Each of us makes our fair share of mistakes. How are we supposed to grow otherwise? Investing in real estate is one of those situations where you cannot learn until you make the mistakes. Condo buying is one situation where you definitely need to learn through trial and error.
Here are six mistakes condo buyers make that you can learn from.
1) First-time condo buyers like to trust the floor plan. You cannot do this. The square footage listed is based on the external walls. They will also include the terraces or balconies as part of the overall floor plan. You can trust words. You cannot trust the listings. You need to check the place out for yourself and measure it. You never trust the brochure. The builders can change things on a whim.
Chad is negotiating a deal. He finds the floor plans are not what is listed. He can either negotiate a reduction, or he can get out of the deal.
2) You always get a lawyer beforehand. We cannot tell you how many buyers make this mistake. They figure they can handle the situation on their own. You do this and you can say goodbye to any real form of negotiation. Legal representation gives you the chance to take care of the essential concerns.
3) You have the legal right to know when they will be delays. Ten years ago this was not possible. Ten years ago, you were on your own. Now, the builders are legally required to let you know about any delays. You can decide to either stick it out, get compensated for it or withdraw from the deal.
4) You will not get a warranty on your condo. You can get one in writing. In fact, you are strongly encouraged to do so. You will need to go online to check with your building manager. You need to make sure he or she is registered. Registration is essential, particularly, when it comes to conversions properties. Most states are not legally bound by warranties. Canada is the only exception to this rule. They are currently looking to make changes to this law. The legal issues are one reason to get it in writing. You will be covered in case something happens.
5) Are you ready to sign the deal? You need to be aware of the closing costs. The closing costs are estimates, nothing more. The building manager has the right to raise the costs closer to the date of possession. You need to read the fine print. You need to get a cap on the essential items. You can get rid of the items you do not need. Many of the adjustments are made after-the-fact. You need to know how much everything will cost you beforehand. Once you sign the deal, the manager is free to do what he wants.
6) Buying a condo at the wrong time is another part of the trial and error process. You need to start the process as early as possible. You need to work with a realtor who specializes in VIP sales. The builders will generate interest by pre-sale funding. The early birds can come in and pick. You need to get invited to one of these parties. After the party ends, about half of the condos are pre-sold. The remaining condos for sale are double the price. You need to move quickly. Investors who are unsure of this step make a number of mistakes. If you are unsure about this part, it is better to stay away.