3 Questions to Ask Before Buying a Condo

Date: January 30, 2019



People shopping for West Chester and Liberty Township homes for sale often consider buying a condo as their first foray into the marketplace. A condo can be a great way to test the homeownership waters, and to build equity in a piece of real estate that can be used to buy a larger home down the line. Condos are also great for anyone who doesn’t want to take on the full responsibilities of a single family home.


But before jumping the gun on a condo, there are some nuances to buying a condo that prospective homeowners should consider. Here are three questions to ask before submitting an offer on a condo.


How many units are owner-occupied?


One thing that many buyers don’t realize when shopping for West Chester and Liberty Township real estate is that condo buildings are evaluated differently by lenders than single family homes. Most banks will want to know that at least 50% of the condos are owner-occupied instead of being used as rentals. In West Chester and Liberty Township, this doesn’t tend to be an issue – the majority of condos tend to be owner-occupied. However, this isn’t always the case, especially with townhomes where the building only has a few units. Anyone looking to buy a condo in a building that is less than 50% owner-occupied may have trouble obtaining traditional bank financing.


What do the condo docs say?


There are a few different types of condo documents that you’ll want to review with a fine toothed comb before submitting an offer. The first is the Master Deed, which is typically recorded as soon as the condos are built. The Master Deed has a description of the property, including the boundaries of the units (often a layout of the units, too) and the description of common areas (indoor and out). The Master Deed may lay out some basic rules for the property as well, such as rules around parking, ability to rent the condos, and restrictions on use (such as using the condo for business purposes instead of strictly residential).


The condo association’s Rules and Regs is another set of documents you’ll want to review. This includes more detailed specifications about what’s allowed on the property and within each condo, such as rules around pets, guests and trash collection. The Rules and Regs are more likely to be updated from time to time by the association than the Master Deed, so you’ll want your West Chester or Liberty Township real estate agent to ask the listing agent for a copy of the most recent Rules and Regs before submitting an offer.


Why is this important? Well, here’s a good example: we were recently working with a couple who wanted to buy a one-bedroom condo for their small family (they have a 1-year old baby). The living space in the condo is huge and lends itself to putting up a wall and subdividing the space to construct a second bedroom. On the surface, this seemed like it would be pretty straight forward – and if it were a single family home, it would be. But we went through the condo docs and found that any interior construction in excess of $1,000 requires permission from the Condo Association Board first – and after digging a bit deeper, we learned that this particular Condo Association doesn’t look favorably on that type of construction. Adding a second bedroom could actually be in violation of the condo docs. So while it’s not guaranteed that they couldn’t add a second bedroom, there’s a chance they wouldn’t be able to. And then they’d be stuck with a condo that doesn’t work for their family.


When in doubt, review all condo docs with a local attorney to ensure there are no surprises down the road.


Is the Condo Association well run?


When buying a condo, you’re essentially getting into “business” with the other condo owners. In a large building, your share of the responsibility is limited and usually, decisions are made by majority vote. In a smaller building, one with only a few units, one difficult condo owner can make life miserable for the other owners. Number of owners and size of the condo association is definitely something to consider. For instance, if the roof needs to be replaced – are you on the hook for 1/3 of that cost, or 1/32 of that cost? It depends on the number of owners who share the responsibility with you.


Another thing to look at before buying is the health of the condo association’s reserves. Ask to see a copy of the budget to see how the condo association invests your condo fees each year, and to determine whether there are robust reserves in the event a major expense pops up. Otherwise, you could end up on the hook for a costly special assessment that may be levied for a major repair.


Thinking of buying a West Chester or Liberty Township condo for sale? Give us a call today. We’d be happy to work with you – to ask all of these questions for you – as you move forward with your home search!