Long Beach Condos Buyers Guide|Manifesto
Whether you are a first time buyer an experienced pro or
investor buying a Long Beach condo or loft can be a confusing and often stressful
process. It's an emotional experience
filled with many decisions, most with financial repercussions. Finding the right condo or loft is difficult enough; knowing what to offer, what and when to negotiate and how to make the deal work
best for you, the buyer, is another story altogether.
As a professional who has sold many Long Beach condos and
placed countless buyers in the Long Beach condos of their dreams, I feel it is
my responsibility to tell you that there is a lot you need to know before
jumping into your condo purchase.
Your Needs and Desires...
It is important that you have a clear image of what you are
looking for and that you transmit this clearly to your Realtor. Make a list and explain your needs and your
desires. Understanding the difference
between your needs and your desires will make your choices much easier to make. Your needs must be met, your desires may
be sacrificed if they are not practical within your price range. Are you looking for a larger place for your
growing family or are you looking for a larger place for entertaining? Where do you need that extra square
footage? What will you sacrifice for it,
if necessary? Are you downsizing? What are you willing to let go of? Don't let emotions cloud your judgment. Make certain that you get what you need
from the new purchase; if some of your desires are fulfilled, all the
better.
Be clear with your Realtor when explaining what you are
looking for. What is most important to
you?
-
Newly Remodeled
-
View
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Square Footage
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Number of Bedrooms
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Number of Baths
-
Condition
-
Flooring
-
Fireplace
-
Parking Spaces/Garages/Guest Parking
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Pet Rules
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Pool
-
Spa
-
Community amenities
- Concierge Services
- Doorman
- Gated Security
- High Rise
-
Elevator
-
Location in the complex/top floor/corner
unit/bottom floor
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Neighborhood
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Age of condo
-
Proximity to
-
beaches
-
restaurants
-
galleries
-
parks
-
golf courses
-
shopping
-
freeways
-
etc...
Often a condo purchase is more about buying into a
neighborhood lifestyle (location). If
lifestyle is at the top of your needs list make certain that is clearly
communicated to your Realtor. Do you entertain much? Make sure your complex has guest parking or
there is ample parking in your new neighborhood.
Are
You Ready to Start Shopping?
Unless you are
an all cash buyer (be prepared with proof of
funds), you will need to be pre-approved, preferably by a direct
lender. If you have great credit and belong to a
credit union you may be able to get a stellar interest rate from them,
check it
out. When you find a condo that you want
to make an offer on you will need to submit you're pre-approval with the
offer. It is foolish to begin to shop
without a pre-approval; you might find your dream condo the first day
out, like
another of my recent buyer clients. You need to be in a position to write and submit your offer when you find the Long Beach condos that you want to purchase. Bank statements will probably need to be submitted along with your offer as proof of sufficient funds to consummate the transaction, have them with you with the account number blacked out.
Consider Your Future...
Always consider the future resale value of your condo
purchase. I know, it's difficult when
you find the perfect condo in a not so perfect location; or it has the 2
bedrooms and 2 baths that you wanted but only has 1 parking space in a parking
impacted area. Unless you live alone that
missing 2nd parking space is certain to become a real problem while
you are living in your new dream condo and will probably become the reason you
will want to move on rather quickly.
Will you be able to sell that condo easily without a 2nd
parking space, or in an area that isn't in such high demand? Some areas appreciate quicker than others, if
you can afford to purchase in an area with higher appreciation it would be a
much smarter purchase.
Are you buying the smallest or least desirable condo in a
highly desirable complex? When it is
time to sell you may sit on the market for longer, sell for less, or not sell
at all if other larger more desirable units are for sale at the same time. Buying
the smallest, least desirable condo in a highly desirable complex and
neighborhood isn't always a bad decision.
If it provides you with the lifestyle that you are craving at a price
that you can afford, the condo will fulfill your needs. Just remain aware that it will take you
longer to sell it when the time comes.
In the meantime have a grand time enjoying the lifestyle you craved.
Remain Flexible and Alert...
