5 tips for the first-time homebuyer
Condo may be cash-only
Cheaper prices and low rates only partially explain why condominiums no longer make the cut on as many first-timers' shopping lists. Another reason is that lenders view condos more cautiously because foreclosures have caused considerable financial pain for condo homeowners associations. Unpaid dues force associations to skimp on common-area maintenance and put off necessary repairs, devaluing the property.
An association's financial status typically isn't disclosed in the real estate brokers' multiple listing service, putting the onus on buyers and buyer's agents to ferret out which buildings will qualify for conventional or FHA financing.
"If enough people in an association walk away, the association doesn't have enough money to maintain itself," Dacey says. "You can't get a mortgage for a condo building if their financials aren't sound."
That means first-timers who don't have a lot of cash may not have a shot at buying those homes.