Buying an apartment can be a long, complicated and frightening process, and it is important to be prepared. Knowledge is power when it comes to negotiating the difficult world of apartment prices, interest rates and mortgage loans. For a first time apartment buyer, there are many factors to consider before you buy. The more information you can gather before you start shopping, the better off you will be.
Every Situation is Unique
Every homebuyer will have a different set of circumstances, and it is important for the lender to consider those factors. Some homeowners may plan to move in a year or two, and they may be able to benefit from a variable rate mortgage. Others will plan to remain in their home for decades, and those home buyers may benefit from the stability of a fixed rate mortgage and its predictable and stable monthly payment.
It is also important for those buying a first home to factor in the additional costs of the mortgage when deciding how much they can afford to pay. Things like closing costs and the high price of private mortgage insurance can drive up costs and eat into funds that would otherwise be available for home improvements, furnishings and other essentials. In some cases sellers may be willing to pay some of the closing costs, and some lenders will be able to negotiate those closing costs downward. The key is to ask those questions before the closing date arrives, and to be prepared to search for a better deal if necessary.
First time buyers should also be on the lookout for any hidden fees. These small nuisance fees can add up to hundreds of dollars on closing day, so be sure to scour your paperwork for any such fees. If you are unsure about the legitimacy of any charge be sure to ask for a valid explanation. Again, an experienced real estate attorney can provide valuable insight into which fees are reasonable and which are out of bounds.
And of course first time home buyers should not lose sight of the home itself in the quest for the perfect mortgage. Any defects should be pointed out to the seller well before the closing is to take place. The costs of every needed repair should be carefully negotiated prior to the purchase, and buyers should always follow up to make sure that all requested repairs have been made. A home is a major purchase, and it is important to make sure that everything has been taken care of before moving in.
What to look for
- Who is responsible for maintenance of the common areas – is there an active body corporate? Do they have a fund for maintenance? Is there a permanent building manager on-site or on-call at all times? Find out what body corporate fees you would be expected to pay and ask about the body corporate rules. Find out also if you have to pay for maintenance of your own unit, or for major maintenance work, for example, painting.
There will be cost or fee for maintenance of amenities and facilities available in the apartment. In most case, apartment owners form an association of apartment owners and association will take care of maintenance of apartment and its amenities. Usually the more the number of flats in an apartment, the less will be maintenance charges. Maintenance cost includes water taxes, security fees, lift, electricity, lighting available for common area etc.
- Living in close proximity with your neighbours. Find out about the neighbours and decide if noise could be a problem. Are most of the apartments rented – with a constantly changing parade of neighbours? The type of neighbours could lower the value of your apartment.
Talk to the neighbors if you get a chance. If only I had done this at a few of the places that I lived, I never would have moved in. Between finding out about the guy that sings love songs to his old girlfriend at 3am to the chain smoker in the apartment next door, you can learn a lot just by being friendly with one of the neighbors. Ask them what they think of the place, how the landlord is, etc. – get a feel for your new home before you sign anything.
- Ask about a recent meeting of the home owners association. Find out what the hot issues are and if members are fighting tooth and nail. You may want to keep looking– nobody wants to live where neighbors are at each other’s throats.
Talk to residents. Walk around on a Saturday afternoon and chat up some of your potential neighbors. If you tell them you’re thinking about buying there, some may be very candid with you about life in the community. Even if they’re not, you can often read between the lines and sense any problems or discord in the complex.
- How close is the building to shops, cafes, nightclubs and other amenities? Is this going to impact on noise, for example is the building in the main nightlife area of town? Invariably, the nature of apartment living means there will be some noise you have to contend with.
- Is there car parking and do you have to pay extra for it?
If having a parking spot is important to you, ask if you get one. A lot of apartment buildings do not have specific spots for everyone, so you should make sure you get one if you want one. Remember, the street is a public property that belongs to the community, not to the nearest apartment
- What security measures are in place, for example, can anyone walk into the building? Are there any security cameras?
- Do you have a view and sunlight, or are you blocked by other buildings or facing the wrong way for the sun? Find out if there are any pending resource consents that will affect your apartment block, for example, plans to build a high-rise hotel next door.