Your Realtor should be familiar with the inventory available
in the neighborhood of your choice. They
will most likely show you the best of what is available, based on your stated
needs and desires, on your first and second trips out. If you do not find what you want you should
begin making adjustments in your search criteria quickly. Continuing to search, in a specific area,
after you have seen the best of what is available within your price range is
usually a downward spiral; either adjust your needs, desires or price range; or
wait for new inventory to enter the market.
Remember there are other buyers watching and waiting as well, you will
have to move quickly.
Loose Lips Sink Ships...
While you are shopping you may run into a seller at
home. As a buyer this may seem like a
stellar opportunity to ask questions and garner information about the condo,
the complex and the area. Often without
realizing it, your simple conversation with the seller could cost you money at
the negotiating table. Without realizing
it you may be letting the seller, or the listing agent, know how badly you want
the condo, or how much you love the condo or neighborhood. Knowing how badly you want it may net you a
different counter offer than you may have received had you not had that
conversation. Sellers face the same
problem, conversations with buyers or their agents often cost them money by way
of a lower offer and tougher negotiation than they would have received. This is why Realtors always try to keep the
buyer and seller apart until the deal is either closed or past any possible
negotiation time frames; loan approval, removal of contingencies, appraisal,
repair requests, etc... It's in your best
interest! You should be confident that
your Realtor is capable of negotiating your offer and will not reveal personal
information that could adversely affect your negotiations.
Future Planning?
Condo prices are so affordable right now many buyers are
purchasing more condo than they need with a mindset towards their future growth
and needs; marriage, children, home office, etc... Do you have future needs? Will they become an issue in the next 3 to 5
years? Perhaps you are a better
candidate for a single family residence to anticipate these needs? Keep in mind that there is no guarantee that
you will be able to sell at break even in 3 to 5 years. When you do sell you will need to recoup your
purchase price plus the cost of sale.
The cost of sale involves commission, your closing costs and any costs
given to your buyer during negotiations; plan on approximately 9% appreciation
to break even. That could take some time
in today's market.
After Purchase Expenses...
Not all condos are in turnkey condition. Condo fixer-uppers can become expensive and
the upgrades are all 'after purchase' money and can add up quickly.
-
Kitchen
-
Baths
-
Appliances
-
Flooring
-
Heating
-
Air Conditioning
-
Water Heater
-
Paint
-
Wallpaper Removal
-
Ceiling Scraping
Do you have the after purchase resources to accommodate these
upgrades? Are you willing to pay market
value, or near market value, then make an additional investment into the
property? How long will it take you to
recoup the additional investment? How
will that affect your future life plan?
Many inexperienced investors are purchasing, doing a quick
remodel, then attempting to sell (flip) to recover costs and make a profit. Often these inexperienced investors find they
spent too much on the remodel and become stuck renting the unit out. Truly experienced investors have warehouses
filled with cabinets, flooring, etc... which were purchased at wholesale, and
have crews on salary trained to go in and do a professional, fast and
inexpensive remodel, list the condo and still retain a decent profit
margin. Flipping condos is not for the
inexperienced investor.
Read Also: Buying Fixer Upper Homes in Long Beach - This article was written to Home buyers, but has many relevant points for condo and loft buyers as well.
Always Inspect...
Hire a professional inspector. While most problems in a condo are fairly
visible a professional inspection will set your mind at ease regarding those
that are not, like air conditioning, heating, water heaters, which are/are not
operable and may possibly, be nearing the end of their useful life.
Don't Procrastinate...
When you locate the condo that you want to buy you should
write your offer right away. If it is
new on the market and highly desirable you may find yourself in a multiple
offer situation. Make the best possible
offer that you are willing to, decide if you are willing to negotiate further
if you receive a multiple counter offer and go for it. Some people don't want to write offers if
they even think there is going to be a multiple offer situation.............you have to
be in it to win it! Go ahead and write
your offer, the worst that can happen is that you are overbid. Your Realtor will have called the listing
agent (I hope) and may have some information that will help you decide how to
present an offer.
Going home to sleep on it or wanting to bring parents or
friends to look at it before you make your decision to even write an offer will
often put you out of the game. Write the
offer, show it to them if your offer is accepted...good properties move fast. If they ixnay it you can always get out of
the deal during your 17 day contingency time frame, no harm, no foul!
