What to Know About Purchasing a Condo

As we grow older, our age can dictate our lifestyle, activity level, and ever-changing needs. The burden of a single-family home may be a responsibility you don’t wish to carry. Have you ever thought about purchasing a condominium? United Country Midwest Lifestyle Properties agents know single-family homes have their “season”. In today’s article, we address what you need to know about purchasing a condo. We’ll look at:

1. What is a condominium- aka condo?
2. The real lives of condo owners- rules, maintenance, and daily living.
3. What are some limitations?
4. I found a condo I like. Now what?
5. Steps in purchasing.

Condos aren’t strictly for aging folks! If you are looking for a lower price tag and easier maintenance and upkeep, purchasing a condo just might be the opportunity you are looking for.

What is a condo?

A condominium is an individual living unit within a community of other units. Condos look just like apartments, but instead of renting, you own your unit. Often found in larger cities, and near vacation destinations, condos offer a variety of amenities like a pool, movie theater, lounge, meeting room, small grocery store, tennis court, weight room, and more.

Real lives of condo owners

Condo living, in a sense, is a communal lifestyle. You are living next to, under, and above other unit owners. If you don’t like the closeness, condo living is not for you. But, if you enjoy people and group gatherings, a condo is a brilliant choice.

Condos are less expensive than houses and have lower maintenance requirements. You will have a monthly maintenance fee (HOA fee) paid to the condo association each month. These fees pay for the master insurance on the building (you, additionally insure your unit), cleaning in the hallways and common areas, as well as upkeep on the building, pool, and other amenities.

Besides the monthly maintenance fee, you may incur a special assessment fee. This type of fee, shared by all the condo owners, occurs because of unexpected expenses incurred by the condo building. For example: hurricanes, tornados, flooding, etc.

Each association has several condo owners who make up a board of directors. The board has the authority to act on the community’s behalf; responsible for setting policy, establishing a yearly budget, and determining what upcoming projects will be done and a timeline for completion.

What are some limitations?

Outside of the above-mentioned fees and special assessments (which the condo owners must pay or suffer being foreclosed upon by the association), condo owners must abide by all the association’s rules. Association rules pertain to your conduct, upkeep, and daily life in the building. Many associations assess their owner’s fines for the breaking of association rules. Be sure to read these rules before you make an offer to purchase.

Some condominiums do not allow children below the age of 18 to live on the premises. Other condo associations may have an age requirement- 55 years or older to own a condo in their association. There may be rules regarding pets, or there may be a no pets allowed rule.

If you want to remodel your condo, you must first seek approval from the association before changing the floor plans, walls, and flooring. Upon approval from the association, you can apply for the proper permits from the city.

I found a condo I like. Now what?

Before you decide to make an offer, be sure you have done your homework. Consider coming at different times of the day or stopping in on the weekend to see what activity level there is around the building. Check out the entire property. Look at the exterior, common areas, and parking area. This investigation will tell you if the property is in good shape or not.

During your investigation of the exterior, did you find any water damage? Did the siding or brick look in need of repair? How did the roof appear? What about sidewalks or walking paths? Are the parking areas well-lit? Is the parking garage clean? Do you see cleaning staff working in the common areas of the building?

Next, you will want to ask the current condo owner for the building’s financial report. Once you review these reports, you will have a better understanding of the building’s financial shape.

Pay close attention to the reserve funds. Reserve funds are the lifeblood of the building and its yearly operating budget will tell you their commitment to keeping the building in top condition.

Steps to purchase

Each building will have its condo association. BEFORE you can make an offer to purchase, you must first apply with the association–they want to know your credit history, profession, general lifestyle, etc. There are fees associated with the application. You will need approval from the condo association first before you can make an offer. Once the association approves of you, you can make the offer to purchase.

Your bank will require more of a down payment for your condo than a single-family home. The average down payment is around 25%. This percentage will depend on your bank’s policies and your geographic location.

Seldom does a condo qualify for an FHA loan, but there are some instances where an FHA loan would apply.

United Country Midwest Lifestyle Properties offers our clients a full-service agency to meet all your changing lifestyle property needs. Condominiums are a great way to ease into home ownership and downsizing; enjoying less responsibility. With a variety of amenities and events for social gatherings, condos can be a fun and healthy lifestyle.

United Country Midwest Lifestyle Properties. People and properties are our two favorite investments. Call us today at 608-742-5000.