First-time homebuyers have more choices than ever before when it comes to picking a home. While for many, a home translates to “house” there are other home ownership options to consider. Condominiums, or condos, are an excellent choice for first-time buyers for several reasons. Depending on where you live, they might be more widely available than detached homes. Here we’ll go over 5 reasons condos are great for first-time homebuyers.
In most places, a condo has a lower purchase price than a house. You might think that this is simply because of less square footage and decreased privacy, but depending on the development you can have it all for a much lower price. A lower cost will also mean a lower minimum down payment required for a mortgage. This will save you money you can spend on other things like appliances or furniture.
Condo properties all have a property management body typically known as a Homeowners’ Association. These organizations have rules for living in the community and also charge an additional fee. For that fee, the HOA of your condo building will handle upkeep of all public spaces and building exteriors. This can include parking structures, fencing, gates, landscaping, outdoor lighting and even more depending on the particular complex.
Even though you don’t own the entire property, you own your own condo unit. This means you have the freedom to customize the interior as you see fit. Paint, paneling, hardwood floors—it’s all up to you. Unlike with many rentals, you can drill as many holes and hang whatever you’d like on the walls. Some condos will even allow you to replace built-in appliances like stoves with those of your choice, giving you even more options for customization.
Some condo communities offer excellent amenities to their residents. Spas, swimming pools, tennis and basketball courts, fitness centers and even small general stores are all things you can find included in some complexes. There might also be communal space available for hosting parties and other large groups as well as organized community events. Each condo community has different offerings and different ways of paying for them, so research carefully. You may need to pay a monthly, quarterly or annual fee to the HOA in order to access the amenities.
If you eventually decide to move out of your condo, you can keep it as an investment property. With the increasing popularity of private home vacation rentals, you can generate excellent side income by renting the space to others. Just make sure that you’re following all the community rules for vacation renting. It’s also a good idea to consult an accountant to help you take the best advantage of the investment opportunity without getting in tax trouble.
The availability of condo property depends highly on area. However, in some parts of the United States, condominium real estate is even more active and popular than it is for detached single-family homes. This means there are plenty of qualified real estate agents and brokers who specialize in finding you the perfect condo for your budget and lifestyle needs.
You may have heard the term “escrow” in your experience with real estate. You might know it’s an account, but what exactly does it do for you as a buyer? An escrow account is what your lender uses to make payments on things like property taxes, insurance, and more. The lender collects your monthly mortgage payment, and part of that cash goes into an escrow account.
This type of account is an excellent option for homeowners because your bills relating to being a homeowner will all be paid without you having to do anything. It makes budgeting a breeze because there aren’t any complicated calculations involved. Every month, your lender collects 1/12 of the estimated tax bill and insurance cost for the home. The rest of your mortgage payment covers the principal and interest on the loan of the house.
You’ll find that most lenders require you to have an escrow account. The purpose of the account is to keep the home safe as collateral for the loan. The bank has an interest in the proper insurance behind the property. The taxes also need to be paid on time in order to keep the property in good standing. If the taxes aren’t paid, a tax lien will be placed against the house.
You’ll receive an annual statement from your lender that will show you how much money was collected and placed in your escrow account. Escrow payments often change because insurance premiums and taxes tend to change quite frequently. The amount being put into escrow may change a few times throughout the year. The lender keeps track of all this for you, saving you some time.
Whether you have an escrow account or not the bills that are included must be paid one way or another. It’s a good idea to speak with your lender before you buy a home to find out that bank’s procedures around these insurance and tax payments. Property tax and home insurance are items that you’ll need to budget for regardless of how your lender does things. An escrow account can be much more convenient for many buyers.
Escrow is just another one of the many essential terms that you’ll come across as a homebuyer. Knowing the advantages and purpose of the account helps you to be informed as you dive into the home buying process.
If you’re remodeling because you’re ready to sell your home, it’s better to keep colors neutral and update carpets and flooring with easy-to-clean materials that will match many styles and colors. There are also rooms and areas that are more suited for a full-scale remodel, such as the kitchen and bathroom. Here are a few ways to get the most out of your home remodeling project before you go to market.
If it’s been some time since you updated the kitchen, start your remodel project there. Both bamboo flooring and natural stone are popular products that will last and that clean easily. Choose neutral colors if you’re selling your home or go bold with your favorite colors if you’re updating everything for yourself.
Update the appliances to energy-saving appliances. For a larger kitchen or a kitchen that you will enlarge, consider a French door fridge with a double freezer drawer and a gas stove with six or eight burners, complete with a double oven. If you must go with electric, consider a stovetop and purchase a double oven that is built into the wall.
When looking at new cabinets, you might consider upper cabinets that go to the ceiling. However, keep in mind that the top shelves are harder to reach. For the bottom cabinets, choose a set with drawers. This ensures that you have the right amount of space for the items most used and stored in the kitchen.
If your bathrooms are cramped, consider enlarging them. Use adjoining closet space or add on to the house so that you can redesign the layout for the bedrooms and bathrooms. If you’re adding on, consider combining two small bedrooms into one large bedroom, den or office space with its own bathroom.
