Apartment hunting can be a very tedious and stressful task. Although all young professionals are looking for home ownership security, the path to it can be a thorny one. Depending on your chosen location, you might struggle more or less until you have the keys to your ideal home.
Naturally, looking for apartments in cities such as New York, San Francisco, or Los Angeles can be a bigger challenge than searching for apartments in smaller towns around the country. This results from property scarcity and the continually rising prices of real estate since many people are looking to relocate to these metropolises.
What are the obstacles you should look out for before starting your buying real estate journey? Well, stick around because we will be discussing some of them and advice on how to overcome them.
Choosing between a condo and a house
First of all, you should get to know the difference between an apartment and a condo. The distinction is quite simple. They are essentially the same property, but the only feature distinguishing them is the ownership. If you own it, it is a condo, and if you rent it, it is an apartment. For more information, check out this link: https://www.investopedia.com/terms/c/condominium.asp
Now, buying a condo and buying a house are two different ball games. Condos can be much cheaper and easier to find in bigger cities, but very inconvenient if you decide to have a larger family. Additionally, they are much more likely to be surrounded by useful amenities such as shops, restaurants, hospitals, etc. If you manage to luck out and find one in a more luxurious complex, they can even come with things like fitness centers and pools.
A drawback to owning a condo is that while you may hold your share of the building, you do not own all of it. Namely, condominium owners are still required to pay maintenance fees monthly for the building, which might increase over time and add to your costs with the mortgage. Also, considering you live with others in the same building, frequently, you are required to cooperate with neighbors on communal matters and sometimes even forced to accept others’ decisions that you might not like.
A house, on the other hand, is entirely yours. All potential maintenance and its costs depend on whether you want to do it or not. You don’t share walls with neighbors who love playing loud music, and you are not required to ask their opinions on things like parking spaces or elevator repairs. An additional bonus, in most cases, you have your very own backyard, which, if you have a family, could be ideal for kids! Read all about the pros and cons of buying here.
Of course, these benefits come at some cost. Houses tend to take up a lot more surface than condos, which means utility bills can be much higher. After all, there is a big difference in heating four rooms and two floors. Besides, houses require more financial investment in the long run. That is, if you want to keep or raise its resale value, you need to make sure no leaks go unnoticed, no termites run free, and all the wiring is up to date.
Lastly, due to land scarcity nowadays, most houses are built on the outskirts of big cities or in the suburbs outside of them. If you happen to have a job in the city, commuting to work could add to the living costs. Not to mention, the distance from conveniences such as shops and restaurants could negatively impact your social life. Apartments such as Norm Ebenstein’s prime commercial property offer all of that and more.
Challenges of buying real estate
Okay, so you have made your choice, and you know exactly what kind of property you need and want to buy. Now what? Well, unfortunately, choosing is the easiest part. The second step of the journey requires a lot of documentation and bureaucracy that you need to prepare before you become a homeowner.
Firstly, make sure your finances are in impeccable order. What that means is that you should have things like your tax returns, bank account statements, and salary slips prepared to be given on demand. Yes, these are things they usually ask for later in the process, but considering how difficult and lengthy it takes to obtain them, it is better to have them on hand.
Secondly, know your credit score! This might seem simple, and it is why many people overlook it, but it can have disastrous implications in the long run. A lot of people think they know their credit score, but in reality, this number can change fast depending on your decisions. To prevent being unpleasantly surprised by increased interest on your mortgage, make sure you know what you’re in for.
This brings us to our next point: securing a mortgage. Different banks have different policies, which also differ per person and their situations. Informing yourself in time will save you the headache of dealing with paperwork while also signing a contract. In cases like these, financial advisors are your best friends.
Adding on to that, make sure you get your property appraised before you sign a contract. This will determine the market value of your future home, which will factor in on your mortgage and how much the bank will decide to loan you.
In case the appraiser estimates your property’s market value lower than what the bank decides to give you, you might be looking into covering the so-called appraisal difference with your own cash. Be smart and think ahead.
Last but not least, have an attorney look over your contract before signing it. While after all the checks, there should not be any surprises, it doesn’t hurt to be safe and legally protected when undertaking a big feat like this one. After all is said and done, you can enjoy your life in your new home!