How to Buy a Condo

Co-authored by Nathan Miller and Janice Tieperman

Last Updated: January 31, 2023 References Approved

Ready to take the plunge and buy your very own condo? Purchasing your own place is definitely a big decision, but it doesn’t have to be a difficult one. We’ve outlined plenty of tips and suggestions to help you navigate the market and the condo-buying process, so you can make a smart, informed decision about your future abode. Keep reading to get one step closer to buying the condo of your dreams!

1

Buy a condo if you’d like an affordable place of your own.

Condos offer the roominess of a house without the extra upkeep. When you buy a condo, you don’t have to worry about mowing the lawn or keeping your bushes trimmed. Instead, you pay a monthly fee to your condo association (also known as an HOA), which takes care of all your landscaping needs for you. These fees also cover special amenities, such as a pool.^{[1]
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- If your condo complex has a lot of fancy amenities, you may have to pay more each month.
- Condos definitely have a cheaper pricetag compared to a single-family home, but they may not be worth as much when it’s time to sell.

2

Get a real estate agent with condo experience.

They can help walk you through any potential issues you may come across. Buying a condo involves a lot of paperwork and fine print, which can be challenging to navigate on your own. An experienced real estate agent can help you watch out for red flags, and can make sure that the condo you buy has everything you’re looking for.^{[2]
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- Some real estate agencies specialize in condo sales—that could be a good place to start.

3

Search for FHA-approved condos.

These condos let you finance your condo with an FHA mortgage. The Federal Housing Administration (FHA) has a specific set of standards for condos; if a complex meets these standards, they get “FHA approval.”^{[3]
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Research source} These FHA-approved complexes and units can be financed with an FHA-sponsored loan, which makes it easier for people with low credit scores to qualify for ownership.^{[4]
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- Some FHA requirements include the complex being fully built and not under construction, as well as having 5 finished condo units.^{[5]
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  U.S. Department of Housing and Urban Development
  U.S. government agency devoted to helping Americans meet their housing needs and supporting community development
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- You can find FHA-approved condos here: https://entp.hud.gov/idapp/html/condlook.cfm

4

Check if your credit score is at least 500.

A 500 credit score can get you an FHA loan. Hop online and see what your credit score is. The ideal credit score for an FHA loan is 580 or higher; with this rating, you only have to pay a 3.5% down payment. Don’t worry, though. You can still get approved for an FHA loan as your credit score is at least 500—you’ll just have to pay more money up front for your home. ^{[6]
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- Your credit card company might have features that help you stay tuned into your credit score.^{[7]
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5

Focus on condos with appealing amenities.

Pools, gyms, and spa services are all possible options. When you buy a condo, you’re also buying a portion of the pool, exercise equipment, and any other amenities the complex has to offer. Make a list of all the special perks and features you’d like your future condo to have. As you browse the condo market, use these amenities to help narrow down your search. You might enjoy features like:
- A daycare
- A game room
- Pet-friendly policies^{[8]
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6

Calculate the HOA fees.

Make sure these fees fit into your overall budget. Each month, condo owners are required to pay a fee to their condo association/HOA—this helps cover maintenance costs, like landscaping and amenities.^{[9]
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Research source} Chat with your real estate agent or a member of the condo association to get an idea of what your monthly condo fees could look like.^{[10]
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US Consumer Financial Protection Bureau
U.S. government agency for protecting consumers in the financial sector
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- For some complexes, these fees might only be an extra $200-300 or so per month; at other places, the fee could be at least $1,000 each month.
- These fees are also known as “dues.” They’re separate from your condo mortgage payments, and won’t be lumped together.^{[11]
  X
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  US Consumer Financial Protection Bureau
  U.S. government agency for protecting consumers in the financial sector
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7

Check for potential special assessments.

Special assessments require residents to pay extra for a condo-wide project. Chat with the current owner or realtor and see how many special assessments were issued over the past few months and years. While the occasional special assessment is expected as a building goes through its normal wear and tear, monthly assessment fees are definitely a red flag.^{[12]
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- For example, the HOA might issue a special assessment to replace a really old plumbing system.
- Some condo associations keep their monthly fees too low to save a significant amount in their reserves. They make up for this by charging frequent special assessments from the different condo owners.^{[13]
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8

Check how much money the condo association has in reserve.

