Buying a Condominium Requires Doing Your Homework

Real Estate Agent with The Buyers' Counsel

CondominiumsBuying a Condominium Requires Doing Your Homework


Helping a client with the purchase of a townhouse recently has reminded me that a condominium purchase can actually be more involved than buying a single family home.  This is partially due to the fact that you need to be concerned, not only about the unit you are buying, but also with the strength and stability of the entire condominium complex. 


Before entering into the purchase of a condominium there are some important questions that need to be researched.  

  1. Monthly condominium fees - Depending on the complex, these can be significant and they figure into your overall monthly expense of home ownership. You will need to find out what the fees are and exactly what they include.  Fees typically go toward the maintenance of common areas, landscaping, snow removal and the master insurance.
  2. What is the percentage of renters vs. owner occupied units?  Being in an environment of rental properties can have a direct effect on resale value.  Additionally, depending on the type of financing you are seeking, your lender will want to know the owner-occupancy rate of the condominium complex.
  3. Bi-laws and covenants - These rules can govern how you can decorate your home, pet ownership and whether or not you can rent out your unit.  It is not atypical in a condominium to have to control your noise levels or show a certain color, usually white, of window treatment from your unit.
  4. What does the master insurance cover?  You will need to get a copy of the condominium's master insurance policy and examine it to see what your responsibility will be with regard to coverage.  Most condo owners have to insure their own personal belongings or everything within your unit's walls. This includes carpeting, flooring, appliances and your own fixtures.
  5. Check recent resale values at the complex - Have sales of units been keeping up with the rest of the condo market?  How have the "days on market" fared?
  6. What is the parking situation at the complex? When you have guests they will need a place to park. Most condominium complexes have some provision for guest parking.  How many spaces are there for your guests and where are they located?
  7. Have unit owners been delinquent in paying their condo fees?  If there is a large delinquency rate of owners paying their fees this is sign that the complex could be falling into financial trouble and this will not bode well for any future repairs, improvements or resale value.
  8. Are there any special assessments that are currently due?  When a condominium project has fallen short on their budget sometimes the onus for special repairs (new roofs, decks, common areas) must fall on the owners.  This will be in the form of a special assessment that needs to be paid either annually or monthly.  You really do not want this type of surprise.

In addition to the above, you will need to check out the management company and see whether or not it is professionally run.  This information should be provided by the listing broker or seller along with all of the condo documents as well as the financial statement and budget. All of this information should be carefully reviewed by your attorney.

Typically banks have a standard questionnaire that they require for all condominium purchases but if it is a cash deal you will need to come up with a list of your own and have the questions answered sufficiently by the owner or the management company prior to purchase.

For a more carefree lifestyle a condominium can offer some distinct advantages over single family living.  Just be sure to do your homework to ensure a happy and safe investment in your new home.

Copyright 2010 "Buying a Condominium Requires Doing Your Homework"

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Claudette Millette, Broker, Owner, The Buyers' Counsel - (508) 881-6230

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Comments (64)

Sam White
College Station, TX
Integrated Marketing - Bryan College Station,

Condo buying is different, especially in this day and age. Financing is a problem here for condos. They are still a major part of my business. Have a great Thrusday!

Jun 24, 2010 12:45 AM
Brian Madigan
RE/MAX West Realty Inc., Brokerage (Toronto) - Toronto, ON
LL.B., Broker



I think #7 is particularly relevant. This could be one of the first signs of an investment starting to go sour.



Jun 24, 2010 12:46 AM
Karen Kruschka
RE/MAX Executives - Woodbridge, VA
- "My Experience Isn't Expensive - It's PRICELESS"

Claudette  I think that same caution applies to all real estate today - your points are well done

Jun 24, 2010 01:03 AM
Toronto, ON

Claudette - Purchasers in Ontario should also take a very good look at the condo's status certificate.

Jun 24, 2010 01:09 AM
Gloria Valvasori, Accredited Senior Agent
REAL Experience | REAL Commitment | REAL Results!

Great checklist, Claudette.  There is also one other clause I always insert into the offer and that is that the Sellers have not made any changes to the unit that required permission from the Corportion, without getting the written permission.  If they did, the news owners could be liable and made to pay any costs associated with restoring the changes back.   i.e. if all owners are required to have the same colour on the front door, they must restore it back to its original colour...

Also, when buying a condo apartment, I always check the registration of the unit, to ensure the correct legal description is on the contract.  Just because the unit is #2301, doesn't mean its on the 23rd floor....

