5 Traps to Avoid When Buying a New Condo
Buying a new condo is exciting. Yet rushing into the process without doing the proper research can spell disaster.
It’s extremely important you take your time, use all the tools at your disposal, and consult the advice of experts before settling on a condo.
Here are the 5 biggest traps to avoid when buying a new condo.
Buying Too Soon
The most common condo-buying mistake is actually buying a new condo too soon. Just because everyone else is, doesn’t mean that you need to.
Didn't we used to hate our parents always saying: "If Joey jumped off a bridge, would you?"
Ugh! The Worst! But, they were right no?
A lot of it boils down to fear of missing out (FOMO). You see your peers buying real estate and you want to get a piece of the action.
But are you actually ready? Even if it seems like a great time to invest in a condo, market-wise, you need to take a good, hard look at your own budget.
If buying doesn’t actually make personal financial sense, there’s nothing wrong with renting for the time being.
Buying The Wrong Condo
Buyers often fall in love with the wrong condo for their lifestyle. Often, this means a condo that is brand new. Other times it means a condo that is in the wrong location.
Or a condo with too high condo fees.
There’s no denying the benefits of a brand-new condo, but sometimes buying an old condo can be a better choice depending on your circumstances.
For one, new condos are sometimes built too quickly. Older condos can also often be bought for cheaper and then fixed up without breaking the bank.
Buying a condo in the wrong location is just as big of a mistake. Just because you love the building itself, doesn’t mean you should buy the condo if the building is situated in a poor location.
Did you buy in the suburbs based only on price? Now you have a 45 minute per-way commute to downtown every day.
That's 30 hours a month! Or, 15 full days a year! Paying the extra $50,000 for the new condo downtown might of made more sense.
Experts say location, location, location for a reason.
There’s no reason to start looking for a new condo if you aren’t already pre-approved.
The real estate market moves extremely quickly, especially in larger markets. Talk to a mortgage broker, get pre-approval, and then start looking.
For more on condo financing, please jump to our new guide.
Knowing what you can afford ahead of time will help make buying a new condo that much easier.
Not Researching Condo Rules and Fees
So you found the perfect condo – you should just go ahead and buy it, right?
Not so fast! A major condo buying mistake is signing before you research the condo’s rules and fees.
The vast majority of condos have some sort of homeowner’s association which makes rules and regulations, and sets fees, for residents. For instance, some condo neighborhoods have strict rules regarding pets and even patio gardens.
If you’re not used to answering to someone else, it’s essential to look into how lenient or strict these rules and regulations are.
Ask your Realtor or building sales team for condo association rules and read them carefully.
No Buyer’s Representation
Perhaps the biggest trap people fall into when buying a new condo is failing to seek buyer’s representation.
There’s no reason not to work with a Realtor. Choosing to work solely with the listing realtor means that you’re working exclusively with someone representing the seller and the seller’s best interest.
That said, for some new build developments, a Realtor may not be necessary. But, you can still reach out to one to ask about the area and builder.
Although they won't get a commission, they'll likely help you out in the hopes that when you sell you will reach out to them.
If buying a resale condo, hire your own realtor so that you’re working with someone that owes you their fiduciary duty.
Bonus Trap: Research Builder
If you're buying a brand new condo, make sure to research the builder.
Check them out on Google News, their website, forums, and Facebook. Make sure that they have a history in the area, and can deliver on what they are promising.
Ask them directly: Have you built in the city/area before? Have you ever been late in construction or delivery?
There’s no denying that buying a new condo is an exciting endeavor. Yet it’s not something you should jump into willy-nilly.
Though there are literally dozens, if not hundreds, of different factors to take into consideration, the five outlined above are among the most important (and overlooked) when it comes to buying a new condo.
Avoid making these mistakes and you’re sure to be more than happy with your final decision.