Complete Guide To Keep In Mind While Buying The Condos
Buying a condo is one of the biggest decisions you’ll ever make. It’s an investment, but it’s also your home. There are pros and cons to consider before signing on the dotted line. Here’s what you need to know.
Condo buyers often have a few different options when it comes to buying their new home. They can buy individually or through a developer/owner (who buys for them). If they’re going the individual route, there are many benefits to this choice, such as lower costs and more control over who lives in the unit.
However, if you go with a developer or owner, the decision is not as simple as that. The developer may charge a fee for doing so, while other developers will not charge any sort of fee for selling your property. In addition, most condos are built by one builder or another. So you might want to know what that means for you.
First, here’s what you probably don’t want to hear: You probably won’t be able to get your money back if you later decide you don’t like your condo. When a developer sells a condo, they usually don’t retain ownership rights.
They instead assign those rights to the buyer. That means if you sell the condo you own within five years, you could lose access to your equity. For example, if you bought a condo in 2004 and sold it in 2009 for $200,000, you would have lost $80,000. Some developers do retain ownership rights, but most do not.
Even among those that do, some developers will give you the option to purchase back your rights after two to three years. But even then, it’s up to you to pay for the privilege. And depending on how much time passes between when you bought the apartment and when you sell it, you might not be able to get your money back at all.
Here’s why that happens: Most developers build properties using loans from banks. Those loans come due every month. To cover the expenses, developers take out a second mortgage on the property. This allows them to spend more time building more units. Then, once they finish construction and get ready to market the apartment, they find the bank has taken back the loan.
So now they’re stuck. They’ve already spent millions of dollars on marketing, advertising and building the complex. Now, they have to start all over again — only this time without financing.
This is where things get particularly confusing. When you choose to buy directly from a developer, you might think you’re getting into a long-term relationship with someone who will pay off your mortgage in exchange for owning your condo for decades to come. However, since no one owns your condo outright, you aren’t really “owning” anything. Instead, you’re renting your condo from someone else.
And that person, of course, is the same person who financed your condo. So if you end up losing interest payments on your mortgage, you’ll still owe that person money.
Of course, these risks aren’t limited to just people who buy condos directly from developers. Even if you buy a private condo from a seller, they’re still taking out a mortgage against your property. And that means there’s always the risk that they’ll end up walking away from the deal.
For that reason, it’s better to buy from a real estate agent. An agent can help you negotiate the best price for your condo and keep the transaction safe from any unforeseen circumstances.
One thing you should know about developers, though: They often build fewer than 50 percent of their apartments. Many times, the remainder are left empty until a buyer actually shows up to look at it.
That’s because developers want to make sure that the units they build sell quickly. If they leave a vacant apartment open to the public, the chances of anyone showing up are slim. Plus, they’ll lose the financing fees they’d receive for selling the apartment.
A good rule of thumb when it comes to buying a condo is to never sign a contract before seeing the property. You might feel confident enough to close on an apartment based on online photos, but you shouldn’t base your decision solely on pictures. Take a tour of the place. Check out the amenities.
If a person will dedicate a good time in selecting the Tulum condos then they will get the best quality of the options at a reasonable rate. Proper analysis of the situation will provide the users with the good amount of the returns. Analyzing the condos with time will give returns to the person.
Talk to residents. Ask questions!
When you visit the site, you should also meet the current owners. Find out if there were any problems. Did the previous owners stay in the unit? Were they happy with the place? What did they like and dislike? Do they plan to stay in the area?
If the unit was built well and everyone seems happy with it, you might be inclined to move forward with the sale. On the other hand, if the unit isn’t exactly what you expected, you might want to pass on it. Your happiness doesn’t matter; it’s whether you get your money back.
Now that we’ve covered what you should know before making a decision, let’s talk about what you should expect after closing on your new condo.
There are a few rules to follow. First, you must pay a deposit equal to 10% of the total cost of the unit. You’ll typically see that figure somewhere around $2,500. Keep in mind that this can change depending on the size of the unit and the type of financing used.
Once you pay that 10%, the rest of the funds needed to complete the purchase will be due immediately. At this point, you’ll get keys to the property.
Next, you’ll need to arrange for the utilities to be hooked up. After that, you’ll need to arrange for maintenance. And you’ll also need to set aside a little bit of money each month to pay the monthly HOA dues. These fees vary greatly, but they’re usually around $100 per month.
Finally, you’ll need to provide proof of insurance on your new home. You’ll need to show that you’re covered for liability, fire and theft. You’ll also need to provide evidence of renters insurance.
All of this takes time, and it’s important to remember that you’re moving into a brand-new home. So take your time. Enjoy yourself. Make sure everything is fine before you finalize the purchase.