If you find a condo that you like, but something just doesn't
feel right, it's probably not the right purchase for you. In this case, go home and think about it for
a while. Yes you might lose it, but that
may be for the best if you had reservations in the first place. There is plenty more inventory on the market,
something else will turn up.
Your Realtor is Your Advocate...
Thinking about shopping without a Realtor? Think you will just write an offer through
the listing agent? Think this will help
you get your lowball offer accepted? It
will, if you find a crooked listing agent!
Do you want to be represented by a crooked agent? Oh wait a minute....they don't represent you...they
represent the seller; they are just facilitating your deal. It's called dual agency or double
ending. It's actually legal in
California, but very few agents can or will handle it in a truly professional
manner. It's not the best position for
the buyer to be in and let's face it if the agent is crooked are you going to
get actual disclosure or are you going to find out you were duped by a neighbor
after you move in? Having your own
representation is more valuable than you realize.
Buying Bank Owned?
Banks are not subject to the same level of disclosure as
actual home owners in a standard sale are.
The government, recognizing their unfamiliarity with the property, has relieved
them of much disclosure. You will have
to do some extra investigating to discover the facts about your possible
purchase. A good agent familiar with
condo purchases can make a huge difference.
Found My Condo...Now What?
When you find a condo and are considering writing an offer
your agent should prepare a Comparative Market Analysis of like properties in
the area and present it to you along with the actual Comparable Sales. Together with your Realtor you will decide on
the price and terms of your offer.
Remember when you submit an offer the bank or seller will be looking at
their net proceeds. So if you offer a
solid price but ask for a lot of closing costs and other extras you could
easily lose the deal to a better NET offer, even one that is less in price than
yours. It's all about the NET!
If your Realtor is really sharp they will find out what the
sellers motivation is. A motivated
seller is more likely to negotiate than an unmotivated seller. In a down market it isn't really wise to sell
unless you have to, so most sellers are motivated on one level or another, some
more than most.
Reasons for selling that will create a very highly
motivated seller:
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Job Loss
-
Job Transfer/Relocation
-
Lifestyle Change
-
Marriage
-
Children
-
Home Business
Condos that have been sitting on the market for a long time,
perhaps expired a few times and/or have reduced their price, sometimes several
times, often have a worn down seller who is finally ready to negotiate. Vacant condos are expensive for owners to
maintain. There is only so long anybody
can/or is willing to carry the mortgage, HOA fees, taxes and insurance without
the rental income to offset the expense.
Home Owner Associations...HOA...
Many Condo Associations are in financial difficulty. Once your offer is accepted the escrow
company must order a fresh copy of the CC&R's, financials, budget and
minutes and deliver them directly to the buyer within the contingency period
indicated on the purchase contract; usually 17 days, unless that time frame has
been reduced. Buyers should go over
these documents in fine detail and determine the financial stability of the
association and whether is it prudent to move forward.
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How much are the monthly expenses?
-
How much is in the reserve account?
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Is the insurance current?
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Is there an increase in the HOA dues scheduled?
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Is there mention of any upcoming assessments?
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What do the minutes say?
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Are there upcoming repairs scheduled?
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Is there enough money to cover the repairs or
will there be an assessment?
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Are the pet rules satisfactory?
-
Have you read the Rules and Regulations?
Read the documents and ask questions until you are
satisfied. If the documents are
unsatisfactory the buyer should cancel the escrow immediately. Not all HOA's are in trouble, just beware of
the one's that are.
Read Also: Long Beach Condo Buyers Beware - Don't let this article frighten you, let it educate you.
More Long Beach Condo Buyer Tips: Long Beach Condos - Buyer Tips for a Smart Purchase
Are you overwhelmed yet?
Sounds like a real handful doesn't it?
It is! That is why you need top
notch representation. I can make this
easy and a lot less stressful for you.
Call me if you are thinking about buying or selling a Long Beach Condo
(562) 212-5420 Laurie Manny, Your Long Beach Realtor.
Long Beach
Condos For Sale
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Guest Post: Colleen Kulikowski
