Month: November 2018

There are plenty of perks to owning your own condo. Along with opening up the opportunity for a wise investment, purchasing a condominium also provides the opportunities for close-knit communities and incredible freedom.

See for yourself why condo living is so hard to beat.

What Condo Communities are Like

When you purchase a condo, you are investing not only in an individual unit but also a terrific community.

Condo homeowner associations, in particular, provide residents with a phenomenal opportunity to get to know the neighbors. Every unit owner is an automatic member of this association and therefore is invited to attend regular meetings to discuss community matters and get to know one another.

Community amenities also open the door for residents to cross paths. Many condos feature common spaces, such as fitness centers, pools, and resident lounges, which are open to any unit-owner or renter.

What you Have Control Over in a Condo

Overall, residents have a high level of control over their condo if they are the owners of their unit.

As long as unit owners abide by the rules set in place by their homeowner association, owners tend to have a fair amount of control over their interior unit. This involves the ability for owners to customize their space and manage renovation projects.

The HOA is then responsible for managing the exterior and common elements of the unit, such as hallways and lobbies.

How Condos Provide More Freedom Than Apartments

Apartment residents lease their units from a company or person, which significantly restricts the freedom one has when it comes to what they are allowed to do within their home.

Apartment companies tend to implement stricter regulations, leaving residents with a lot less opportunity for personalization within their units. The company has the final say in most of the renovation and design decisions and often tend to feature more uniform apartment units.

Apartment companies also realize that renters may be less inclined to take care of their units because it is not legally their property. Most buildings will enforce fines or penalties if rules are broken or ignored to encourage residents to maintain their leased units.

Condos, on the other hand, are independently owned, giving unit-owners much more independence. The only rules that condo owners are required to follow are those set in place by the homeowners association through the codes, covenants, and restrictions (CC&Rs), which can be found in the governing documents.

While some of these rules pertain to the interior units, they tend to be less restrictive than those set in place by apartment buildings. Also, since the members of condo HOA’s are the residents themselves, the rules are agreed up and set in place to protect the curb appeal of the community and maintain property value.

Condo living opens the door to great community and freedom! Start your hunt today and become an owner of your own condominium.

If you are looking into whether condos are cheaper than apartments, the answer may not be as simple as yes or no.

To determine which property makes the most sense for you, let’s examine the financial differences between owning a condo and renting an apartment.

Is a Condo or Apartment a Better Financial Choice?

If you are considering purchasing your own condo, expect to pay much higher up-front costs than if you choose to rent an apartment. However, don’t let these expenses scare you away.

When first renting an apartment, residents are often required to cover the first month’s rent along with a security deposit. Purchasing a condo, on the other hand, generally requires a sizeable downpayment. It may also require additional expenses, such as closing costs or lawyer fees.

On top of these up-front costs, condos also require monthly or annual homeowner association (HOA) dues. While HOA membership may increase owners’ out-of-pocket expenses, HOA helps to maintain the community and improve the value of the properties.

Weighing Costs Over the Long Run

When examining the costs of renting an apartment versus owning a condo over the long run, it is evident that a condo purchase is a wiser financial move.

While monthly rental costs are subject to increase over time, a fixed mortgage rate will ensure that your mortgage stays the same over time, regardless of fluctuation in the housing market.

Also, once you pay off your condo, the monthly mortgage costs halt, and the property is officially yours. However, regardless of how long you live in an apartment, those monthly rental costs are perpetual.

Appreciation and tax benefits are two additional incentives to a condo purchase. As a home appreciates, it accrues faster than a stock might because you get the appreciation on the entire home’s value, not just the gain your down payment cash invested. Also, homeowners are allowed to deduct mortgage interest and property taxes when they file tax returns each year.

Which is the Better Investment

If you have the credit or money-up-front to purchase a condo, then you have an opportunity to make a better investment than renting an apartment.

Unlike apartment rental payments, condo mortgage payments and initial costs are going towards a personal investment. So in the long-run, condo owners will have accumulated equity to show for the expenses.

As an apartment renter, when you write that monthly check to your landlord, you are paying for temporary occupancy without any ownership. While renting may make sense for someone who cannot afford to buy or in need of a temporary place to live, it’s not the wisest move for the long-run.

While it may be difficult to answer whether condos are cheaper than apartments, it is clear that condos are a better financial move for those seeking a long-term investment. If you are ready to take the financial plunge and find the perfect condo then contact an experienced broker today!

What is a condo? For starters, a condo is not the same thing as an apartment.

While condos and apartments share similarities, both are unique and suitable for different types of homebuyers.

Overview of Condos

The fundamental difference between condos and apartments comes down to ownership.

First, a condominium, or condo, is a collection of units that are each owned individually. This is similar to homeownership; however, the unit owners live in a shared building as opposed to on their own plot of land. Condo owners may decide to reside in their units or lease them out, making them the landlords of their property.

