities as well. Hence, it is no surprise that buyers are flocking to condos and preferring it even over villas and townhouses.
However, buying Real estate is a complicated task. This is exacerbated in the current real estate market in Toronto, wherein buyers often struggle to find the right project at a good price. While the rules and guidelines for buying any property are the same, buyers of condos must be more cautious when buying a property as the nitty-gritty involved in this process are slightly different compared to a townhouse or a villa.
Here are the most common and often, quite costly mistakes that condo buyers must avoid –
Still Rent Because It’s Cheaper –
Actually, right now, in our marketplace, the price of renting is more than what homeownership would be at these fantastic prices and interest rates. To not mention the fact that rents go abreast of average by a minimum of 3 percent each year, so a $1,000 rent today would be $1,344 in ten years. Even more importantly, you will be missing out on all the mortgage interest deductions, which can likely prevent thousands of dollars.
Sit Up For Prices To Fall More -
They could, but in my thirty-four years of selling real estate, these are absolutely the lowest they’ve ever been. The federal has put downward pressure on consumer prices to avoid inflation and has artificially driven down interest rates further. That is all getting ready to end.
Estimating Finances -
This is probably the most common mistake condo buyers make – not estimating their finances correctly. The common factors that influence the pricing of a condo include:
Buyers who are conscious about their budget must be willing to make a compromise on one of these factors for a condo to fit within their budget. Buyers must also keep in mind what they can afford to put up as a down-payment and consider their current & future financial commitments for mortgage payments. More importantly, buyers must also take into consideration ancillary expenses associated with buying a condo such as cost of décor & repair, mortgage processing fees, brokerage and legal fees etc. Buyers should also have to consider expenses for amenities & facilities that most condos offer. Most importantly, the buyers must also consider tax implications buying a condo would have. Borrowing more money than they will afford to pay back would also put an unnecessary financial strain that will stay a burden for years to come.
Not Choosing The Right Project -
A condo goes beyond just being a house; it represents a lifestyle that you have chosen. Although price is one of the most essential determinants in helping you locate a condo, here are other factors that must be used to differentiate projects:
- Occupants – Every buyer should be looking to buy in a project where they find compatibility with the other occupants in the property.
- Neighbourhood / Location – The neighbourhood must feature amenities such as schools / hospitals / colleges or proximity to the workplace.
- Developer – The track record of the developer & completed projects must also be taken into consideration when choosing a project.
By not choosing the right project, buyers are not going to get full value for their money. The biggest advantages that a condo offers over townhouses & villas are its compactness, location and lifestyle features. If buyers are going to overlook these factors, then there is undoubtedly going to be a compromise in buying.
Buying Direct From A For-sale-by-owner Will Save Me Money -
When it involves for-sale-by-owners, they are not visiting be priced lower merely because they are ex-directory with an agent. In fact, I have got worked with many folks who bought a for-sale-by-owner property without consulting a Realtor and paid far more than value for the house.
Not Getting Pre-approval For A Mortgage -
This is a common mistake that first-time buyers often commit. Most homes are purchased with the help of a mortgage. A mortgage can provide you with leverage to buy a property that is beyond your current financial reach. However, buyers must keep in mind various factors when buying a mortgage, such as security, rate of interest and their ability to repay for an extended period.
A mortgage provides buyers with freedom, flexibility and options in being able to choose the property of their liking. The biggest problem concerning mortgage is that buyers often grossly overestimate or underestimate their ability to get a loan sanctioned. More often than not, this can be a deal-breaker as buyers would either be left short of cash to buy their dream home, or they would be forced to settle for a cheaper alternative without the knowledge that they are eligible to secure a larger quantum of a loan.
To avoid these pitfalls, a buyer must always look to take a pre-approval on a mortgage. This will make sure that the buyer is aware of what quantum of loan they are eligible for. This will help them plan their finances, establish target price ranges for house hunting and get an estimate on how much down payment they would have to lay down. In some instances, buyers are often taken aback when they fail to get approved for a mortgage owing to a little-remembered unpaid credit card bill or poor credit score. Getting a pre-approval would help avoid such last-minute surprises, and buyers can then look for alternate methods of sourcing funds for the property.
Not Knowing Why, You Are Buying A Condo -
The biggest question that a buyer must ask before looking to buy a condo is why they are buying it. If the reason is to move in themselves, then the selection process is straightforward. In such a case, a condo can be selected depending on amenities that are required for the buyer, such a school, transportation or others. The condo must fit into your lifestyle, and your & your family must be able to blend in with the occupants/neighbours with ease.
In case the condo is being purchased as an investment option, then the following must be considered before making a decision –
- Estimated rental value
- Potential to appreciate
- Tax, Mortgage and repair costs
The equation is straightforward in this case. The cumulative value of mortgage payment, repair costs, commissions and other ancillary expenses must be lower than the rental income that the condo generates in addition to the appreciation that the condo builds for the buyer to stay in profit. The reason that you choose to buy the condo will determine its location, size and other aspects.
The “FED UP” Purchase -
You have been searching for some months but haven’t found your dream home. Agents are misleading you; you will be outbid by someone who had deeper pockets than you. You’re Fed Up! Stress emotion buying house – One big mistake home buyers make is to shop for a property in desperation. They buy something reasonable instead of something that actually suits their needs because they’re sick the emotional rollercoaster of home buying. This is a choice you will live to regret for a lengthy time. Rather than buying out of frustration, stop searching for a long time, or better still get a buyers’ agent on your side to avoid wasting you time, to seem in nooks and crannies you would not have thought of and to search out those silent sales for you – the off-market properties.
Skipping An Inspection -
Sometimes, the brand of a condo developer & the hype surrounding it is so big that buyers are way too easily convinced about a project. They believe the hype just through brochures & presentations and often skip a vital step – inspecting the premises. This is an essential part of the due diligence that every buyer must do to make sure that they have chosen the right project. Despite all the glitz and glam that is promised on paper, a site inspection will reveal the actual picture – has the developer delivered on their promise.
Avoid these 5 costly and common mistakes and buy the condo of your dreams and enjoy the most luxurious lifestyle in the most charming abode! And to buy the best possible condo within your budget to ensure that your hip, hot and happening lifestyle is not affected, you have definitely come to the right place. Whitehill Broker represents top-notch quality with stellar service!
Withdrawing Due To The Radon Test -
Radon occurs in nature; virtually every home (and even the outdoors) has some level of radon. The EPA has set several of the toughest standards within the world when it involves radon. Do not panic if the radon level comes in above the EPA guidelines, a mitigation system may be installed. Frankly, one in every of the safest homes could be one where you recognize what the radon levels are and also, the seller has installed a mitigation system, reducing the radon to almost zero.
Not Thrilled With Real Estate Agent -
I think it’s essential that you simply make a choice to figure with only 1 real estate agent because they’ll show you each property on the market. The way you show commitment is by entering what may be called a buyer broker agreement. Learn if you have got the right to exit this agreement if it is evident that your account isn’t working.
FOR FURTHER INFORMATION OR IF YOU HAVE ANY FURTHER QUESTIONS PLEASE DO NOT HESITATE TO CONTACT ME.
(REAL ESTATE COACH & BROKER OWNER)