Tips For Trouble-Free Condo Buying
Buying a condominium offers some advantages – living closer inside of town, affordability, less maintenance. But buying a condo is not the same as the purchase of a single-family home. Understanding the differences, and the particular things you should look out for when making your purchase is important if you want to be happy after the closing.
For this reason, I have put together some of the best tips for buying a condo. If you are thinking about a condominium purchase, it is super important to understand the distinction between condo living and single family home ownership. They can be vastly different!
Get Clear On How It’s Different
Owning a condo is like a cross between owning and apartment and owning a home. Your condo large savings to others, and all of the owners need to work together to maintain the buildings and the community. The benefit of this arrangement are great – you typically have fewer maintenance needs than you would with a separate home, and condos are often cheaper than a comparable size home. However, you also have to depend on the other owners and the condo association to address issues, something they are not always good at doing.
Keep in mind the condo association is the life blood of your neighborhood. Without a healthy condo association, you will more than likely have a miserable experience.
Spend some time talking to your Realtor about what you should expect owning a condo, and the things you should look out for when buying. Are help you avoid any nasty surprises. Here is a great list of questions to ask before buying a condominium. Your real estate agent should be able to help you get these questions answered for you before you even consider writing an offer.
Some of the biggest regrets from buyers purchasing a condo are not doing their homework in the community they are buying into. Here are things that are discussed in the above article that you should research:
- How much are the condo fees and what exactly do the cover?
- Is the neighborhood professionally managed or is it done by the owners themselves?
- Are there any special assessments coming up shortly and if so how much?
- Are there any pending lawsuits against the complex?
- What is the policy on renting condos in the neighborhood?
- How many units are currently owner occupied and how many are rented?
- What is the parking policy? Do I own my space? Is there guest parking?
Research The Condo Association
One of the best tips for buying a condo is understanding the financial strength of the neighborhood! The association is in charge of keeping things together in your community. It needs to make sure buildings are in good repair, that the grounds are maintained, and that members uphold their end of the bargain. Because of this, condo associations tend to have a lot of power. As an owner, you will be required to listen to the association’s concerns and obey its rules and mandates.
This does not mean all associations are power hungry or unpleasant to deal with, but you should research your particular association before purchasing. Who is in charge? How do they deal with issues? Do they address problems quickly (some associations are notorious for shirking duties)? Here is an excellent reference for the purpose of an HOA. Verifying how the current condominium owners feel about the association is a great way to check up on them.
Verify The Reserve
Each association has a reserve, a pool of money collected from members that is supposed to go towards repair costs. But each association handles reserves differently, and not all are well-managed. You want to buy a condo in an association that has adequate reserve funds to address any future problems. You should also clarify what your share of repair costs will be, should a problem arise.
One of the best tips for buying a condo is to find out the health of the association and if the current owners are paying their condo fees. One of the worst things you can find out later is that the financing of your neighborhood is completely mismanaged. This can, in fact, decrease the value of your property substantially.
Are The Condos FHA Approved
Finding out whether the condo complex you are interested in buying has FHA approval is super important. For those who don’t know, FHA is a government entity that stands for Federal Housing Administration. The FHA loan is a very popular mortgage product because it allows a borrower only to come up with a 3.5% down payment. For first time home buyers and those that don’t have substantial savings, this is huge! FHA loans make up a significant portion of loans made to home buyers.
When a condo development does not have FHA approval, it affects both buyers and sellers. Obviously, if a condo does not have FHA approval, a buyer can not secure a purchase with this type of loan product. Given this, there can be a fairly decent percentage of customers who may not be able to purchase.
This, of course, is not good news for a seller either because when the buyer pool is reduced so are the values. This is the simple economics of supply vs. demand. For a complete understanding see why buyers and sellers should want FHA mortgage approval. This article covers in detail the importance for both buyers and sellers the importance of FHA financing.
Have Your Own Emergency Fund
Condo ownership is often less expensive than home ownership because costs are shared among members. But remember, this is not like renting an apartment. You will still need money to cover your share of costs, and there will be many things that you have to pay for on your own. The association will not help you replace your refrigerator, for instance.
This means you need to have an emergency fund. How much is up to you, but the more money you have in it, the easier you will be able to weather surprises after you buy your condo.
Find Out About The Neighbors
Everyone has different needs when it comes to a comfortable and happy home. If you are a busy working professional, you may not want to live next door to a condo filled with college freshman. If you are a retiree, maybe you would prefer to live next to other older people. The fact is, you have preferences, and it’s okay to verify that you are buying a condo where your neighbors fit with your lifestyle. While you may not be thinking of it now, when it comes time to move you are not going to be interested in learning how to sell a home with bad neighbors. Does your potential neighbor have a teenager who will be playing loud music or drums late at night? Do your research and at the very least find out who will be abutting you on each side of the condo. It’s better to be safe than sorry.
