The time you have been working so hard for has finally arrived. You are ready to buy your first condo in Chicago. While there are similarities in buying a house and a condo, there are different things you should consider and different concerns you should have. For example, when you purchase a house, you typically do not have a shared common area for which you and other residents have to pay maintenance fees.
Since Illinois real estate laws can be tricky, it is important to do your research before you jump into making a purchase. Fortunately, your attorney can help you through the process so that you make the right choice regarding a condo. Read further for some tips on buying your first condo.
Applying for a loan
The loan process for obtaining a mortgage on a condo is different than it is for a house. The Federal Housing Administration (FHA) has a completely different set of regulations for condos that must be met before it will approve a loan. For example, for the FHA to even consider a loan for a condo, at least 80 percent of the building's condos have to have their owner's living in them. This means that if you are looking at a building where most of the units are owned by investors either renting the property out or trying to resell the units, you probably will not get an FHA loan.
In addition, the building has to be on the FHA's list of approved buildings. If the condo you have your heart set on does not meet these criteria, you may still be able to get a private loan, but you should expect to put down a much higher down payment.
There are rules
Because a condo typically has many people living very closely to one another, there will be rules that every owner or tenant must follow. For example, the building may not allow pets or subleasing. There may also be quiet hours that all residents must observe. Take the time to look over the community's rules and be sure you can abide by them.
Prepare to pay monthly and annual fees
When you purchase a condo, be prepared to continuously pay monthly and annual fees. Much like a home owners' association, the condo association will expect every owner to pay their fair share of insurance and maintenance fees that apply to the common areas of the building. Before you buy a condo, talk the board of the condo association and make sure that the money that residents are paying is actually going toward the upkeep of the building and that the board set aside enough to pay for any major repairs.
Read the minutes
When the board members of a condo association meet, they must take minutes. Take the time to read the minutes. This will give you an idea of what you can look forward to from your neighbors and how the board handles residents' concerns.
Before you make the purchase, find out who takes care of the building. Some communities hire outside help to take care of cleaning the common areas both inside and out. Other buildings expect the residents to take care of the upkeep themselves. Be sure you select a condo where the residents and condo association take maintenance seriously so that you can be confident your unit will not suffer a decline in resale value.
If you are considering purchasing a condo in Chicago, it is important to consider the above factors. Use every resource available to ensure you are purchasing the condo that is best for your lifestyle.