Buying condo units have advantages and even disadvantages to would be buyers. But first, let me tell you the main difference between the two. When you buy a condominium unit, you get the exclusive right to the interior space of your dwelling unit, but the land, walls, grounds, fences and facilities are owned in common with the other owners in the complex. With a house and lot, the entire home and even the land belongs to you. This is called "fee simple" ownership.
Let’s dig it deeper, a condo unit is usually attached to other similar units by a common wall, while a house is detached. However, a recent trend is to develop detached condominiums, where the land and improvements are owned in common. There are also some attached houses where the land is individually owned. These neighborhoods are called Planned Unit Developments (PUD.)
Condominium owners usually can't remodel at will, while single-family house owners are relatively free to make changes to suit their personal needs and tastes.
When buying a condominium you should include a contingency to review and approve the Condominium Title Certificate (CTC), the articles of incorporation, the bylaws and the rules and regulations of the condominium association. It's also a good idea to review the minutes of six to 12 months of board meetings to understand the current issues that are being discussed. Look over the financial documents such as the budget, reserve study and any assessments and find out how many of the units are non-owner occupied.
This may affect your ability to get a loan. Finally, you'll want to know if the association is involved in any litigation.
The seller, real estate agent or escrow company will order these documents from the management company for you to examine and approve.
According to experts, Condominium documents are long and complex, and buyers often complain that they don't understand them. If you can't make sense of the documents, contact a homeowner association board member for an explanation. Or, hire a real estate attorney who is knowledgeable in condominiums to review the documentation and give you an outline of the important points.
Maintenance of the condominium complex is shared with the other owners. Keep in mind that when you buy a condominium, you become a member of the homeowners' association. You pay a monthly fee, which covers management of the association, hazard insurance and routine maintenance. A portion of your fee goes into a reserve account for future maintenance and replacement of the improvements. Sometimes utilities, such as water, garbage and sewer are included in the monthly fee. Exactly what's covered by the homeowner fees varies from complex to complex. The responsibility for maintenance of a single-family house usually lies solely with the owner.
Read and understand the CTC’s and other documents before you buy a condominium. If you're a dog lover and the CTC’s prohibit dogs, you'll want to know this before you buy, not after.
Just as the value of any one house is dependent on property values in the neighborhood, the value of a condominium depends on the condition and desirability of the entire complex. The best way to get information about a condominium complex is the same as in a single-family house neighborhood. Take a walk and talk with the neighbors.
Finally, most realtors favored Condominiums because it is less expensive than single-family houses. Condos usually offer more amenities but it has a higher monthly fees. They added that condo units are a good choice for young professionals, bachelors and even to retirees, who want to be in very accessible location, but do not want to shell out lots of dollars in their pocket.
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