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10 Tips for Buying Your First Condo

10 Tips for Buying Your First Condo

Buying a condo, which is short for condominium, is not the same as buying a single-family home. There are differentconsiderations that need to be taken into account prior to purchasing! In many real estate markets, purchasing acondo can come at a much lower price than purchasing a single family residence.

A condo is typically a shared piece of property with individual owners of each “unit” or condo. In most cases,condominiums offer services such as, but not limited to, fitness centers, tennis courts, and pools. Many peoplepurchase condos due to less maintenance and also the lifestyle of living in a condominium community.

When buying a condo, it’s important you know that every condominium community is different. It’s crucial toknow each community will have their own community rules, association fees, management company, and amenities. Depending on the community, there may only be a handful of condo communities but there also could be hundreds,so do your research!

What tips do you need to know when buying your first condo? Here are 10 tips to use when buying your firstcondo!

Determine Whether a Condo is the “Right Fit”It’s very important to ask yourself before buying your first condo, “Should I Buy a Condo?” As mentioned above,owning a condo is much different than owning a single family residence. Weighing the pro’s and con’s is a must!

One major difference between a condo and a single family residence is the proximity to your neighbors. It’s verypossible you may have multiple neighbors condos attached to yours instead of your own, free-standing residence. Can you envision yourself living that close to your neighbors?

Another important consideration in determining whether a condo is the “right fit” or not, relates to the maintenancethat is usually included in the association fees. If you enjoy cutting the grass and planting your own flowers, than

Obtaining Financing Can Be Tricky When Buying a Condo

likely a condo is not going to be the right fit. Most condo communities include the lawn maintenance, snow removal (ifapplicable), and exterior maintenance.

Hire a Real Estate Agent Who Has Experience Selling CondosSelling a condo is much different than selling a single family, multi family, or vacant land! The purchase contract for acondo is not the same as it is for other types of residences. There are different contingencies than the commoncontingencies that are in a residential purchase and sale contract.

One main difference when purchasing a condo is that most communities will require a contract to be signed inaddition to the typical sales contract prior to closing. The contract that a community will make you sign usually willstate that you understand and agree to the association rules and regulations.

Due to these differences, it’s important you work with a real estate agent who has experience selling condos! A realestate agent who has experience selling condos, will know how to guide you through the process and ensureimportant documents are not overlooked.

Obtain FinancingFinancing of a condo is not the sameas a single family residence. Justlike purchasing a single family homeit’s critical to get pre-approved priorto looking at condos as well asdetermining whether it is the “rightfit.” Obtaining financing can be trickywhen it comes to purchasing acondo, as many lenders and loanproducts do not allow condopurchases.

Condos are very often purchasedwith cash due to the regulations oflenders and programs. If you’replanning on obtaining a FHA(Federal Housing Administration)Loan, the first step is to make surethe condo community is on theirapproved community list. NormallyFHA requires that 80% of the units inthe building are owner-occupied, somake sure the community is on theirapproved list, before falling in lovewith a property!

A buyer still can obtain a privatemortgage for a condo purchase. This often comes at a much highercost, as many private lenders willrequire a minimum of 20% down ona condo purchase. Purchasing acondo may not be the best fit if youdo not have a substantial amount ofmoney saved for a down payment.

Know What the Condo IncludesThis may sound like a silly tip, but it’simportant to know exactly what thecondo includes. When purchasingyour first condo, make sure you findout if the condo includes a reservedparking spot or additional storage! Does the condo community offeradditional parking for your guestswho visit you? Is the parking spot ina covered garage?

During a recent condo sale inRochester, NY, the seller rented herparking spot out to one of her fellowcommunity residents. Fortunately,there was no long-term agreementbetween the seller and theirneighbor! It’s important you knowthat the parking spaces and/oradditional storage areas are going tobe available at the time of closingbefore you purchase the condo! Thelast thing you want to find out is youhave no where to park your car aweek prior to closing.

Know What the Association FeesAreIn most condo communities, there isa monthly, quarterly, bi-annual, orannual fee that is required by eachresident. The association fees areused to cover common expensessuch as insurance and maintenance.

A well-run condo community will behappy to share their financialstatements to a potential purchaser. It’s important to know when buying a condo that the community has a large amount of reserve funds in the event amajor repair is required, such as a roof replacement. Ask the community how the association fees are divided andwhere they are distributed too.

Association fees can also impact whether a buyer can afford the condo or not. When approving a buyer, a lender isgoing to add the association fee into the monthly debts of the buyer. If a condo community has a very high monthlyfee, it’s possible a buyer cannot afford it, due to the high fee!

