A buyer looking for a condo in Miami became anxious after seeing a crowd at an open house and made an offer without checking the financial status of the homeowners' association. It was only after signing the contract that they learned about a significant special assessment planned for the building.

Recent market trends indicate that the atmosphere in Miami is different from before. The median sale price over the last three months is $652,000, which is down 0.44% from a year ago. While there are an average of two offers per listing, the time to contract has increased to 113 days. This suggests that buyers no longer need to rush their decisions as they did a few years ago.

When comparing condos to single-family homes, the differences are clear. For single-family homes, you only need to consider property taxes and insurance, but condos come with additional risks of special assessments due to strengthened reserve fund regulations following the Surfside collapse. Monthly maintenance fees for high-rise condos in Miami-Dade are reported to exceed an average of $1,900, meaning that when combined with insurance and property taxes, the total can equal or exceed the mortgage payment.

Florida's effective property tax rate is around 0.79%, but for condos, maintenance fees and insurance often have a greater impact on the budget than taxes. It is essential not to skip the step of reviewing the homeowners' association's financial statements and recent reserve fund status before signing a contract.

Many buyers still calculate only the principal and interest payments and add maintenance fees and insurance later. For condos, these three items should be considered together from the start to accurately gauge what price range is truly affordable. It is safer to leave some emergency funds rather than putting all savings into the down payment, as unexpected expenses like special assessments can arise.

Some buyers still underestimate closing costs. For a condo priced around $650,000, closing costs can range from 2% to 5% of the sale price, potentially reaching up to $33,000. If you only prepare for the down payment and neglect this aspect, you may find yourself in a difficult situation at the end of the contract process.

It is also worth noting the risks of viewing properties without mortgage pre-approval or signing a contract with the first lender encountered without comparing rates. It is advantageous to compare at least three lenders. In competitive condo markets, some buyers skip reviewing the homeowners' association documents, but later-discovered special assessments can become a much larger burden than the time saved.

Miami attracts investors looking for rental income and capital appreciation, but it cannot be assumed that prices will continue to rise. Rising insurance costs and maintenance fees should also be viewed as risks. If you are weighing between single-family homes and condos, it is helpful to consider not just the initial sale price but also the cumulative maintenance fees over 5 or 10 years to better understand the actual burden. For Korean families, checking school ratings on GreatSchools is advisable, but since school district boundaries can change, it is wise to verify based on the property address.

During the preparation for a condo contract, some may neglect managing their credit score and debt-to-income ratio. In areas with high maintenance fees and insurance burdens, lenders tend to scrutinize debt ratios more closely, so it is safer to postpone large expenditures until after closing.

In competitive offer situations, it is easy to become anxious, but it is wise to consider how long you plan to stay in the condo and whether the building will be advantageous for resale if special assessments arise again. Making decisions based on the financial health of the homeowners' association rather than emotional impulses is safer in the long run.

If you are moving from another state, it is safer not to carry over your previous perceptions of maintenance fees or insurance. This article is not investment or legal advice, and it is recommended to consult with lenders, real estate professionals, and, if necessary, experts who can review the financial status of the homeowners' association before finalizing any contracts.