With Boston condo buyer confidence on a steady rise since the start of 2018, it’s clear that our inventory isn’t keeping up with demand, resulting in more and more bidding wars.
According to ValueInsured’s Modern Homebuyer Survey, 79 percent of homeowners believe that now is a good time to sell, yet they don’t feel as comfortable actually selling their homes due to the expenses awaiting them when they sell. Brokers fees, capital gains taxes and mortgage closing costs are preventing willing homeowners from breaking into the market, and as a result we have a short supply on the market. Some overly-eager home-buyers are enlisting in trends that look promising on the outside, but actually have deep repercussions later on.
Here are five main Boston condo buyer traps that you should avoid:
1. No home inspection
Hiring home inspectors has always been a nuisance, but with the onset of bidding wars, some Boston condo buyers are ditching inspections altogether. Many buyers are conscious of the low supply of condos awaiting them on the market, especially in the $500,000 and under category. This is resulting in opting to rid any impediments they can, including home inspections. I strongly suggest first time home buyers avoid this tactic.
2. Offer sight unseen
Some Boston condo buyers are so desperate to move they aren’t even taking the time to tour their new Boston condo in-person before buying. Millennials in particular are huge culprits of this trend, feeling they can get the most out their desired homes from a computer or phone screen. Not to mention, interactive photo galleries and 3D house walkthroughs are giving young homebuyers the false confidence they need to press “Buy,” before even seeing the condominum they’re purchasing.
3. Co-buying with strangers
Fearing they can’t purchase their condominium alone, and unable to find financial support from family or friends, some condo buyers are looking to strangers in similar financial situations to help them afford their new home and share financial burdens and live together. Cities like Boston now feature match-making apps and websites where buyers are grouped together to help one another purchase properties. The downside — if one person falls behind on their share of the mortgage, the other owner will have to pay, which isn’t an ideal situation for young professional already scrapped for cash.
4. Cashing out from retirement savings
With no other access to cash, older Boston condo buyers are making the risky choice of extracting money from their retirement funds. Not only can this minimize one’s savings after retirement, but spending these funds prematurely will make it difficult to earn that money back in time. Plus there are major tax implications to be concerned about. Retirement accounts don’t only function as nest eggs, but they also compound interest over time. Spending that interest permanently on a down payment will prevent that money from being retrieved, seriously injuring one’s savings once retirement hits.
Contact me to find out more about Boston condos for sale or to set up an appointment call/text 617-595-3712.
SEARCH FOR CONDOS FOR SALE AND RENTALS
For more information please contact one of our on-call agents at 617-595-3712.
Updated: 1st Q 2018