Know What the Association Fees IncludeHow much the condo community association fees are is a very important piece of information to know when buyingyour first condo. Equally as important is knowing what the association fees include. As mentioned above, the feesgenerally include insurance and maintenance. Know exactly what the association fees include and what, if any

Review The Association Rules Before Buying a Condo!

exclusions apply.

In addition to the insurance and maintenance, association fees also commonly include lawn maintenance, snowremoval (if applicable), landscaping, water, sewer services, road maintenance, and trash pickup. In some cases, theassociation fees can even include the heating and electric!

If a condo community has additional amenities such as pools, fitness centers, tennis courts, or a clubhouse, theseare able to be kept up from a portion of the association fee. If these additional amenities are not something thatinterest you, than it is important to understand you are still paying for these amenities to be offered to other residents.

Review Association RulesSeeing as most condos are in closeproximity to one another, thecommunities association will haverules and regulations. Due to this,many associations will have lots ofdifferent rules and regulations, inorder to “keep the peace” in thecommunity! It’s important tounderstand that unlike a single familyhome, you cannot make your ownrules and do whatever you want. Inmany cases, buyers don’t care toreview the association rules andhave their attorney review on theirbehalf instead.

Many communities will restrict thetype of pets or if any pets are allowedperiod. The last thing you want tofind out is your animal is not allowedin the community! Other commonrules in many condo communitiesrelate to whether a unit can berented or not or whether there arequiet hours. If you have ever had todeal with a bad neighbor in the past,you can understand why these rulesare such an important part of acondo community!

Ask About Special AssessmentsFirst it’s important to understandwhat a special assessment is. Aspecial assessment is typically alarge fee that is charged to cover asignificant project within thecommunity. An example of asignificant project that would beconsidered a special assessment,is a structural repair to the condo.

Why is this an important tip for a first time condo buyer? If a special assessment is in the future plans, it’s possiblethat the association fees can raise for a specific period of time. For example, a condo with a monthly association feeof $400 could increase to $500 for a year to cover the expense of a roof replacement. Any planned specialassessments should be provided to a potential purchaser with full disclosure.

Research Maintenance and Management CompanyKnowing who maintains the property is extremely important! Who is in charge of cleaning the common areas? Is thework completed by an outside company or are the residents of the community encouraged to help with the upkeep? Acondo community that is not well maintained can be very frustrating and can also effect the resale of the condo in thefuture!

Most condo communities have a management company. The management company is normally in charge of day-to-day operations. This can include enforcing the association rules and regulations, handling questions from residents,and handling the condos finances. When buying your first condo or tenth condo, if you have questions regarding thecommunity rules, regulations, or fees, the management company is whom you should speak with. As you can see,the management company plays a vital part in whether a condo community is successful or not. If the managementcompany is non-responsive or has a bad reputation, this is something that you should consider prior to purchasing!

Predict Your Future PlansPredict the future? Foolish, I know! It’s impossible to know exactly what is going to occur in the future, but mostpeople have a plan for their future. This should be no different when buying your first condo!

A condos value typically will not appreciate as much as a single family residence. This is why it’s important to have agood idea what your future plans are. If you plan on remaining in the condo for ten years, then the rate ofappreciation is not as important if you plan on moving in a year or two. Just like knowing what the future will hold foryou, it’s impossible to know what will happen to market values in the coming years.

The above 10 tips for buying your first condo are all equally important considerations to make prior to closing! Buyingyour first condo can be a very exciting time and can be a relatively smooth process! By following the above 10 tipsyou will be very happy and comfortable in your condo, should you decide to go that route.

What other tips would you suggest when buying a condo?

Other Condo & First Time Buyer Resources

Questions to Ask When Buying a Condo by Bill Gassett

Should You Buy a House or a Condo via Realtor.com

First Time Buyer Tips & Advice That Must Be Read

Buying a Condo in a Broke or Underfunded Home Owners Association by Godutch Realty

FHA Condo Approval Requirements: Sellers and Buyers Beware by Bill Gassett

If you are buying or selling a condo in the Greater Rochester, NY area, please contact us, so we can ensure theprocess is smooth and stress-free! If you are unsure if buying a condo is the “right fit” we’d love to discuss ourexperience and knowledge to help you make an educated decision.

About the authors: The above article “10 Tips for Buying Your First Condo” was provided by the Keith HiscockSold Team (Keith & Kyle Hiscock). With over 30 years combined experience, if you’re thinking of selling or buying,we’d love to share our knowledge and expertise.

We service the following Greater Rochester NY areas: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton,Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush,

Honeoye Falls, Chili, and Victor NY.

Visit our website at www.HiscockHomes.com.