By Alena KairysNov 13, 2021
Note: This blog was originally published in July 2014 and has been updated.
Many people associate homeownership with the traditional single-family home, but that’s not the only option if you want to own! Living in a condo can be an excellent way to reap the benefits of owning a home without the upkeep required of a freestanding house. Here are four things to keep in mind when buying a condo.
1. Work with the Experts
Having an experienced lending and real estate team on your side will make buying a condo (or any type of home) much easier. Go through the preapproval process with your lender so you can see how much home you can afford before touring condos. A lender will guide you through the mortgage process, which can be a bit more involved than buying a single-family house. Many lenders will want to know what percentage of the units are owned vs. rented. When there are more owners than renters, it shows the complex is being run well and that the property isn’t depreciating. You’ll also need a reliable real estate agent who has closed condominium sales. They can help you find a condo that fits your budget, location, and amenities needs, and serve as a liaison between you and the selling party.
2. Location is Key
In real estate, location is an essential, and condos are no exception. When you’re shopping for your new home, make sure you tour the condo building and the unit you’re interested in. Be sure to ask what the sound insulation is like in the unit. Take note of the conditions of the grounds, common areas, interior and exteriors of the complex. The quality of the publicly visible spaces is often reflective of the building’s property management. Consider visiting your condo site during different times of the day and week to get a better sense of what the atmosphere is like. To hear additional opinions on the quality and safety of the community, ask people who already live there how they like it. Additionally, think about factors like parking options, community amenities, and access to main roads when scouting condo locations. Since you don’t own the land the building sits on, the location, amenities, and health of the condominium play a crucial role in its resale value.
3. Condo fees/HOA regulations
When you’re living in a communal space like a condo building, you’ll need to abide by the rules set by the condo board/HOA. The condo board is made up of other residents who manage the budget and set policy for the rest of the community. The community’s covenants, conditions, and restrictions (CC&Rs) dictates rules regarding parking, noise level, use of communal areas, trash disposal, unit modification, etc. Always review the CCRs to ensure you understand and agree with the policies. Additionally, you may need to pass an interview with the condo board before going to the closing table.
One of the main reasons people choose to live in a condo over a single-family home is because many maintenance tasks will be taken care of by someone else. However, this convenience comes at a price. When you own a condo, you’ll need to pay a monthly condo fee in addition to your mortgage payments. The fee covers upkeep costs that affect everyone in the complex, such as utilities and shared amenities. Your fee can increase over time, and if there’s a major issue that needs to be fixed right away, you may need to chip in extra for what’s known as a “special assessment.” In your search, you should ask how much the condo fee is, what services the fee goes towards, and how often special assessments come up. It’s also wise to request to see a copy of the association’s meeting minutes and current budget. A fair and competent condo HOA will be transparent about how their using their resident’s money.
4. Personal Preference
Condo living involves giving up some freedoms to have a more managed lifestyle. It may not be for you if you don’t want your noise level, pet choices, and home renovation projects to be regulated by an HOA. Being very close to your neighbors means having to deal with their daily sounds, which can be an issue if you value a quiet environment. Still, if you’re okay with a few limitations, the perks of owning a condo can improve your quality of life. Being in a condo community means you can access fun features that may not have been able to otherwise, such as a pool or gym. Living in a condo also puts you in the perfect position to make new friends and get involved in exciting social events with your neighbors.
Whether you’re buying your first place, want to downsize, or are simply over the long list of maintenance chores, a condo can be a great choice for a home. While there are unique considerations to keep in mind when looking for a condo, a thriving location and competent management will make a world of difference.
If you have any questions about buying a condo, contact one of our licensed Mortgage Loan Originators. If you are ready to begin the home buying process, click here to get started!
The pre-approval may be issued before or after a home is found. A pre-approval is an initial verification that the buyer has the income and assets to afford a home up to a certain amount. This means we have pulled credit, collected documents, verified assets, submitted the file to processing and underwriting, ordered verification of rent and employment, completed an analysis of credit, debt ratio and assets, and issued the pre-approval. The pre-approval is contingent upon no changes to financials and property approval/appraisal.
These blogs are for informational purposes only. Make sure you understand the features associated with the loan program you choose, and that it meets your unique financial needs. Subject to Debt-to-Income and Underwriting requirements. This is not a credit decision or a commitment to lend. Eligibility is subject to completion of an application and verification of home ownership, occupancy, title, income, employment, credit, home value, collateral, and underwriting requirements. Not all programs are available in all areas. Offers may vary and are subject to change at any time without notice. Should you have any questions about the information provided, please contact us.