By Dan Bergman
Buying a condo or co-op is exciting, but there’s also a deeply emotional element to the process, especially for first-time buyers. However, if you know what to expect, you’ll be better able to deal with the ups and downs. Here’s how I counsel my clients.
Prepare to Compromise
Keep in mind that you’re constrained by the existing condos for sale. One thing to do is draw up a list of “must-haves,” which shouldn’t be more than four or five things, and then another list of “wants,” which can be much larger. If a unit doesn’t check all your must-haves, strike it from your list. If it doesn’t have a few of your wants, that’s probably fine – they’re wants, after all.
Finances, Finances, Finances
Even if you know that buying makes sense for you, you’re still going to write a huge check, likely the largest you’ve written in your life. That can totally freak people out. However, there are steps you can take to be certain, even as your heart’s jumping:
- Get pre-approved, so you know the upper limit of what you can afford. Then really scrutinize that amount and figure out an amount you’re comfortable with. It’s okay if it’s far lower.
- Factor in taxes, insurance and association dues. When you plot out how much you can pay per month, add these in. They are real expenses, so treat them as such! If the whole kit-and-caboodle comes in under your threshold, there won’t be any surprises.
- Remember that you’re building equity. When you rent, you aren’t. Factor that into your financial considerations when making a decision whether to buy. Understanding this concept can give you much more confidence.
Be Aware of the Time Commitment
You’ll be spending evenings and weekends out on the hunt. A dedicated search means dropping dinner plans if a good prospect comes on the market, so you can be the first to see it. It means filling out paperwork, sending faxes and talking at length to lenders over your lunch hours. These things take time – which can upend your normal routine. It’s worth it, but be aware that it’s coming.
There’s a Possibility of Disappointment
In a busy market, you might not have the winning offer in a bidding war. Or the seller might accept your offer verbally, only for an all-cash buyer to swoop in and take it. Or, you could make it to the inspection, only to find problems with the foundation, that cause you to back out of the deal. Or you find that your budget isn’t high enough for you to get your must-haves.
There’s no sense in sugar-coating it. Searching for a home can be hard. Your agent should be there, helping you every step of the way – but even in the best of times, things do crop up. Some of them are resolvable, some of them are not. Be ready!
Every Step is Stressful … To You
Since you’re buying a condo for the first time, every step will seem momentous, from putting down an offer to negotiating with a lender. That’s totally normal. But, for your real estate agent this should be far from their first rodeo.
What does that mean? Lean on your agent. You’ll have tons of questions – and your agent should answer kindly and patiently. They should let you know if things are going smoothly – or if a red flag is popping up.
For a first-time buyer, the importance of an experienced agent who works as your advocate can’t be emphasized enough. A good agent will make the process far easier.
Talk to People Who’ve Already Bought
If you have friends who’ve already bought, take them out to dinner and ask them for the low-down. It can be immensely comforting to know you’re not the only person who’s gone through the process. Friends and family can be great sources of emotional strength and encouragement. They can help you avoid the trap of getting too caught up in the short term snags that develop in every deal, as well as give you some perspective on the process.
For the first time condo buyer, it’s important to prepare for the emotional ups-and-downs of the process, so that you’re always making your best decisions. Your real estate agent, your research and your friends and family can help you do just that.
Dan Bergman is a real estate agent with Redfin, a national real estate brokerage. He serves the northwest suburbs of Chicago, where he works to find homes that meet his clients’ needs and goals at a fair price. A lifelong Chicagoland native, Bergman enjoys mountain biking, hiking and good coffee. And, of course, he’s a Bears fan!