Buying a condominium for the very first time is exhilarating. However, it is vital to take your time to research and consult expert advice to avoid making mistakes. Because of the high cost of properties in Vancouver, a condo is the best alternative for many first time buyers. The average price of a condo in many Canadian cities is around $520,000, and the average price of a condo in Vancouver is $650,000. Before taking the plunge, there are few things that you need to take into consideration to avoid the mistakes that most first time buyers make. The most common mistakes made by first-time condo buyers in Vancouver are:
Purchasing the Condo Immediately
Buying a condominium too soon is one of the most common mistakes that first time home buyers make. This usually happens when these buyers, who are mostly young people, see their peers buying and so they do the same out of the fear of missing out. This mistake can prove o be very costly, and you must be very careful. Before you snatch up that gorgeous condo, first make sure that your finances are right. If your budget is not right, it’s better to rent until you get it right.
Researching an apartment in Vancouver before getting a mortgage preapproval.
It is a bad idea to go shopping for a condo before your mortgage is preapproved. The real estate market is very dynamic, especially in a big city like Vancouver. Also, getting the finances for a condominium is relatively hard compared to let’s say a single-family house because the majority of banks and lenders do not finance condo purchases. Because of this, condos are bought using cash only because of this. You can also get a private mortgage to purchase a condominium, but this can be quite expensive. The lenders will demand a 20% down payment for buying the condo. Buying a condo is advised if you at least have the money required for a down payment.
Hiring a Family Member, Friend or Relative in Real Estate
Buying get a condo in Vancouver is different than purchasing a family house or even a vacant piece of land. The contract for purchasing a condo is very different compared to other types of homes. For instance, when you buy a condo, your community will require you to sign a contract over and above the sales contract. This is to ensure that you concur with the rules and regulations of the city. Because of this, it is paramount to work with a family member or a friend who has experience in the buying and selling of condos. They will give you guidance and ensure that you do not overlook essential documents.
Accepting the First Mortgage Rate Buyers
When you apply for a mortgage as a first-time buyer, the banks will look at your income as well as your expenses to determine what package you can afford. They will also scrutinize your credit history to determine if you are trustworthy. They will use this information to determine how much you can be able to afford it. For first-time condominium buyers, it is difficult for the lenders to accept to finance your purchase because of limited funds and lack of credit history.
Buyers wanting to buy with a down payment of 20%
Down payment for a condo in Vancouver range from 5-20%. The down payment you pay influences the mortgage rate you get, the amount you pay monthly, and the house insurance you pay. So it is better to spend as much as possible upfront it will make your work a lot easier. So if you are seeking to buy a condo, it is better to have at least 20% down payment for the property.
Inflexibility Regarding Neighborhoods
When purchasing a condo, it is crucial to take into consideration the surrounding neighborhood. You want to select a unit that is in a safe and accessible place, having all the necessary amenities. Look for an area that has a shopping center, a grocery store, and a park, if possible. The community should suit you; for example, a young professional should not select a unit where there are many retirees.
Buyers Do Not Have Deposit Cash at the Ready
If you don’t have at least a 20% down payment for buying a condo, then it is a bad idea to buy a condominium. It will put a lot of financial burden on you, and you will be required to pay a lot more every month, and the mortgage rate will be higher. It will be more expensive for you in the long run, and you would instead first save the down payment before you go shopping for a condo.
Believing That The List Price is the Actual Price
The list price or the advertising price is usually an estimate of what a seller intends to get from the purchase of a condominium unit. The list price can be higher or lower than the actual cost. It is best to contact the real estate agent/ seller to get information on the actual cost before proceeding with your plans.
Not Creating a Maximum Budget in the Bidding Process
During the bidding process, you must have a maximum budget to increase your chances of securing a mortgage and increasing the lender’s and the seller’s confidence in your ability to complete the payment in time.
Buyers underestimate the Cost of Owning a Condo
Owning a condo entails paying monthly utility fees for water, electricity and gas, maintenance fees for cleaning and doing repairs, security fees, insurance fees, parking fees, among others. A first-time buyer needs to take into account all the amount of money he will be required to pay before committing themselves. Property tax is also required every year, and this will be incorporated in your mortgage.
Buying a condo, like buying a home is an investment, you must make sure that you conduct due diligence so that you can get the best value for your money. By taking into account the points above, you will be able to find a suitable condo in Vancouver that meets your needs.