Are you looking to buy a condo?
If you’re a recent grad, an empty-nester or a single professional, this home ownership option might be just what you’re looking for.
Why are condos so popular? The main reason is cost. A smaller space in a larger building will cost significantly less than a single-family home — especially in the city. That’s why this home ownership option is so attractive to young couples or singles paying off college debt — it’s affordable. And it beats apartment living, because it’s an investment.
When you pay your rent on an apartment — and there’s not much available in this area for less than $2,000 a month — your money goes right into someone else’s pocket. With a condo, your money goes toward a tangible product that you own outright. Although you’re paying interest on your mortgage loan, your monthly payment is likely to be the same (or even less) than rent, providing you are able to make a down payment.
So is a condo right for you? What should you do before you start shopping?
Find a real estate agent. Realtors are professionals bound to a code of ethics. Your realtor protects you while home shopping like your lawyer protects you in court. You do not want to enter into a contract for hundreds of thousands of dollars without a professional looking out for your best interests.
Further, real estate agents have access to the multiple listing service database, and you do not. That means you can look online at what’s for sale, but many listings only real estate agents can see via this exclusive portal.
Find out what you can afford. This will likely be determined by the bank, where you will go to get pre-approved. Pre-approval isn’t a legal requirement to look at homes but I wouldn’t recommend starting the process until you have been pre-approved. If you find a condo you want to bid on, the owners will not be inclined to wait for you to secure funding. Having your pre-approval ready to go means you can move faster in an often fast-paced market.
Once you are pre-approved, you know how much the bank will lend you so you know what price range to search in. Not everyone is comfortable with the amount a bank is willing to lend them, so consider this carefully. The mortgage company will dig deeply into your finances, but only you really know what you spend. Do you eat out a lot? Love to buy clothes? These habits can run into the hundreds and even thousands of dollars a month, affecting your ability to pay your mortgage. If you opt to borrow all the money a bank will lend you, be prepared to cut back on your purchases. If you need lender recommendations, ask your realtor. *Note – it is illegal for realtors to receive any form of a kickback when recommending a lender, appraiser, inspector etc. and vice versa. Recommendations are based solely on an established business relationship.
Ask about fees. Condo fees can make or break a purchase. They can be as little as $100 a month, but in this area, $1,000 a month isn’t unusual. That’s a huge difference.
And what are these fees even for? They can be for almost anything. Mostly they cover maintenance and upkeep of the building and surrounding property — landscaping, clearing snow, keeping the lobby clean, etc.
Sometimes it covers utilities, but sometimes it doesn’t, so be sure to find this out, or your budget could take another hit.
While condo fees can include repairs, oftentimes large projects like putting on a new roof or repaving the parking lot result in assessments to owners. These can be thousands or even tens of thousands of dollars. Make sure you thoroughly investigate the finances and by-laws provided in the condominium resale documentation. Your agent can help clarify any confusing topics
Condos are a great investment, and they serve the needs of a wide segment of the population. There is a lot more that goes into purchasing a condo but this is a great place to start. Find a good realtor to help walk you through the process. Do your homework and make decisions carefully, and you could own your own little piece of D.C.! Contact DCRE Residential for more home buying info and to find the best agent for your journey.