Here in Canada after the offer has been accepted, the Seller obtains a Status Certificate from the management company, and the buyer's lawyer reviews it to ensure everything is in order, i.e. the insurance is in place and effect, checks the year end date to see if any increases are coming up in the maintenance fees, checks for any special assessments levied, ensures there is sufficient funds in the reserve fund of the corporation, any for outstanding lawsuits, which could adversely affect the corporation and the owners.   If all is in order, then the buyer waives that condition and firms up the offer.

Have a great day!  and thanks for sharing all that great information.

Jun 24, 2010 01:49 AM
Rodney Mason
Guaranteed Rate NMLS# 2611 - Atlanta, GA
VP of Mortgage Lending - AL, FL, GA, SC, & TN

Purchasing a condo in today's lending market can be tricky.  Its very important to get as many of the facts up front as possible.

Jun 24, 2010 02:33 AM
Cliff Johnson
Solid Source Realty - Stone Mountain, GA


    Great Post! This is a good list. You are so right.

Jun 24, 2010 02:38 AM
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

All great points and I have run into these as problems over my real estate career. It is especially important when either insurance can't be funded or repairs done by the homeowners. What often happens are the special assessments can get large.

Jun 24, 2010 04:15 AM
Brian K. Babcock
Keller Williams Realty / S.J. Gateway - San Jose, CA


Thanks so much for this post.  It was perfect timing & great info. as I have one client in contract for a condo & another client looking into investing in condos / TH's.



Jun 24, 2010 04:31 AM
Brian Skaar
VanDyk Mortgage - VA, FHA, Conventional, VA Jumbo, Jumbo, Purchase Loans, & Refinance, Direct Lender - San Diego, CA
VA, Jumbo, FHA & Conv Direct Lender (760) 752-4480

Hi Claudette,    Well written,  all important points to consider, both for loan qualification and the health of the HOA. 

Jun 24, 2010 04:49 AM
Susan Laxson CRS
Palm Properties - La Quinta, CA
Local Knowledge & Global Network

Claudette, great list and I will reblog for my clients!  Thank you!    Susan

Jun 24, 2010 05:08 AM
Damon Gettier
Damon Gettier & Associates, REALTORS- Roanoke Va Short Sale Expert - Roanoke, VA
Broker/Owner ABRM, GRI, CDPE

Great post! Especially the part about the management company.  We have more problems getting POA's from management companies than anything else.

Jun 24, 2010 05:43 AM

Great Post. 

I don't know if there is a distiction in you area, but on the left coast, add to your list form of ownership.  Is it condominium or townhouse ownership.  Out here there is a differance.

Jun 24, 2010 06:21 AM
Cheryl Ritchie
RE/MAX Leading Edge - Huntingtown, MD
Southern Maryland 301-980-7566

This is a bookmark, a reblog, and a reread. Great post. Thanks for sharing!

Jun 24, 2010 07:59 AM
Dean Carver
United Brokers Group/Carver Home Team - Ahwatukee, AZ

Fortunately, you have a relatively low foreclosure rate there. We've had several instances lately with lenders requiring last minute certs for % of delinquent HOA dues and percentage of foreclosures.

These items can change significantly over the course of 45 days. The real estate agents involved need to be on it and watching for changes.

Jun 24, 2010 08:02 AM
Adam Malachi
A 2 Z Realty LLC - Castle Rock, CO

Excellent post! Great and valuable information's! HOA sometime are pain to deal with!

Thanks for sharing,


Jun 24, 2010 08:39 AM
Terrie Leighton
Ferrari-Lund Real Estate - Reno, NV
Reno Real Estate Agent ~ Selling Homes in Reno

Great information Claudette. There is so much information that really needs to be asked prior to considering show clients condos or townhomes. With the real estate market the in such turmoil you just never know what association are current with dues, insurance and so on.

Jun 24, 2010 09:03 AM
Josette Skilling
Keller Williams Capital Properties - Bethesda, MD

And the problem with even a great checklist like this one is that each lender has different requirements and may interpret the data differently.  As I just learned the hard way on a recent condo transaction!  Even with asking all the right questions up front and ensuring that every item on this list was checked off, there was a major problem at the last hour...

Jun 24, 2010 11:49 AM
Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Buy Daytona condos for heavenly good prices

i might be different in other states, but in Florida roof should not be the cause of Special assessment as this is a mandatory item in the reserves.

Well, in Florida usually hurricanes take care of roofs, I mean the insurance

If it is a professionally built roof, it has a good chance to surpvive until a good hurricane takes it out

Jun 24, 2010 04:38 PM
Keller Williams Select Realtors-Buy a home in Washington DC. Sell a home in Washington DC - Bowie, MD
I don't make promises.I deliver results.SOLD HOMES

This is going to be a re-read and bookmark. Thanks for sharing this Claudette. Have a great weekend. Great post.

Jun 26, 2010 02:02 PM