Recently, I wrote a post for the Lehigh Acres Gazette titled, “Deborah’s Hot Tips For First Time Homebuyers.” If you haven’t read the post, I mentioned that the “type” of housing that best suits your lifestyle needs should be the first consideration. Once that decision has been made, the process begins to fall into place. After all, if you just search through all housing possibilities, you will feel completely overwhelmed as a first time homebuyer.
For this post, I would like to focus on a very popular type of housing: condominiums, or “condos” for short. What exactly is a condo and why is this a popular option for first time homebuyers? A condominium is a term that loosely means “property owned together.” A condo may be an apartment, house, villa, townhouse, loft, semi-detached/detached or hotel condo. I know that’s a lot to think about so just focus on individual units with common areas in between that are owned by each member of the community.
When considering purchasing a condo, I must advise that the main focus, at least initially, should be the financial considerations. You have to weigh the total monthly cost of condo ownership rather than just focusing on the list price. Many first time homebuyers are unaware that in addition to mortgage payments (if you are not paying cash for your condo purchase); condo owners are responsible for property taxes, insurance, maintenance or HOA (homeowners association) fees and possibly special assessments. So if you choose to purchase a condo, make sure you are not deceived by marketing tactics that may show a low or very attractive list price because there may be high maintenance charges that go along with the purchase. Choose a real estate professional that is familiar with condo sales and the condo community that you choose to purchase in.
Speaking of condo communities, the location of the condo community is very important. Each community has its own “theme” or ambiance. For an example, I regularly show condo properties in a highly desirable community called Gateway. As a research exercise, click on this link; check only the box on the left for “Condos/Townhomes” under “Property Type.” Choose “Resale” for the status type. At the time of writing this article, you should see my information in the right column under “Free Search Help.” This is an easy free tool when searching for condos. Next, I chose a non-designated listing for you to review.
The list price is at the top (for this example, it is $171,500), along with the name of the community. Most first time homebuyers will really only focus on this, the list price. Below the image, you will see that I have placed a red box around the maintenance fee for this subject property of $825 per month. Each condo community will have its own fees and what is included for this fee.
When you look at the Unit Amenities, this listing clearly states what is included for the $825 per month maintenance fee. I have outlined the details in red. I have seen maintenance fees from $100 per quarter (or $33.33 per month) and up. So look closely when you are researching listings to see if the listing truly fulfills your housing needs and your budget!
Each HOA has governing documents and rules (the names may vary depending on where you live but typically are called “covenants, conditions, and restrictions” [CC & Rs], “bylaws,” “master deed,” “rules and regulations,” “house rules,” and so on). You will often find that not only do you have to apply and be approved for a mortgage to purchase the condo of your choice, but you will also have to apply and be approved by the HOA to move into the community. This comes as a surprise to most new condo buyers. Condominium buyers should thoroughly read and comprehend the governing documents and rules that are binding on all homeowners within the community. Co-op buyers should inquire about “first right of refusal,” which may give the board of directors the right to evaluate prospective owners and acquire a for-sale unit if they are deemed unacceptable.