Tips For Trouble-Free Condo Buying
Are you thinking about buying a condo? What is the best advice when buying a condominium? Start with understanding right away that it is much different than purchasing a single-family home!
Buying a condo offers some advantages – living closer inside of a town, affordability, less maintenance. But buying a condo is not the same as the purchase of a single-family home.
With single-family homes where there is no HOA, you are the king of the castle. With a condo, you must follow the rules established by the condo board.
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 a single-family house. Without doing so you could be deeply disappointed in your buying decision.
Let’s take a deep dive into what you need to know about buying a condo.
What is a Condo?
A “condo” is short for a condominium. Condos are individually owned units within a community of other units.
Condominium owners jointly share common areas within a community such as hallways, garages, elevators, parking areas, tennis courts, and pools.
Condos can be found as detached units or in high-rise apartment-style buildings. Sometimes you cannot tell the difference between an apartment building vs. individually owned condos.
Individual units in a condo building can be sold, whereas an apartment cannot.
Get Clear On How Buying Condos Is Different
Owning a condo is like a cross between owning an apartment and owning a home. With condo-buying, 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.
Townhouses are similar to condominiums as well.
However, you also have to depend on the other owners and the condo association to address issues they are not always good at doing.
Keep in mind the condo association is the lifeblood 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. Your real estate agent should help you avoid any nasty surprises.
Here is a great list of questions to ask before buying a condominium. Your Realtor should be able to help you get these questions answered 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 they 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? Having a rental income is vital to some folks.
- How many units are currently owner-occupied, and how many are rented?
- What is the parking policy? Do I own my space? Are there parking lots or designated guest parking?
You Will Pay HOA Fees When Buying a Condo
As a unit owner in condo developments, you will be required to pay HOA fees. Usually, they are a monthly fee, but at times they can be paid quarterly in some condominium developments.
Monthly dues can vary bases considerably on what amenities are offered. For example, some condo communities have amenities such as tennis courts, a swimming pool, or fitness centers. Amenities such as these can drive up monthly payments considerably.
Before making a condo purchase, it makes sense to decide which kind of perks you don’t mind paying for. There is no sense in paying for monthly maintenance fees on things you will never use.
Some potential buyers purchasing a condo would rather pay for things like landscaping, mowing the lawn, and maintaining common areas. Buying a condo might be all about avoiding yard work. This is especially true of older buyers moving into a retirement community.
If you are located in a cold-weather climate, snow removal might be another important thing to consider.
Are The Condo Fees Reasonable?
It is a good idea to check the condo association fees before scheduling a showing. Some condo developments have outrageous condo fees due to mismanagement of funds or major repairs that have been recently completed.
There also could be a special assessment whereby potential buyers will be required to pay an additional condo fee for some designated expense.
For example, maybe there are older condo buildings where the roofs need replacement. Homeowners association fees could be temporarily increased to pay for the installation of the new roofs.When buying condos one of the most crucial tasks for unit owners will be doing due diligence on the HOA condo fees.Click To Tweet
Research The Condo Association Before Purchasing a Condominium
One of the best tips for buying a condo is understanding the financial strength of the neighborhood! The condominium association is in charge of keeping things together in your community.
When buying condos, you need 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 rules and regulations.
This does not mean all condo 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 a condominium association. Verifying how the current condominium owners feel about the association is a great way to check up on them.
The condo also could have a property management company handling day-to-day operations. Checking on the property managers will also be a crucial consideration.
Having a terrible condo association or property management company could harm your property value.
Verify The Condo Reserve Fund
One of the most critical tasks when buying a condo is understanding the condo community’s financial health.
Each association has a reserve fund, a pool of money collected from members that are 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 with adequate reserve funds to address any future problems. It would be best to clarify what your share of repair costs would be, should a problem arise.
One of the best pieces of advice when buying a condo is to find out the association’s health and if the current owners are paying their condo fees.
One of the worst things you can find out later is that your neighborhood’s financing is completely mismanaged. This can, in fact, decrease the value of your property substantially.
