10 Things You Should Know About Buying a Condo
People choose buying condos over single family homes or renting an apartment for several reasons. Whether it's the convenience of a downtown location near shopping and cultural centers, the joys of home ownership without the headaches of yard work, or the affordability factor condos offer versus traditional homes, the factors are numerous.
Is buying a condo right for you? That's a decision only you can make, but the following may help you be better informed. Just make sure you're covered with an affordable condo insurance policy.
1. Condos Mean Shared Responsibility
One of the features of condo living that attracts people to this choice is the sharing of responsibility in terms of repairs and for insurance purposes. Most condominium communities have associations that are responsible for making repairs and upgrades to the building's exterior features, such as windows, siding and roofs.
2. Condos Often Mean Cheaper Insurance
Due to the fact that a condo association's master policy covers parts of the home's structure, condo owners can often find insurance at lower rates than homeowners of single family dwellings of similar value. Of course, this all depends on the type of master policy the association has purchased. It's always a good idea to review the association's policy to determine if you'll actually catch a break on insurance.
Always speak to an independent agent when purchasing any type of condo or homeowners insurance. Agents in our network are not beholden to any one insurance company, enabling them to find a number of quotes from a variety of providers, ensuring you will find the best coverage at the most affordable rates. Independent insurance agents in our network are available in your area, and are always available to answer your questions.
3. Condos Can Be More Affordable
In densely populated, urban areas, condos are often a more affordable alternative than single family homes. It's not unusual to find a three-bedroom condominium at thousands less than you would pay for a three-bedroom home. If this is your area and you want to buy a home, but can't afford a house with a picket fence and a back yard, condo living may provide a more budget-friendly option.
4. Condo Buying Still Requires Real Estate Agents
Whenever you shop for a purchase as large as a home or condo, consulting the experts is a must, especially for first-time buyers. Finding a real estate agent who has experience in matching condo sellers with condo buyers can mean the difference between a long and frustrating process and a relatively pain-free one.
"Condos have unique issues and the purchase agreements can be trickier as the condo associations usually have lawyers look over their documents," says long-time real estate agent Daryl Bronniche. "You want an agent on your side who knows how to navigate those agreements."
5. Condos are Subject to Association Rules
Along with the master insurance policy and a different process for purchase agreements, condo living also requires residents to play by the association's rules. These can sometimes be extensive. It's not uncommon for an association to require residents to do things from turning down the music after 10 p.m. to registering any frequent guests with the security personnel. Other condo associations may prohibit pets or conducting any sort of business in your unit.
"It's important to review all of the association's guidelines before you buy a condo to find out if you can live by their rules," Bronniche says.
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6. Condos May Include Other Fees
While your monthly condo payments may be lower than a traditional home mortgage, keep in mind that most condo communities also charge association fees. This is a monthly expense that may help pay for anything from gate security to lawn or shared property maintenance. Bronniche advises any potential condo buyer to be sure to factor in any additional expenses such as association fees into their monthly budget before signing a purchase agreement.
7. Condos Offer Convenience
Price and affordability aren't the only considerations for many condo buyers. Some demographics, such as seniors and single adults, prefer having someone else sweat behind the lawn mower or squeeze under the sink to correct a plumbing problem. For these residents, condo living can offer the joys of home ownership without the pain of home maintenance.
8. Condos Have Reserve Funds
Bronniche said it's imperative to ask about the condo association's reserve fund before signing any purchase agreement. This is the amount of money the association has set aside to make repairs to the shared property. If the reserve fund seems dangerously low, Bronniche said that can be a sign of poor management.
It can also be an indication that if a major fire or severe weather event causes extensive damage to any of the communal areas, the residents are sure to receive an assessment letter from the association, telling them they owe a certain amount of money to help cover the costs of repairs.
9. Condo Associations have Meetings
Depending on the local laws governing private meeting access, you may be able to request the minutes from the condo association's meetings for the past year. This will give you the scoop on the community: What are the common complaints? Who is that crazy neighbor everyone avoids?
How does the association handle disputes? How quickly are conflicts resolved? How responsive are the association leaders to residents' complaints? The answers to these questions can often be found in the meeting minutes and can help you avoid living a nightmare.
10. Condos Can Offer Tight-Knit Communities
Another source of valuable information on whether or not a particular condo is right for you is the neighbors. Many condo residents are happy to share their experience with any potential new resident. It never hurts to introduce yourself as a prospective buyer of unit #14 to a few of the current occupants. Their insights may help you determine if this is the sort of neighborhood that is right for you.