Think About Neighborhood Too
While you may have fallen in love with a particular condo development, it is important to take into consideration the surrounding neighborhood in which it is located. Maybe what attracted you to this condo is the beautiful exterior design, a magnificent kitchen, or the way the design is so put together so well. There is no doubt that these things are all great reasons but don’t forget the importance of picking a solid neighborhood as well. So many home buyers get caught up in the nuances of the property that they sometimes forget about their surroundings. The kind of questions you should be thinking about include:
- How far from the highway is the community?
- What is the crime rate like in the area?
- Are there major conveniences nearby like a great restaurant? A Starbucks coffee shop? A shopping plaza?
- Is there anything that will annoy me like highway noise, nearby train tracks or high tension wires?
- How do the local schools stack up? If you have young children or are planning on having them, it is important to understand how schools can affect home values. Over the years I have seen numerous buyers not understand just how much a school system can not only affect home prices but the ability to realize long-term appreciation. These are all issues that some buyers do not take into account because they get so preoccupied with the home they are looking at.
Talk About Maintenance
The general arrangement with condo associations is that they will take care of maintenance for the common areas. But one association’s idea of routine maintenance may not be the same as another. Some condos may be pristine, while others are a lot rougher. Discuss how maintenance is handled with the association, because you don’t want to spend the next few years (or more) frustrated by the lack of maintenance.
On the same line of thinking, you should find out what is your responsibility and what fall on the condo association. For example, some condo associations take full responsibility for things like a deck or patio maintenance. Other times this is not the case at all. Another gray area can include roofs and windows. These are obviously costly repair items that you will want to know who is responsible for, especially if they are nearing their life expectancy.
Go Big For Resale Value
You may want only enough space to be comfortable in. But when it comes to reselling the condo, in most cases you will find that two and thee-bedrooms are easier to sell. Studios and one-bedrooms might be all you are initially interested in, but if you want to sell later, you might want to go for something a little bigger. Consult with your Realtor and ask them about past sales of one bedroom and studio units in the area. Make sure that these types of condos are not impossible to sell.
From an investment standpoint also look at the appreciation potential between the two. If you can comfortably afford it, going with a multiple bedroom condo may be a wiser choice from a resale and investment standpoint.
Ask About Storage
Storage is a common problem in condos. They are not usually designed for people with lots of things to store. Determine what your storage options are if you think this will be an issue. Some condos will offer storage areas or garages as an option.
Try For A View
If at all possible, you want to get a condo that has a decent view. This is important for two reasons. First, it is more enjoyable to live in a place where you can enjoy looking out the window. Second, it is much easier to sell a condo that has a view. A few years ago I remembered meeting with a woman who wanted to sell her condo in Ashland Massachusetts. She was not in her unit long, so I asked her why she wanted to leave it was primarily because of the location of her unit. She has not thought it through well enough some of the things that might be a concern.
Other condo location tips include:
- Avoid a unit with an unpleasant view such as overlooking where the garbage is picked up if it’s not curbside.
- Look for a unit that has a southern exposure for natural light during the day.
- Avoid a condo that gets oncoming headlights from cars.
- If there is an elevator, you may not want a unit either next to or directly across due to noise.
Make Sure You Hire A Realtor Skilled in Condo’s
The internet is a great way to search around for ideas on buying a condo, and on possible listings and general prices. But there are so many things that need to be clarified – details on condo associations, hidden costs, reserve funds – that having a professional to help you is important. Unless you want to devote yourself full-time to condo hunting, you will not be able to gather all the information you need to make an informed decision by working alone. Realtors will also have better access to new listings, and will be able to help you spot deals that you would never recognize by yourself.
Keep in mind when buying a condo you want to be working with an exceptional Realtor, not a taxi cab driver. The skills of the agent you are working with are vital when buying a condo for all of the above reasons. Having someone, that understands the complexities of a condominium purchase is important. One wrong missed detail about a particular neighborhood could cause you years of unhappiness. Avoid this mistake at all costs. It goes without saying that just like every other industry the skill level from one real estate agent to the next can be very different.
Additional Helpful Articles When Purchasing a Condo
- Should I buy a house or a condo via Realtor.com.
- Ten must read tips for buying a condominium via Rochester Real Estate Blog.
- What are the pro’s and con’s of an HOA via We Sell Louisville.
- What are the best Tips for dealing with an unruly homeowners association via Maximum Real Estate Exposure.
Use these additional resources to glean additional tips when buying a condo. The better armed you are with information the better!
About the author: The above Real Estate information on tips for buying a condo was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at [email protected] or by phone at 508-625-0191. Bill has helped people move in and out of many Metrowest towns for the last 29+ Years.
Thinking of selling your home? I have a passion for Real Estate and love to share my marketing expertise!
I service Real Estate sales in the following Metrowest MA towns: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton and Uxbridge MA.