Questions to ask when buying a condominium — RISMedia
Buying a condo offers certain advantages over other types of homes. Often with better access to amenities and a simplified lifestyle, condo living is becoming increasingly popular.
But buying a condo is different from buying other types of homes and requires the buyer to ask additional questions. Before making an offer, there are a few questions to ask yourself 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 condominium fees?
When buying a condominium, the purchase price is not the only cost you need to consider. There will also be monthly fees to pay, which may come as a surprise if you’re not used to living in a condominium.
Although there are ongoing costs with any type of home, these costs are more apparent when buying a condo. Make sure you know the costs and how they compare to similar developments. Your real estate agent should be able to help you with this information.
What are condominium fees used for?
What these fees cover varies by community. Monthly condo fees generally cover the following:
- Maintenance of common areas
- Insurance for common areas
- Amenity costs, such as a swimming pool or gym
- Security fees
- Reserve fund
- basic cable
- Water and sanitation
- Garbage collection
- the Internet
Will I still need insurance?
Although some of your fees cover common areas and building insurance, you may still need protection for your belongings. This will be similar to renters insurance which only covers contents and liability. It will protect you from damage to things inside your home or if someone gets hurt on your property.
What rules should be followed?
Although there are rules and regulations that you will need to follow when purchasing a unit; these will not be too strict. Despite this, you should make sure you understand what is expected of residents and what is allowed and what is not.
There could be rules on parking or restrictions on renting the unit. Knowing these things ahead of time will show you if this is really a resort you want to buy a condo at. Sometimes the benefits of an HOA are great 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 which could mean the home is not for you at all.
They might restrict the number or type of pets or the size of dogs allowed. Sometimes these types of restrictions affect tenants more than landlords in a condo development, but it’s essential to be aware of them before bidding on a home.
Are there any outstanding legal issues?
Before buying a condominium, you want to be informed of any disputes. Often this can be between the builder of the development and the association, but you should find out about the situation beforehand so you can decide if it is best to look elsewhere.
Will there be special reviews soon?
If major 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 for the cost of these problems, but if there is not enough money to cover the expenses, a special assessment will be required. This means that the bill will be split between the owners of the condos, so it is essential to know this before buying.
A special assessment is a hidden cost when buying a condo that many people are unaware of.
Find out about previous special assessments and if there are any known issues that need to be resolved. If there hasn’t been a special appraisal for a long time and the building is older, you can expect a greater likelihood of an appraisal within a reasonable time frame.
How much is in reserve?
Knowing the amount of the reserve fund will indicate the likelihood of a special contribution. A well-run association should reserve 10% of its annual budget for new developments and 25% or more if it is more than 10 years old.
Is there extra storage space?
One of the biggest drawbacks of moving from a large house to a condo is the lack of storage. Some communities have additional dedicated storage space. Make sure you have enough storage space, otherwise you might get rid of more of your stuff than expected or rent a storage unit.
How easily do the condos in the development sell?
Are the homes in the complex in demand or are they staying listed longer than average? You should consider how easy it will be to sell your condo and its resale value before buying.
Final Thoughts on Buying a Condominium
Buying a condo is very different from buying a house. Make sure you have thoroughly researched not only the condo, but also the HOA that manages the property. Costly mistakes are made assuming everything is great. Your real estate agent should be able to help you with all the due diligence needed to make a wise buying decision. Appearances can be deceiving.
Bill Gasset is a nationally recognized real estate leader helping people buy and sell real estate in the Massachusetts metro area for 35 years.