Buying a condo offers some advantages over other types of homes. With often better access to amenities and a simplified lifestyle, condo living is increasingly a popular choice.
But purchasing a condo differs from buying other types of homes and requires the buyer to ask additional questions. Before you make an offer, there are some questions to ask before buying a condo. Many of these same questions should also be asked when buying a townhouse.
Let’s dig into things to know about condo living.
What are the condo fees?
When buying a condominium, the purchase price isn’t the only cost you need to consider. There will also be monthly fees to pay, which can be a surprise if you aren’t used to condo living.
While there are ongoing costs with any type of home, these costs are more clear-cut when buying a condo. Make sure you know the costs and how they compare to similar developments. Your Realtor should be able to help you with this information.
What are the condo fees for?
What these fees cover will vary depending on the community. Monthly condo fees commonly cover the following items:
- Maintenance of common areas
- Insurance for common areas
- Costs for amenities, like a pool or gym
- Security costs
- Reserve fund
- Basic cable
- Water and sewerage
- Garbage collection
Will I still need insurance?
While some of your fees will pay insurance for the common areas and the building, you might still require protection for your possessions. This will be similar to renters insurance which only covers contents and liability. It will protect you against damage to the things inside your home or if someone gets injured while on your property.
What rules need to be followed?
While there are rules and regulations you will need to follow when you buy a unit; these won’t be too strict. Despite this, you should ensure you understand what is expected of residents and what is allowed, and what isn’t.
There could be rules about parking or restrictions on renting out the unit. Knowing these things in advance will show you if this is really a complex you want to buy a condo in. Sometimes the benefits of an HOA are excellent and other times, not so much.
Are pets allowed?
If you have a pet, this is going to be an essential question to ask. Some condo developments have restrictions on pets that could mean the home is entirely unsuitable for you.
They could restrict the number or type of pets or the size of dogs allowed. Sometimes these types of restrictions affect tenants more than owners in a condo development, but they are essential to know before you make an offer on a home.
Are there any legal issues pending?
Before buying a condominium, you want to be informed about any litigation. Often this might be between the builder of the development and the association, but you should find out what the situation is ahead of time so you can decide if it is better to look elsewhere.
Are there special assessments happening soon?
If significant repair or replacement work is required for the building, a special assessment is used to cover the cost. Reserve funds can be used to pay the cost of these issues, but if there isn’t enough cash to cover the expense, a special assessment will be required. This will mean that the bill will be divided between the owners of the condos, so knowing this before you buy is essential.
A special assessment is a hidden cost when buying a condo that many people are unaware exists.
Ask about previous special assessments and if any known issues need to be addressed. If there haven’t been any special assessments for a long time, and the building is older, you can expect a greater chance of an assessment reasonably soon.
How much is in reserve?
Knowing how much is in the reserve fund will indicate how likely a special assessment will be. A well-run association should reserve 10% of its annual budget for newer developments and 25% or more if it is older than 10 years.
Is there any additional storage?
One of the more significant drawbacks of moving from a larger home to a condo is a lack of storage. Some communities have additional dedicated storage space. Make sure you have enough storage space, or you could find yourself getting rid of more of your things than expected or renting a storage unit.
How easily do condos in the development sell?
Are homes in the complex in demand, or do they remain listed for longer than average? You should consider how easy it will be to sell your condo and the resale value before you buy.
Final thoughts on buying a condominium
Purchasing a condo is much different than buying a house. Make sure you have done thorough research not only on the condo but the HOA running the property. Costly mistakes are made when assuming everything is terrific. Your Realtor should be able to assist with all the proper due diligence to make a sound purchase decision. Appearances can be deceiving.
Bill Gassett is a nationally recognized real estate leader who has been helping people buy and sell MetroWest Massachusetts real estate for the past 35 years.