What Makes a Condo Different Than a Single-Family Home?
Condo living and single-family homes are two very distinct housing options. While they may look similar on the surface, there are a few key differences between them that those looking to buy a home should be aware of before making a decision. For example, condominium complexes have more amenities than single-family homes but with less privacy. They also require condo fees to cover shared costs and maintenance, while single-family homeowners typically have to pay for these things out-of-pocket.
Additionally, condo owners often don’t own the land their unit is built on—they lease it from the condo association—which can lead to different restrictions regarding renovations or modifications. Ultimately, understanding the nuances between living in a condo and owning a single-family house will help you decide which type of property best suits your needs.
Do Your Research – Know What You’re Looking For in a Condo and What Kind of Budget You Have
Buying a condo in California can be an exciting and rewarding experience, especially if you are armed with knowledge. Research is critical; you should determine what type of condo you’re looking for and develop a realistic budget for your purchase. Then, take full advantage of all available resources, such as real estate search engines or working with a Realtor, to find condos for sale that suit your needs.
If you’re a first-time buyer, it’s essential to educate yourself about the different types of condos on the market, local zoning laws, and legal requirements related to ownership and maintenance. Knowing what to look for will give you confidence during your search and help make the entire process easier.
Work With a Real Estate Agent Who Specializes in Condos
When you decide to work with a real estate agent specializing in condos, they can be your voice and guide through the acquisition or sale of one or many condos in California. They will help you find how much each condo is worth and how to get the best price for it – as well as other questions you may have about condos for sale in California.
A great real estate agent, knowledgeable of how condos are often structured, will also enable you to properly prepare for all of your needs, from a condo-specific mortgage to renter’s insurance.
Get a Loan Pre-approval From a Lender
One of the most important steps you can take before you begin your home-buying process is getting a loan pre-approval. JVM Lending is a condo-approved lender, meaning they are experienced in dealing with loans for co-ops and condos.
In addition, JVM offers pre-underwritten pre-approvals, so you know ahead of time that you meet all the loan qualifications, giving you peace of mind as you shop for a home. So get started today and contact JVM to get a loan pre-approval from an experienced condo-approved lender.
Attend Open Houses and Schedule Private Showings
Buying a condo can be difficult, but two key activities can help you decide where to buy: attending open houses and scheduling private showings. Attending an open house near you is as simple as searching “condo open house near me” on the internet! You can preview potential condos and get a feel for what is on the market.
You can also schedule private showings with your real estate agent to take a closer look at the unit, the condo complex, and common areas available to condo owners. These activities can give you the insight needed to decide where to purchase your dream condo.
Make an Offer on the Condo You Want, Contingent Upon Inspections and Other Due Diligence
Depending on the state, making an offer on the condo you want often means conducting condo inspections and other due diligence, such as condo appraisals and loan underwriting.
In California, it’s particularly important to ensure that all condo contingencies are in place when making an offer on a condo. Being mindful of this during the buying process is critical. For example, if certain contingencies or requirements aren’t met or legal documents or relationship contracts need to be signed before closing, these requirements must be addressed before submitting an offer. Doing so can help make your condo purchase smooth sailing and hassle-free.
Close on the Condo and Enjoy Your New Home!
Congratulations on closing on your condo! While the process may have seemed complex, you now have the unique opportunity to enjoy a place of your own. However, before you get too settled, it’s important to be aware of condo closing costs that are associated with a condo purchase. These can vary depending on the condo you purchased and range from transfer charges to utility deposits or condo association dues.
It’s also important to take note of the condo closing timeline, which typically involves signing documentation ahead of an official closing date. This timeline is crucial for getting everything in order for the transfer of title and is important for ensuring everything runs smoothly. Once the paperwork is all done, it’s time to start making lasting memories in your condo!
Things To Consider
HOA Dues
HOA dues are significantly higher nowadays for various reasons (more liabilities; more maintenance needs for older buildings; more amenities), which can significantly offset the savings from a lower price.
Every $100 in HOA dues offsets as much as $25,000 of mortgage in this interest rate environment. Hence, $500 in monthly fees could be replaced with an additional $100,000 of mortgage debt.
Closing Costs
Additional closing costs can include fees for condo documents, fees to transfer the HOA into the new buyer’s name, and two months of upfront HOA fees.
Some of these are sometimes waived or covered by sellers, but we occasionally see buyers having to come to close with as much as an additional $1,500 or more.
Higher Rates
Condo financing also has slightly higher interest rates (1/8% or more, depending on credit score) when buyers put down less than 25%.
The Bottom Line
Congrats on beginning your journey to homeownership! Purchasing a condo can be daunting, but as long as you do your research and work with experts in the field, it’ll be a smooth process. Be sure to follow these tips and you’ll be closing on your dream home in no time. Looking to purchase a condo in California? JVM Lending is extremely well-versed and experienced with helping homebuyers purchase condos – contact us today for more information!
