Are You a First-Time Homebuyer? How About a Condo?
If you haven’t considered a condominium unit as a potential prospect for a home, read on to find out if condo ownership may be a great choice for you.
There are benefits and drawbacks to ownership in a common interest community, like a condominium. You can still build equity like a single-family home but without a lot of the work and headaches. You don’t have to worry about exterior maintenance and you can have an opportunity to be social in a new community.
Fewer Maintenance Fees
One of the benefits to living in an apartment is that you really don’t have to do anything. If something breaks, someone comes to fix it. You don’t have to mow the lawn, remove snow, fix the broken driveway…in fact you really aren’t responsible for any exterior maintenance at all!
When you own a condominium unit, typically you own just the interior of the unit. Once you step in through the door, you own it; once you step out, you don’t own it. There are exceptions to this but for the most part, you aren’t directly responsible for any of the exterior maintenance. You don’t have to mow the lawn or clear the driveway and sidewalks of snow.
This can lead to fewer out-of-pocket expenses from the onset. If you are living in an apartment now, chances are you don’t own a lawnmower, a snowblower or even a ladder. These are all items you would have to purchase when you buy your home. Since many first-time buyers have limited cash assets to buy a home, money would have to be reserved for these items which could impact how much can be spent for the home purchase.
If It’s To Be, It’s Up To Me
When you purchase a single-family home, you would be solely responsible for all maintenance and upkeep of the property. If the roof is leaking, you have to pay to have it fixed. If the grass gets too tall, you have to mow it. If your deck needs paint, you paint it.
Generally with condominiums, the Association is responsible for anything to do with the exterior of the property, which could include the roof, siding, windows, deck, patio, lawn, shrubs, driveway, parking lot, sidewalk and steps. This is not always the case and it depends on what you actually own as a unit owner, which can vary from condo to condo.
Sense of Community
This can be a positive or a drawback for folks. If you are new to an area and really don’t know anyone, this could be a potential positive. Many condominiums have recreation rooms, pools, tennis courts and activities for unit owners. The close proximity of the units seems to encourage socialization. In addition, the Association is required to hold periodic meetings which can be a good place to meet some of the others in the community.
Others view it as a drawback for the same reasons. If you are someone who requires privacy, a condominium may not be an ideal choice for you.
The Association is Similar to a Small Town
You are part of a community and an Association, which functions similar to a small town. The Association as a whole controls what goes on in the community and each unit owner has a say and a vote these matters. This can be great or terrible depending on the members of the community.
There is a Board of Directors that governs the Association and upholds the rules of the community. This can be hit-or-miss as to whether the Board members rule with an iron fist or turn a blind eye to everything.
At the end of the day, you are subject to the will of the majority of the unit owners. This can also lead to “special assessments” to fund large projects in the community, such as new roofs or a paving project. A special assessment is an additional monthly fee that all unit owners must pay to fund the projects.
My Best Advice – Get a Real Estate Agent that Specializes in Condominiums
Buying a condominium is different than buying a single-family home. Although any licensed real estate agent has the ability to help you to buy a condo, not all of them are qualified to do so. When interviewing real estate agents – and YES, you should be interviewing agents! – ask them if they specialize in condominiums. Ask to see a printout of the units they have sold over the past 12 months.
A condominium specialist will have his/her “finger on the pulse” of the condominium communities in the area. The agent would have an idea about the Board members, the community and the sales price trends of the units.
An agent that is a condo specialist should be able to read the financial statements of the Association. This is important if you wish to avoid paying additional special assessments. The agent should also be able to direct you to a competent real estate attorney who also specializes in condominiums.
My first home was a condominium unit and I loved it. I had quiet neighbors and a pool but the best part was that I didn’t have to do any exterior maintenance. When I decided I was ready for a single-family home, my unit had appreciated enough to provide me with funds to be able to do so. It was a great stepping stone and an ideal first home for me.
If you are a first-time homebuyer and have questions about condominium ownership, please do not hesitate to ask me a question.
Images courtesy of Stuart Miles/freedigitalphotos.net
The Condominium Project Approval Team at ReadySetLoan is dedicated to helping condominium projects across the nation to obtain their approvals with FHA and the VA or become recertified with FHA. We have assisted nearly 200 condominiums and we can help your association.
ReadySetLoan is an active member of the Connecticut and New England chapters of the Community Associations Institute (CAI) and is a frequent contributor to Common Interest Magazine as an expert in FHA/VA condominium project approvals.
Please contact us with any questions regarding FHA or VA condominium project approvals. You can email me at firstname.lastname@example.org or call me at 404-433-4565. I will be happy to answer any of your questions.
FHA/VA Condo Approval Specialist
404-433-4565 Cell Phone
860-644-3772 Fax Phone
Check out our article in Common Interest magazine on page 19!