Nolo's Essential Guide to Buying Your First Home (9 page)

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It costs HOW much?
New houses are generally worth more, but they tend to cost more, too. Developers often offer unique financing alternatives (discussed in Chapter 7), which may make a new house purchase more affordable.

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Who’s this guy?!
You might have to deal with the developer’s salesperson or representative, without the benefit of your own real estate agent to protect you.

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Not time-tested.
While it’s exciting to get a brand-new home, you’ll be the first to discover whether all the lights work, the dishwasher runs, the water heater heats, and more.

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It will be done
when
?!
Developers don’t always finish houses when they expect to, and often don’t compensate purchasers for the delay. Instead, the fine print may release them of liability.

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More rules?
As we’ll discuss when we get to condos, some PUDs require all owners to live by a set of written rules. Short of selling, there’s often little you can do to get out of these rules if you don’t like them.

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Affordability.
A condo often costs less to buy than a house (although in major metropolitan or resort areas, the opposite is sometimes true). Maintaining a condo can also be less expensive, since costs that otherwise might be duplicated—like landscaping, roofing, and some insurance—are shared.

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Convenience.
If you aren’t into maintenance, you’ll appreciate that the condo association—particularly in a larger complex—is likely to hire a management company to take care of the common areas. You may also get valuable on-site amenities like a gym or pool.

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Community.
Because you’re all part of the same community association, you’ll get the opportunity to know your neighbors, whether you wish to or not.

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Rules, rules, rules.
You’ll be subject to a document called the master deed or Declaration of Covenants, Conditions, and Restrictions (CC&Rs). This sets forth not only rules for the community association management to follow, but rules governing all owners. You’ll be told what you can do in the common space, and even what you can do with or in your own unit.

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Buy for less, sell for less.
Condos generally appreciate at a slower rate than houses.

Diet-Time for Fido?

 

What kinds of things do CC&Rs limit? Common examples are:

• whether you can have a pet, and if so, its maximum height or weight

• whether you’ll get a parking space, or whether your guests can park in the lot

• whether you can change the color of your curtains or paint the outside of your unit

• the location or appearance of things like your mailbox, clothesline, TV antennas, and wreaths

• how long visitors can stay with you

• whether you can rent your unit to someone else, and

• whether you can smoke in your unit.

 

 

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Privacy.
Since you’ll be sharing common areas and usually walls or ceilings, too, you’ll be giving up some privacy. Also, if having a large outdoor space to garden, entertain, or keep a pet is important, you might be frustrated by the outdoor spaces, which are usually either miniscule or communal.

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You share all costs, whether you want to or not.
It may be frustrating to see your monthly membership dues spent on things you never use, like the swimming pool. And if you’re the kind of person who can live without a repair until you have spare cash, tough luck—you’ll be forced to pay your share on the association’s schedule, sometimes in excess of your regular fees.

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It can cost more than you expect.
In addition to your monthly membership dues, you may have to pay additional fees called “special assessments.” These are one-time fees collected for major purchases the association can’t afford to make with its current reserves (for example, to replace the roof). Do your research: In recent years, with many new buildings not fully occupied, the few owners in some CIDs have found their special assessments very high.