Condo homes are a great option for first-time homebuyers and active adults looking for a smaller home. A condominium home is a single-family home that is part of a larger housing complex with shared spaces. When you buy a condo home, you don’t own the land and there is a homeowners association (HOA) that manages everything. There are many benefits to owning a condo home. There is no garden to take care of, it costs less than a comparable single-family home, several additional services are often included (such as swimming pool, gym, covered or reserved parking, etc.) and there is a community atmosphere among the residents.
Looking to buy a new home in condominium is similar to looking to buy a single-family home but with some special considerations that we detail below.
The Condominium Owners Association or HOA
It is likely that the condominium is managed either by an association of owners of the condominium and a property management company or by an association of all the owners who decide (by majority) what can or cannot be done in it. Sometimes, the condominium board will interview you and decide whether or not to allow you to buy a home in the condo.
- The Rules – Before buying a new condominium home, find out what their rules and regulations are as you will have to respect them now and in the future or pay heavy fines.
- Las Expensas – To properly maintain and manage the property, condominium owners must pay monthly or quarterly fees. Find out in advance what the amount is and what they cover.
Additional Services and Responsibilities
The additional services offered by a condo, such as a gym, swimming pool or a concierge, can be very attractive to some buyers. So find out what is and isn’t included and what things can mean an additional cost (such as parking or an extra deposit). It is also important to find out who is responsible for performing the different types of maintenance, such as replacing the windows or repairing the entrance portico. Believe it or not, not all porches and balconies are included in the ownership of a condominium home.
Prestige
Because owning a condo home means not having full control over the situation of your home, research the reputation of the condo and the company that manages the property and maintains it. Pay attention to any warning signs such as bad ratings or online reviews.
When it comes to new construction, you don’t have to worry immediately about long-term maintenance, but how the building is preserved will impact your investment. Research the company that built the condo and find out if they usually do work that stands the test of time.
Environment
If you are looking for a condominium home in a building, you will probably give value to the eye. But, before you invest in a particular view, take a look at vacant lots or parking lots that could be developed in the future. Of course the future is impossible to predict, but you can find out through the zonal authorities and the city’s master plan what the future might bring.
Financing
Getting financing for a new condo home depends on a number of unique factors. In addition to the individual borrower, the condominium project itself must receive approval from the lender and that is the responsibility of the construction company. For this reason, ask the builder what kind of financing has been approved in the past. Some of the factors that lenders consider to proceed to approve both the project and the individual are: the percentage of units pre-sold by the builder, the percentage of units that will be destined to vacation or rental housing, the percentage of units that will be owned by a single investor, various types of property insurance, etc. To learn more about this topic, read our article How to Finance a Condominium Home.
If the condominium project has not been approved, the loan options will be much more limited and the conditions higher. However, instead of thinking of project approval as another obstacle, this should give potential buyers of a condominium home confidence. A real estate agent in Massachusetts points out: “The ability to get a mortgage for a property is not only important when you are a buyer, but also later when you are trying to sell your home. The last thing you want is to own a home that is not possible to mortgage in the future” Lenders abhor risk, so if they have approved a project, it is financially sound and if they did not approve it can be a risk for you as well.
One more tip
Ready to start looking for your own new condo home? To start the website of CasasNuevasAqui allows you to search for condominium homes in the area you want. Kyle Hiscock, a Rochester, New York, Realtor, recommends working with agents specializing in condo home sales. He states, “A real estate agent with experience selling condominium homes will know how to guide you through the process and ensure that no important documents are overlooked.” We agree! The process of finding and buying a condo home is different than buying a single-family home or other type of property, so it’s best to work with someone who knows the ins and outs of buying condo homes well.