Tips on How To Buy a Condo

Condos are a great option for busy city-dwellers who don’t want the hassle or expense of maintaining a detached residence. In some cases, condos are the only option; detached homes in urban settings are so expensive that they’re out of many people’s reach. Buying a condo may be your best or only option, but don’t sign on the dotted line until you know these vital facts about condo ownership.  

Examine the master deed and condo docs.

The Master Deed and condo docs are a vital part of the condo-buying process. Condo docs include the Declaration of Covenants, Conditions and Restrictions (CC&Rs), the condo association bylaws and the budget. You should examine these documents with a fine-toothed comb before you buy a condo. Make sure you understand the condo rules. Find out how the property is divided.

If there’s anything you don’t like about the condo docs, find out if there’s room for negotiation or be prepared to move along. When you buy a condo, you’re buying into your neighbors and the condo’s rules, and you should know up front whether or not you’re capable of living with them.

Look at condo financial statements.

The condo association financial statements are a key factor in determining whether or not to buy a given condo. When you review the financial statements and budget, take a look at how the money is allocated. Do any of the expenses seem unreasonable? Is there any frivolous spending? How have condo fees fared in the past several years; steady increases consistent with inflation, or large spikes that don’t seem to be related to any other activity? Examine the budget thoroughly before you make a decision to buy.

Figure out how parking and storage works.

It may seem like a minor concern in the long run, but condo parking isn’t always obvious. Is it deeded parking, or first-come, first-serve? Is there parking for guests? Do residents have trouble finding parking? How about storage; does the condo offer it at all? Is it secure, and do you have a fair allotment of space?

Ultimately, these are relatively minor factors in the condo buying decision process, but they are important questions to ask. The answers can give you a better idea of whether to buy, and insight into how the association works.

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Steve SchraderBachar is a local mortgage planning expert who resides in Iowa and provides service to the clients of his mortgage planning practice across the Midwest.  You can reach Steve at 1-515-289-4381 or 515-360-5197.