How Do I Buy A Condo?

I want to buy a condo; read this article and find out how.

Congratulations! You've found a great new condominium and you're ready to take the plunge into homeownership. Now what do you do? The process from finding your dream place to live to being handed the keys to your new home includes making an offer, agreeing to a purchase and sale agreement with the seller, being approved for a mortgage, and the closing.

To make sure the seller of the condominium you want to buy accepts your offer, you have to offer a figure that is an accurate price for the property and fair to both you and the seller. Your real estate agent is a good resource to help you determine a fair price. Ask the real estate agent to provide you with a list of properties and their selling prices similar to yours in size, amenities, and location. This will tell you what other properties have sold for and give you a ball park figure to work with. Take into account the current market conditions. You want to determine if it is a buyer's or a seller's market. If you're lucky, it is a buyer's market, meaning there is a low demand for real estate and properties are selling for far less than the market value. However, most likely, it is a seller's market where property is in demand and selling close to or at market value.

Once you decide the price you will offer for the property, you are ready to make an offer to the seller. Your real estate agent can help you write the offer letter to the seller. The offer will specify the amount of time the seller has to accept, decline or counter to the offer. The offer will also state that once the price is agreed upon, you, as the buyer, have a period of time to get the property inspected. This time period is usually a week. The offer letter will also include a clause that allows you to revoke your offer should the property not pass inspection. To find a qualified home inspector, contact the American Society of Home Inspectors. If you do revoke the offer, the seller is required to return any deposit you have paid for the property.

After your offer has been accepted and the property has passed inspection, your next step is to agree with the seller on a purchase and sale agreement. At this point, you should enlist the services of a competent real estate attorney. In most cases, the seller's real estate agent or attorney will draft the purchase and sale agreement. Your real estate attorney's job is to review the purchase and sale agreement to ensure that it represents your interests. You will also want your attorney to review the condominium documents to make sure that you agree to the rules you will have to live under if you purchase this property. The purchase and sales agreement will specify a description of the property, the appliances that are included in the sale, the selling price including what you have paid for a deposit and what you will pay at the closing, when the title will be transferred, and any other provisions.

Now that the purchase and sales agreement is signed, you need to prepare for the closing. This involves getting financing for the property from a mortgage company. The mortgage company will want to know how much you will be paying for the down payment, your credit history, your income, and any other assets that you have. You should shop around for a mortgage with the best interest rate and lowest closing costs that you can find. You should decide whether you want to pay points. Paying points lowers the interest rate that you pay because you pay the money up-front at the closing. It is usually only a good idea to pay points if you plan on living in the property for five or more years. It takes this long to earn back the savings in interest payments.

After you and the mortgage company have agreed upon the terms of your mortgage, it is time for the closing, the last step in the condominium buying process. Just prior to the closing, you should take a walk through of the property to make sure that any repairs you requested have been done. You should have your attorney represent you at the closing. At the closing, you will sign a Settlement Statement. This statement spells out the terms of your loan and all of the closing costs. Since you will be held responsible for any document that you sign at the closing, make sure that you understand them. Have your attorney explain any document that you don't understand to you.

After all of the documents are signed, the seller will hand over the keys and the property is yours. Congratulations. You are now part of the American dream of homeownership and mortgage payments.

© High Speed Ventures 2011