Did you know that if the United States doesn’t add more than four million apartments this decade then there is going to be a major shortage? Apartments are in high demand and if you buy one right, you could be making one of the smartest investment decisions of your life.
Whether you’re looking for an investment property or a place to live permanently, it all starts with buying your first apartment. While this can seem overwhelming at the start, it can actually be fairly simple.
So keep on reading and we’ll take you through what you need to know to buy that cozy apartment of your dreams.
1. Check Your Credit Score
Whenever you’re buying real estate, you never want to assume. Especially when it comes to getting loans from banks.
If you have a bad credit score, you might not be able to get any reasonable loans. By knowing your credit score, you can have a better idea of what kinds of loans you can get from a bank. This in turn will help you set realistic expectations for what kinds of apartments you can afford.
2. Get Pre-Approved
Next on our home buying checklist is to get pre-approved. Don’t confuse getting pre-approved with getting pre-qualified.
A pre-qualification is simply a hypothetical yes. This isn’t a guarantee that the bank is going to lend money to you. The lender is taking a brief look at your financials and hypothetically telling you that you can get a loan.
While a pre-qualification can be helpful and bode well for you, it’s not enough to go apartment shopping with.
This is what makes pre-approval so useful. Here, the bank is taking a good, hard look at your financial statements and deciding if you are worthy of credit.
See what rates you can get from different financial institutions but avoid hard inquiries so you don’t hurt your credit score.
3. Find a Good Realtor
While you might think that you can find the right apartment just by using Google, you’ll likely quickly become overwhelmed. A realtor is going to have in-depth knowledge of the area and know what makes a good deal and a bad deal.
You want to get a realtor who has experience with apartments. They should have plenty of references and have a good reputation in the area.
You also want to make sure that the realtor is being realistic with you. They shouldn’t just say yes to everything that you want and they shouldn’t shoot down all of your ideas either.
A good realtor is going to find you good deals and make sure that the sale goes smoothly.
4. Go Hunting
Now comes the fun part. Look for apartments that are exciting to you and also in your price range. You can visit this website to find a variety of great websites.
Work with your realtor to schedule a walkthrough of the apartment.
You never want to put an offer on a property you haven’t seen yet.
When you do a walkthrough, you’re not just looking at the apartment. You also want to look at the building itself, the staff, the cleanliness, the other residents, and the neighborhood.
Try to go at different times of day too. Is there a lot of traffic? Is there too much natural light or not enough?
5. Make Your Offer and Be Ready for a Counter-Offer
When it comes to your first home, you might not want to try to drive the hardest bargain possible. When it comes to negotiating, you should really only try to haggle on the sale price or closing costs.
If you ask the current owner to lower the sale price and also cover the closing costs, you’ll likely get the door slammed on your face.
It’s important that you decide what is more important to you, liquid cash or a reduction in your monthly mortgage payments.
If it’s going to be hard for you to make the minimum down payment then you might want to ask for closing costs. However, you should ask for something like this from the start.
6. Have an Independent Building Inspection and Separate Unit Inspection
This is a very important step that you’re lender is going to require. This is going to determine fit the building is structurally sound.
Will it need maintenance in the near future? Is it built to code?
If there are problems, does the HOA have the money to cover these costs? If not, you are going to have to think about how much the HOA costs are going to rise as time goes on.
7. Final Walkthrough and Close
You always want to do one last walkthrough. No matter how eager you are to be a homeowner, you always want to do this. The buyer might pull one last trick on you that you need to look out for.
They might take a crucial appliance or leave a big stain.
When it finally comes time to close, you’ll need to bring a check for the closing costs and down payment. You’ll also sign all of the necessary documents. Your realtor will help you with this.
Congrats on Buying Makes Buying Your First Apartment
Buying your first apartment is a major milestone and it is something worth celebrating. Just make sure that you follow the guide above and don’t jump into any deals without putting in the time and research.
And don’t forget to check out the rest of our blog for more helpful articles!