Choose natural stone tiles for the showers. They last for a long time, and if you choose neutral colors or even browns, they’ll match many color schemes and stay in fashion longer. Update the toilets to water-saving, high-pressure flush toilets. Update the vanities to something decorative instead of the typical square vanity with a single sink and cabinet, especially if you are enlarging your bathroom.
Consider adding a stand-alone shower in the master bathroom and adding a jetted tub. Large 5-foot showers with two or even three shower heads are popular. When you choose flooring, go with a natural stone tile that will withstand the humidity better. Add an exhaust fan with heat built into the fan. These are perfect for the winter months when the bathrooms always feel cooler than the rest of the house.
Buying your first home is undoubtedly a long and complex process for someone who has little to no experience in the subject. Your average first-time homeowner learns as they go, with the help of their real estate agent and mortgage lender.
But, even so, first-time buyers often make many mistakes along the way that they could have avoided with prior knowledge and preparation.
In today’s article, we’re going to cover 5 of the most common mistakes that first-time homebuyers make when purchasing a home. From the first house you look at up until closing on your first home, we’ll cover common mistakes from each step of the way to give you the knowledge you need to make the best home buying decisions.
Once you decide that you’re interested in potentially buying a home in the near future, it’s tempting to hop online and start looking at listings. But, searching for your dream home at this stage is a poor use of your time.
It’s best to use this time to start thinking about the bigger picture. Have you secured financial aspects of owning a home, such as a down payment, a solid credit score, and two years of steady employment history?
You’ll also need to have a clear picture of what you want your life to look like for the next 5-7 years. Will you still want to live in the same area, or will your job lead you elsewhere?
These are all questions to ask yourself before you start house hunting that will inform your process along the way and make your hunt a lot easier.
It’s a common mistake for first-time buyers to go into the house hunting process without a clearly mapped budget. You want to make sure that after all of your expenses (mortgage payment, utilities, bills, debt, etc.) that you still have leftover income for savings, retirement, and an emergency fund.
Make a detailed spreadsheet of your expenses and determine how much you can afford each month before you start shopping for mortgages.
While it may be tempting to buy the most expensive house you can get approved for, there are a number of reasons this might be a bad idea for you, financially. Stretching your budget each month is putting yourself at risk for not being able to contribute to savings, retirement, and emergency funds.
Furthermore, you may find that the extra square-footage you purchased wasn’t worth having to cut corners in other areas of your life, like hobbies, entertainment, and dining out.
If you’re currently renting an apartment, you might be unaware of some of the lesser-known costs of homeownership. Your chosen lender will provide you with an estimate of the closing costs, which you’ll have to budget for.
However, there are also maintenance, repairs, utilities, and other bills that you’ll have to figure into your monthly budget.
While it may seem like an act of goodwill to give the seller the benefit of the doubt when it comes to things like home inspections, it’s usually a bad idea to waive contingencies.
The process of purchasing a home, along with a purchase contract, have been designed to protect both your interests and the seller’s interests. It isn’t selfish to want to know exactly what you’re getting into when making a purchase as significant as a home.
For those who intend to list a house, it helps to establish realistic expectations. That way, you'll have a good idea about what to expect during the home selling journey.
Now, let's take a look at three tips to help you manage your expectations as you attempt to sell your house.
1. Understand the Housing Market
You may own a great home, but even a top-notch residence may be difficult to sell based on the current housing market's conditions. If you allocate time and resources to study the real estate market, however, you can differentiate a buyer's market from a seller's market. Then, you can map out your home selling journey accordingly.
In a buyer's market, there may be an abundance of houses and a shortage of buyers. Therefore, sellers may need to price their houses competitively to stir up interest from buyers.
Comparatively, in a seller's market, there likely is an abundance of buyers and a shortage of first-rate houses. This means a seller probably won't have to wait long to receive offers to purchase after he or she lists a high-quality residence.
To distinguish a buyer's market from a seller's one, you should look at the prices of recently sold houses in your area and find out how long these properties were listed before they sold. This information enables you to review the level of interest in properties in your city or town and can help you determine whether you're preparing to enter a buyer's or seller's market.
2. Know Your Home's Strengths and Weaknesses
You may believe your home is flawless, but buyers may quickly identify problems with your house. Fortunately, a seller who conducts a house inspection can address any potential issues before listing his or her residence. Home inspection results may help a seller establish realistic pricing expectations for his or her house too.
During a house inspection, a property expert will examine a residence both inside and out. This property expert next will provide a homeowner with an inspection report that details his or her findings. With an inspection report in hand, a homeowner can correct underlying house issues before he or she adds a residence to the real estate market.
3. Collaborate with a Real Estate Agent
A real estate agent understands the opportunities and challenges of the home selling journey. As such, he or she will help you set expectations for this journey, as well as help you make the most of available home selling opportunities and resolve property selling challenges.
Typically, a real estate agent will meet with you and find out what you want to accomplish by selling your home. He or she next will craft a personalized home selling strategy for you, promote your residence to potential buyers and do everything possible to help you maximize your home sale earnings.
Manage your expectations as you proceed along the home selling journey. By doing so, you can limit the risk of encountering home selling problems and boost the likelihood of a successful property selling experience.
