What To Know Before You Buy A Condo
Mar 28, 2023
Condos are a popular form of housing that reap a ton of benefits like location, amenities and lack of yard maintenance. But what’s the catch? Are they a good investment? In order to help you make this decision, we have laid out what you should pay attention to when considering buying a condo.
First off, let’s discuss the basics of a condo also known as a condominium. In a condo, your residence is owned privately while the shared spaces and amenities are owned collectively by all of the residents who reside in the condominium.
Your property includes your individual unit while the shared property includes all of the amenities such as a pool, parking garage, fitness center, etc.
It is important to know that most condominiums have some type of required association that residents must join. This association usually is in charge of the upkeep of the complex and neighbor relations. Some things they would handle include exterior maintenance, elevators, building insurance, roof, lawn care, and amenities.
Before joining, you may want to inquire about the rules and regulations imposed by this group. For example, some condos don’t allow pets, others have strict guest policies, and some don’t allow renting. You’ll want to be aware of these before falling in love with a place that doesn’t allow your furry friend or support your future investment ideas.
In addition to rules and regulations, all condo association require dues with membership. These are important to factor into your budget so you have an accurate estimation of cost for the condo.
Most of the fees required by your association will go towards improvements and upkeep for the complex. However, some condominiums will list out certain charges in their regulations that can be assessed at any time, so you will want to be aware of these before them come unexpectedly.
These special assessments could include repairs needed from weather damage, roof maintenance, or costs that exceeded the association’s budgeted amount. This should be disclosed by the seller if the assessment is pending. In this scenario, it’s always a good idea to ask the seller or a knowledgeable real estate professional about these before you get slammed with unexpected charges.
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Condos typically have their own building insurance, but this may not include personal liability or cover anything inside the walls of your condo. If your toilet backs up or your hot water heater leaks, then you will most likely be responsible for the damage.
In addition if there were ever a fire or theft, the building insurance would not cover your losses. Therefore, it’s a smart idea to get your own insurance to cover your personal belongings and any potential damage that could be costly. Plus, insurance for condos is typically cheaper than for a single family home.
How to start the buying process
Now that you know what to consider before you buy, here are some next steps you can take to start the buying process:
In order to have an accurate estimate of what you can afford, you will want to contact a lender to get preapproved for a mortgage. Before you meet with them, you will want to gather all of your financial documents including your tax returns, W-2’s, pay stubs and bank statements.
You can start searching for condos here with the newest condos updated every 5 minutes.To ensure you only see condos, be sure to select “Condos” as your property type within the filters.
Determine Association Fees
Once you find a condo you’d like to tour, make sure to verify that the association fees are within your budget. Some real estate sites have an approximation of these cost in the listing details. However, if you would like to know the exact amount, it is best to contact your agent. If you don’t have an agent, you can message the SimpleShowing team here to find out the cost.
Review the Condo Rules and Regulations
As mentioned above, these outline how the complex runs and under what rules. You’ll want to make sure you agree with these before you get excited about a place that won’t work for you.
Other Tips Before You Make Your Purchase
When preparing to buy a condo, there are several essential factors to consider before taking the plunge into condo life. Navigating the condo community can seem daunting at first, but with the right guidance, it can become a rewarding investment property.
To help you get started, here’s a list of tips and advice every prospective condo owner should know:
Condo Association Fees
Condo associations typically charge monthly fees to cover the cost of maintaining common areas and providing certain amenities. These fees, known as HOA fees, can vary significantly between condominium complexes. Ensure you factor these expenses into your budget when comparing condo living with single-family homes.
Purchasing a condo may require a different mortgage than a conventional loan, such as an FHA loan. Consult with a real estate agent or a mortgage broker to understand the best financing options for your specific situation.
Property Management Company
Investigate the condo building’s property management company to ensure they have a good reputation and provide reliable services. The quality of the management company can make or break your condo life experience.
One of the benefits of living in a condo development is that you’re not responsible for exterior maintenance. However, this also means you have less control over the appearance and upkeep of your home. Be sure you’re comfortable with the condominium complex’s rules and regulations regarding exterior maintenance.
When finalizing your condo purchase, don’t forget to account for closing costs. These may include property taxes, transfer fees, and other expenses that can add up quickly.
Buying a condo is an attractive option for many prospective homeowners, offering a unique blend of independence and community. However, condo living is not for everyone. It’s essential to weigh the pros and cons of condo life before committing to a condo purchase.
When considering your options, consult with a trusted real estate agent and research condo associations, individually owned units, and monthly rent comparisons in your desired area. By understanding the ins and outs of condo ownership, from condo association fees to property management companies, you can make an informed decision that suits your lifestyle and financial goals.
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