Given the rise in popularity of the Intown “urban” lifestyle — especially among emerging affluent young adults — it should come as no surprise that luxury Atlanta condos have been experiencing a surge in recent years. From smaller boutique complexes featuring rooftop living to soaring high-rises with breathtaking views, a luxury condo for many people represents city living at its finest.
And yet, owning a condo is not quite the same as owning a single-family home. There are significant differences in what your dollar buys, how your home maintains its value and what extra living costs you should expect. While these are neither good nor bad compared to owning a house, it’s important to know, and embrace, these differences so you can make a purchase with open eyes and truly enjoy the living experience. With that in mind, here are six common-sense tips for buying Atlanta condos.
1. Understand what you are buying
When you sign a mortgage for a condominium, it’s important to understand that you are not buying property; you are buying airspace. You don’t own the walls, ceilings, floors or any land; you own the space between the floor, ceiling and walls. Thus, the way your condo adjusts in value will not necessarily follow the same trends as the overall housing market, which is land-based. In other words, condo values change on a different scale of supply and demand than the rest of the housing market does. Historically, this usually means condos are the first part of the market to be affected by a downturn and the last to recover. While this doesn’t necessarily affect you while you’re a resident, it can have an effect on your resale value, or on how much you can collect in rent, should you decide to lease it out in the future. That doesn’t mean a condo isn’t right for you; it’s simply a dynamic to keep in mind.
2. Make sure your financing is in order
Another reality of purchasing a condo versus land is that it often requires a different type of financing. Some financial institutions don’t have loan products that cover condos, for example. Likewise, if you’re a first-time buyer trying to qualify for an FHA loan, you’ll need to make sure the condo you’re trying to purchase is on the FHA’s approved condo list, meeting the criteria for approval of the loan. Many deals have fallen through because the buyer didn’t check out these details in advance. When you approach a lender, make sure they know you’re buying a condo so they know how to structure your loan.
3. Be aware of association fees and what they cover
In a condo, your mortgage payment is almost never the full amount you’ll be paying monthly. You’ll also have to pay monthly association fees, which can vary widely, depending on the property and the amenities offered. Some luxury condo properties pride themselves on all the extras they offer, including security, garage parking, swimming pools, fitness centers and many other perks. However, all of these features cost money, and they come out of your association fees – a complex with more amenities will likely have higher fees. Before you commit to buying a condo, make sure you know what the fees are, and what they cover. Make sure you’re not paying for amenities you don’t want or will never use.
4. Ask about assessments
Understanding the association agreement, particularily about how the property treats, assessments is vital. Quite often, a condo association structures its agreement to require temporary assessments — an additional amount of money from residents — to cover major maintenance or upgrades (for example, new roof, new paint, etc.). Sometimes, this assessment can be a large sum and can cause hardship if you’re not prepared for it. Make sure you’re aware of the rules about assessments and the probability of them before signing on the dotted line — and you might want to keep some money in savings, just in case.
5. Hire an Atlanta real estate agent with condo experience
Because condos are so intrinsically different from land-based real estate, it’s important to work with an agent who has specific experience with Atlanta condos — someone who understands the going market rates for condos, can advise you on whether you’re getting a good deal and can negotiate a better deal on your behalf. The agents at Atlanta Fine Homes Sotheby’s International Realty have a deep understanding of the luxury condo market in Atlanta, and we’d be pleased to help you find the perfect condo for your needs. Give us a call at 404.948.4812 for an appointment.