So you’re ready to buy you’re first luxury condominium. You might be thinking it’s not as complicated as buying a house, but guess what? It’s more complicated. We’ve compiled a list of important things you need to consider before you purchase your new condo.
Location is crucial-
You’ve heard this before, it applies to any and all real estate, but in purchasing a luxury condo location carries even more weight. You’re going to be investing a large sum of money in a property, so you want to make sure of two things- that you’re sure you want to live in this area, and if this area the region is going to increase in value in the following years. You need to learn about your target neighborhood well, and the surrounding areas. Are the amenities you need, a grocery store, fitness center, school etc. close by? A realtor will know the area well and be able to answer these questions.
In real estate we have something we call the principle of progression and the principle of regression. Depending on the homes features and cost, compared to other homes in the area it may benefit from the Principle of Progression or be suffer from the Principle of Regression. Find out if your target city or the surrounding communities are developing or plan on expanding. If the answer is yes- more homes or office buildings are being built in the area- all other factors aside- you can expect the value of your condo to rise tremendously in the years following a purchase.
Are there currently any disputes among owners and the Condominium association is trying to resolve?
Are there any condominium laws currently being reformed?
If one or more of the owners, or the association informs you that owners are fighting intensely over one or more issues, you should reconsider about buying into a wasps nest. Some common issues include hanging items from a balcony, pets, and age restrictions.
Ask your realtor to determine whether any amendments to the condominium by-laws are being discussed. You don’t want to be handed the keys to your new condo, and learn the next day that a new amendment had been added to the bylaws stating that every condominium owner only get one parking space. You don’t want to leave your Ferrari in the street. That is an extreme example, but there are many cases in which a change in by-laws could change your satisfaction with the property. Once you have a unit you have a vote. If the condominium is professionally managed you can ask your realtor for the number of the managing company; they’ll be glad to answer these and other questions for you.
Work with a realtor that knows the area and focus-
It’s critical that you have an excellent buyer agent who focuses on luxury condominiums and is familiar with the area you want to buy in. Luxury real estate agents know the legal requirements and potential liabilities of the business, which differ from the regular market.
Buying a high end condo is not the same as buying a house. There are legal differences; home owners are given total legal control of the home, including the land it sits on. When you buy a Condo, you only own the home, all the property around the house is controlled by the democratic decisions of all the owners of the complex. Meaning you may not be able to paint the door if you don’t like the color, or uproot the bush in your front lawn which you find distasteful. When you live in a Condominium your neighbors are more than just neighbors; they’re co-investors. When searching for condos remember that there are fewer open houses for high-end properties and appointments need to be made. Make sure you have a close trusting relationship with your realtor so you’ll be the first to learn about price reductions and new homes which have not been put on the market.
Consider the amenities you desire
Before you even begin to search for a condo, sit down and make a checklist of your wants, thing you’d like to have, and your needs, the must haves. If you’re an avid golfer, make sure you’re scoping properties with nice courses nearby. If you want a swimming pool, search for condominiums which have shared or personal swimming pools. How many parking spaces do you need? How far is the condo from a grocery store? The internet is your friend here, or you can call the condo’s association and speak with them.
Prepare your finances-
In order to narrow your search for condos, you should sit down and determine how much you are willing to spend, set a minimum and maximum price. Figure out how much down payment you can put down. In order to qualify for mortgage you should be able to put down a minimum of 20% of the purchase price; however some financial institutions may require more. Consider all costs associated with buying a condo: down payment, closing costs, appraisal, mortgage points, maintenance and taxes. Before you meet with your realtor to begin your search, you should consult with a mortgage broker to learn about the programs available and determine which would suit your needs best. It is much easier to find a condo when you have a price range.
Buying a luxury condominium is on is different from buying a house in more ways than one. You need to make sure you’re informed about the neighborhood you want to live in, you’re familiar with the condominium management and rules, know how you’re going to finance your purchase and more. This list will help you get started and learn about the basics, to learn more speak with your agent.