Condominiums are managed by homeowners associations (HOA). Each unit owner is a member of HOA and is required to pay monthly fees which enable upkeep and services provided to the community. These services may include external maintenance, garbage removal, and the upkeep of amenities, such as a pool or gym.

Homeowners Associations are also responsible for establishing the rules and regulations that residents must abide by through governing documents. These documents are formally known as the Covenants, Codes, and Restrictions (CC&Rs). Before moving forward with a purchase, it is critical that prospective buyers thoroughly examine these CC&Rs to have clear expectations of resident guidelines.

Condos vs. Apartments

While condo units are independently owned, apartment units are all owned by one person or company and located in a single building. The owner of the building often hires a property manager, who is responsible for much of the unit maintenance and management. This means that they will take care of leasing out units, purchasing large appliances, and ensuring the units are up to code.

Apartment tenants pay a monthly rent, without accumulating any equity during their residence. On the contrary, condo owners set themselves up with an investment. The monthly mortgage that they owe on the house obtains ownership over their property and the potential to sell later and profit on their unit.

Many house hunters find themselves drawn to condominiums because of the impressive amenities offered. In general, condos offer a more extensive list of amenities than apartment buildings. Many luxury condos boast valet-service, coffee shops, concierge, spas, and even more. While these services are tempting, keep in mind that they will increase the costs owners and renters end up spending.

Condo Communities

While it is possible to find a sense of community living in both apartments and condos, condo communities tend to promote greater opportunities for neighbors to get connected.

First, condo residents tend to stay put longer than those living in apartments. The lower turnover rate in condo units helps strengthen neighborhood relations.

Additionally, each condo owner’s HOA membership further promotes community. Residents have an easy opportunity to come together to get to know one another and discuss community visions, goals, and guidelines.

Now that you can answer ‘what is a condo?’, you may be better able to answer whether this is the right investment for you. If you are ready to find the perfect condominium, find an experienced broker to help with the process today.

Chicago is a Great Place to Live, Work, and Play

Buying a condo or townhome in Chicago not only gives you access to extensive professional opportunities, exciting nightlife, and a legendary food scene, but it also makes you part of a historic (and ever-growing) community.

From the bars and boutiques of Old Town to the hustle and bustle of The Loop, wherever you decide to call home in Chicago is sure to combine the best of home, office, and entertainment.

So how can you go about buying a condo in Chicago? Sure, it can be a complex process just like buying a single family home, but as with any home purchase, the result is worth it. Let’s review the steps needed to buy a condo in Chicago.

Get Pre-Approved for Financing

You might be tempted to contact an agent right away, but getting pre-approved by a lender can actually save you a lot of time and hassle upfront.

If you’ve already done some research, you might think getting pre-approved is a hassle. However, gathering information early allows your lender to determine the loan amount you qualify for. And once you’re pre-approved, you’ll have a letter that you can use in negotiation with a seller to show that you’re ready and able to purchase the condo.

Here’s a quick overview of the documents you’ll need:

1. Photo ID and Social Security card
2. W-2s for the past two years
3. Tax returns for the past two years
4. Bank/asset statements for the most recent two months
5. Pay stubs for the past 30 days

While additional documents may be required, particularly for self-employed borrowers or if you’ve had any recent credit events, getting this information ready for your lender will save a lot of time.

Make Sure the Condo is Approved

Getting a mortgage for a condo requires that the condo be on an approved list, such as for FHA and VA loans, or for the condo to undergo a review by the lender, such as for conventional loans.

For FHA and VA loans, you can get a head start to determine whether your condo is eligible for that loan type. Search FHA approved condos here, and VA approved condos here.

Condo lists for conventional mortgages aren’t extensive, but that doesn’t mean you can’t buy a condo with a conventional mortgage. Your lender needs to conduct a limited review, which involves sending the condo association some paperwork to fill out. The lender will review it, and if everything looks good, you’ll be all set.

Proceed with Final Steps

Once you’re pre-approved and have signed a purchase contract, you’ll return it to the lender and complete the loan approval process. The lender will verify the information in your application and submit the loan to an underwriter for final review.

If the underwriter requires additional information or explanations, you’ll be informed and should do your best to address these requests (called “conditions”) as quickly as possible so that your loan can proceed. Once conditions are cleared, your loan will be approved, and you’ll have the clear to close.

An escrow account will be set up to transfer funds between you and the seller. Your lender will also set up an escrow account for the distribution of fees like taxes and insurance. Condo association dues likely won’t be paid through an escrow account.

When the time comes to close on your condo, you’ll attend a meeting along with your agent, attorney, title agent, and any seller-side representatives. Be prepared for a long meeting. If you have any questions, let your agent and attorney know. They’re there to help you.

You’ll review your final Closing Disclosure and verify that everything looks accurate. You’ll sign a lot of paperwork and pay closing costs. When the loan funds, you’ll receive your keys to your new Chicago condo.

Ready to find your dream home? Contact our preferred lender today.