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7 tips for buying a condo in 2023

Condos can be convenient, but there are some factors to consider

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Condo living is hardly a new housing concept, but the demand for condos is on the rise. Whether you want the convenience of downtown living, a low-maintenance lifestyle or simply a smaller space for affordability, condos offer a unique take on homeownership.

But the process of buying a condo looks different from that for a single-family home. You’re entering into an agreement for a property run by a management company and condo association. This means you have additional considerations when selecting the right condo for your lifestyle, and there are certain areas you should pay special attention to.

Key insights

  • Before condo shopping, decide what’s most important to you, such as location, amenities, price and square footage.
  • Work with a real estate professional who specializes in condo sales and can help you navigate condo association and property management questions.
  • Research is key. Research the developer, property management company and any special financial requirements from your mortgage lender.

Know your priorities and preferences

Making a list of your must-haves before you start your search can help as you look at various units. Work with a real estate agent who specializes in condo living to find properties that meet your criteria.

Some items to consider include:

  • Location: Do you want to be close to your workplace or public transportation? Is there a particular school district you prefer?
  • Price: It's helpful to get preapproval from a lender so you know what loan amount you qualify for. You should also look at your budget and take into account utilities, insurance, homeowners association (HOA) fees and other expenses.
  • Living space: How many bedrooms and bathrooms do you want? Is there a specific layout you like?
  • Building amenities: Consider what’s most important to you, such as security, a gym, a pool or other on-site facilities. Perhaps it’s more common areas or outdoor living spaces. Don’t think only of amenities you prefer, but also ones that could increase resale value.

It’s also important to understand your motivation for purchasing a condo. Is it so you can be close to your job, enjoy less maintenance and yard work or because it’s less expensive?

“Condos will often be a great option in these cases as they tend to be an easier barrier of entry due to the more affordable property price and other expenses, such as homeowners insurance and property taxes,” explained Abby Waltz, the national director for Homes for Heroes, which helps first responders and others save on home purchases, sales and refinances.

» MORE: Buying a condo vs. a house

Work with an agent who knows condos

As mentioned above, working with a real estate agent specializing in condo living is essential as you start your search. The condo market differs from that for single-family housing since you only own what’s inside the unit’s four walls.

There are also restrictions on renovations and remodeling, as well as complexities involved with homeowners association boards, such as applying for approval to move in or undergoing an in-depth screening process. A real estate agent focused on condo sales will know how to help you navigate the details.

To find a real estate agent specializing in condo sales, start by asking for recommendations from your friends or family members who have moved into a condo recently. From there, you can search online or ask for recommendations from local groups you’re familiar with.

Another option is to look at condo listings in your target area and see what real estate agent names you see pop up regularly — chances are they’re already familiar with your preferred neighborhood.

Research the developer and property manager

Researching both the condo’s developer and property management company is crucial. Ask your real estate agent or a knowledgeable real estate attorney about the developer’s reputation and track record, especially if the condo is a new build.

If it’s an established building, gather information about the property manager’s reputation. When you’re touring the property, ask specific questions about who is in charge of handling maintenance requests and enforcing community rules. You can also find out what other properties the management company is in charge of or ask a board member if they’re satisfied with the property management’s services and operations.

Review the condo association’s rules

Every condo association has its own rules and regulations for everything — ranging from pets and noise, to renting out your condo, to maintenance requests. Request a copy of the rules to see if you’re comfortable with them.

In addition, ask the condo association how it handles complaints. Is someone with property management available on the weekends or only Monday through Friday? This will help you evaluate if the rules and responsiveness to complaints are a good fit for your lifestyle.

Understand the condo fees

Condo living comes with additional costs you may not have with a single-family home. Of course, the major expense is the mortgage itself, including the principal and interest. However, condos also include multiple fees, and some are separate from your monthly mortgage payment.

Some fees you can expect to pay are:

  • Condo insurance
  • Association dues
  • Property taxes
  • Mortgage insurance (if applicable to your loan)

Condos often include special assessments, which you should factor into your purchase price and living expenses. Special assessments are fees the condo association can charge at any time — typically when there isn’t enough in the annual budget to cover building projects or upcoming expenses. Ask about any special assessments on the horizon so you can budget accordingly.

Ask about the condo association’s finances

When you’re purchasing a condo, it’s wise to evaluate not only your own finances but also the condo association’s. This provides clues as to how well the association maintains the building and amenities. Ask your real estate agent to help you research any pending legal actions or outstanding debts against the condo association.

Check your mortgage eligibility

Before starting your search, you should get preapproved for a loan. This will help you determine your budget and the type of mortgage you might qualify for.

A preapproval is not a final approval for a mortgage, but it can give you an idea of what you can spend. The lender will ask for documents like proof of income and employment, tax information, bank statements and your estimated expenses and debts.

Preapproval is especially important when purchasing a condo. When you use a mortgage to purchase a condo, the lender not only reviews your finances but the condo’s finances, too.

If you're a first-time homebuyer and want to use an FHA loan, the condo must be in a building approved by the FHA. Conventional loans, meanwhile, require a higher down payment and have more stringent credit score requirements.

» MORE: What is a condo mortgage?

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    What credit score do I need to buy a condo?

    It depends on the type of loan you’re using for your condo purchase. Each mortgage product — including conventional loans and FHA, USDA and VA loans — has its own unique set of credit score requirements. For example, VA loans do not have a minimum credit score requirement, but a lender may impose a minimum score for government-backed loans.

    Are condos good for first-time homebuyers?

    This is a personal preference, but first-time homebuyers may appreciate the low-maintenance lifestyle a condo offers. Condo living can sometimes cost less than single-family housing, too, even with HOA or condo association fees.

    Do I need property insurance with a condo?

    You will need to buy insurance for your unit. The association or board usually holds a policy on the building as a whole, which the residents pay for in their condo fees.

    Can I make renovations to my condo?

    You can make renovations to a condo, but you typically have to seek the HOA board’s approval before starting any renovations or remodeling. The renovations are likely limited to inside the four walls of the unit only.

    Bottom line

    Buying a condo is an exciting way to own property that perfectly fits your lifestyle, whether you desire it for its location, low maintenance or because it’s more affordable and packed with amenities.

    However, before heading down the path of condo ownership, research not only the unit itself but also the developer, condo association and property manager so you know whether it’s the best fit for you.

    ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
    1. Redfin, “Condo Prices Jump to Record High as Buyers Seek Relative Affordability.” Accessed June 23, 2023.
    2. U.S. Department of Veterans Affairs, “VA Guaranteed Loan.” Accessed June 22, 2023.
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