Are The Condos FHA Approved
When buying a condo, you need to determine whether the condo complex you are interested in buying has FHA approval. Doing so is super important.
FHA is a government entity that stands for the Federal Housing Administration for those who don’t know.
The FHA loan is a top-rated mortgage product because it allows a borrower 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 the importance for both buyers and sellers of why having FHA financing approvals is vital. You can check with your mortgage broker or lender to see if a condominium complex has FHA approval.
Mortgage lenders have a database of condo developments that have approved FHA buildings.
Have Your Own Emergency Fund
Condo ownership is often less expensive than homeownership 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 weather surprises after buying your condo?
How Will You Finance Your Condo Purchase?
If you will use FHA financing, but the condo development does not have FHA approval, you will need to look at another loan program. There are numerous mortgage programs to choose from. A conventional loan is the most common form of financing when making a condo purchase.
Of course, just like purchasing a home, you will need to have a good credit score to buy a condo. A condo loan is no different in that respect.
Fannie Mae and Freddie Mac will also have to grant approval with condo purchases. There will be a condo questionnaire that condo associations will have to answer before financing can be granted.
Your lender should help explain what loan programs will work best for your purchase.
Find Out About The Neighbors When Buying a Condo
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 a first-year college student. 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 will not 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 With Condominium Purchases
While you may have fallen in love with a particular condo development, it is important to consider the surrounding neighborhood in which it is located.
Maybe what attracted you to this condo is the beautiful exterior design, a magnificent kitchen, or how 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.
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 when buying condos include the following:
- How far from the highway is the community?
- What is the crime rate like in the area?
- Is there public transportation nearby?
- Are there major conveniences nearby, like a great restaurant? A Starbucks coffee shop? A shopping plaza? Maybe good grocery stores are important to you?
- Is there anything that will annoy me, like highway noise, nearby train tracks, or high tension wires?
- Is the condo unit close to other things you might be interested in?
- 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 consider because they get so preoccupied with the home they are looking at.
Check on Maintenance When Buying Condos
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.
You should find out your responsibility and what falls on the condo association on the same line of thinking. For example, some condo associations take full responsibility for things like 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 When You Buy a Condo
You may want only enough space to be comfortable in. But when it comes to reselling the condo, you will find that two and three-bedrooms are easier to sell in most cases.
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.
Please 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. Going with multiple bedroom condos may be a wiser choice from a resale and investment standpoint if you can comfortably afford it.
The local real estate market will often dictate these kinds of decisions, so consult with a local real estate agent.
With Condo Buying, You Should Ask About Storage
Storage is a common problem in a condo unit. 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. Her reason was primarily because of the location of her unit. She had not thought her purchase 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 to have 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 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 condos, 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.
Finding Condos For Sale
The best way of finding a condo to buy is to hire an excellent local buyer’s agent who will not only help you find an excellent condominium but be your advocate as well.
When you are starting your condominium search, you can also search for condos for sale near me or buying a condo near me.
Get a Home Inspection Before Completing a Condo Purchase
While issues found on the outside will be the condo association’s responsibility, any problems inside will fall on the individual unit owner to deal with.
It is not uncommon that you would find similar issues at a home inspection as you would with single-family homes.
A condo can be an affordable alternative to a single-family home. Due diligence, however, is extremely essential when buying condos. Take your time and do all the necessary research to ensure you’ll be happy with your decision.
Hopefully, you have enjoyed the advice on buying a condo. Best of luck!
Additional Helpful Articles When Buying a Condominium
- Should I buy a house or a condo – helpful advice on whether buying a condo or a home is the right move.
- What are the pros and cons of an HOA – see what you need to know about the advantages and disadvantages of a homeowner association.
- What are the best tips for dealing with an unruly homeowners association – have you got a bad experience with a condo association? Get some guidance on what you can do.
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@example.com or by phone at 508-625-0191. Bill has helped people move in and out of many Metrowest towns for the last 34+ Years.
Are you thinking of selling your home or condo? 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, Natick, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton, and Uxbridge MA.