A good condo association needs to be prepared for the unexpected. Ask the condo association for copies of their recent financial records and documents. Then, take a closer look at these records and see how much the association has saved up overall.^{[14]
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Research source} An almost empty account definitely isn’t good, and could be a sign that the condo association issues lots of special assessments.^{[15]
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- Some states require HOAs to research the amount of reserves that a condo complex needs to cover future fees, repairs, and maintenance.^{[16]
  X
  Research source} See if your condo complex has a copy of this study on hand.^{[17]
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9

Go over the rules for your condo complex.

Some condo associations have stricter regulations than others. Ask your real estate agent or a member of the condo association for a copy of the association’s bylaws. These bylaws are a list of different rules you need to follow if you live in the condo complex.^{[18]
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Research source} These rules vary by location, but cover topics like:
- If you can own a pet
- If you can rent out your unit to someone else

10

Choose a complex without any ongoing lawsuits or conflicts.

Ongoing lawsuits and conflicts are a big red flag. While every living community has its share of disagreements, there shouldn’t be any legal issues or other major problems on the horizon.^{[19]
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- Mortgage lenders might not be willing to give you a loan if the condo association doesn’t look reliable.
- Talk with your real estate agent and see if they can grab a copy of these notes for you.

11

See what current residents have to say about the complex.

Ask them if they like living there, and if they would recommend the complex to a friend. If the residents don’t have many good things to say about their community, you might be better off scoping out a different complex.^{[20]
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- Does it take a while for things to get repaired?
- What’s your least favorite part about living in this condo complex?
- Does the condo association care about its residents?

12

Take a look at the condo yourself before buying.

Check that the appliances, plumbing, and other features work properly. Take a closer look at the heating and AC systems too, to make sure there’s good air circulation around the condo. As you walk around, inspect the walls and ceiling of each room for possible leaks, and watch for any signs of loose or uncovered wiring. You can also check if:^{[21]
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- The cabinets and doors open and shut without any trouble
- The basement floor doesn’t have any cracks
- The attic vents are open

13

Inspect the condo’s amenities and landscaping.

See how well the property management group maintains everything. Take a walk around the public spaces and amenities of the complex, like the swimming pool and fitness center. Do these areas and facilities look well cared for, or are they in disarray? An inattentive property management group is definitely a red flag when you’re shopping for a condo.
- As a member of a condo complex, you pay regular fees to your condo association, which manages the lawn maintenance, amenities, and other communal aspects of the complex through a property management group.^{[22]
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  Research source} You want to make sure you're getting your money's worth!

14

Apply for a preapproved mortgage once you’ve done your research.

The lender will want to know every detail about the condo you’re interested in. Bring along a paper copy of the condo association’s budget. Be prepared to answer a lot of different questions about the complex, like how many different people live there, what insurance coverage is in place, and if the condo is in any legal trouble.^{[23]
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- With any luck, the lender will approve your loan, and you can move forward by getting your condo inspected and preparing to make mortgage payments.

Expert Q&A

Question

Is there homeowner's insurance that is specific for condos?

Ryan Baril
VP, CAPITALPlus Mortgage
Ryan Baril is the Vice President of CAPITALPlus Mortgage, a boutique mortgage origination and underwriting company founded in 2001. Ryan has been educating consumers about the mortgage process and general finance for almost 20 years. He graduated from the University of Central Florida in 2012 with a B.S.B.A. in Marketing.

Ryan Baril

VP, CAPITALPlus Mortgage

Expert Answer

Yes, there are two types of insurance that primarily cover condos. First is the "walls-out coverage"; this is obtained by the condo association and paid by your monthly dues. This policy covers anything from the walls out, like windows, the roof, the building itself, etc. Then you have the option to obtain an HO6, or "walls-in" policy. This you will pay yourself and covers all of your personal belongings inside the property.
Question

What are questions to ask for HOAs for condos?

Ryan Baril
VP, CAPITALPlus Mortgage
Ryan Baril is the Vice President of CAPITALPlus Mortgage, a boutique mortgage origination and underwriting company founded in 2001. Ryan has been educating consumers about the mortgage process and general finance for almost 20 years. He graduated from the University of Central Florida in 2012 with a B.S.B.A. in Marketing.

Ryan Baril

VP, CAPITALPlus Mortgage

Expert Answer

Ask to see the budget, and pay special attention to special assessments and reserves. Ask when the last special assessment was and when they anticipate the next one to be.
Question

At what stage are you interviewed by the HOA?

wikiHow Staff Editor
Staff Answer
This answer was written by one of our trained team of researchers who validated it for accuracy and comprehensiveness.

wikiHow Staff Editor

Staff Answer

You'll likely have to go through an HOA interview before you officially put a down payment on the condo. Try not to worry, though! This interview is actually a great time to get your own questions answered about the condo complex.