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Buying a condo: tips and advice

Updated on May 14, 2014

There are many reasons why you may want to buy a condo.

(By the way, what's the difference between a condo and a townhome? With a townhome, you own the space above and below your property; this is not the case with a condo.)

Condos are often less expensive than single-family homes. You don't have to worry about taking care of a yard, a pool, or other features because the Homeowner Association (HOA) takes care of this for you. Sometimes it's a better deal to buy a condo than to rent an apartment.

Rule of Thumb: You should spend no more than 30% of your monthly income on housing.

On the other hand, it may be best to keep renting rather than making the commitment for a house. The maintenance for utilities, structures, and other components will no longer be covered by the landlord - those costs are on you. The market may not be optimal for buying and you may want to wait for better housing costs or interest rates.

Before you think about buying, you should search for potential properties and estimate how much the monthly costs will be compared to your rent. I use, where you can plug in the numbers and they will show you the monthly costs.

Costs you should consider include:

  • Mortgage: This is the basic monthly amount to pay off the loan you took out from the bank.
  • Property tax: This is what you owe to the County as part of owning a property.
  • Mortgage insurance: You will pay this anytime you cannot put down 20% of the property value at the time of the initial purchase.
  • HOA fees: These are the fees charged by the HOA for the features the complex offers. For instance, this may include a pool, clubhouse, exercise room, and more. They also usually cover basic maintenance on the outside of the property, and sometimes water, sewer, and cable. You should be sure that the HOA fees are worth what the HOA covers because these fees can be excessive at times.
  • Closing costs: These are the costs that the bank (lender) will charge when you initially take out the loan and close on the property. These are usually 2-4% of the property value, so make sure you have this much on hand in addition to the down payment.
  • Insurance: You will need to get homeowner's insurance to cover the inside of your property.

Ask your acquaintances for referrals for a realtor. You want to make sure you find someone who is familiar with the areas you are interested in, and who have experience in the types of properties you want (short sales, bank-owned foreclosures, regular sale, etc.).

What are these types of sales?

  • A regular sale is self-explanatory: it's when the owner wants to simply sell their property.
  • A short sale is the step before foreclosure, where the owner may be delinquent in paying their mortgage or their HOA fees and wants to sell the place to recoup at least some of their losses. You can usually get a great deal on a short sale. Note: short sales can take a long time, from 3-6 months, to close.
  • A foreclosure is where the seller can no longer make payments on the property and the bank has decided to sell it.

Your realtor will start to help you find properties based on your preferences, i.e. location, garage, one-story or more. They can create databases for you online that is updated with new properties that meet your interests. You can check these listings and see which properties you will be interested in seeing with your realtor. Don't look on regular public websites for properties because they are likely already sold or are being sold and when you call for more information, you will be bombarded by a realtor looking for a new client (you!). You may have better luck with properties that are noted as "Transaction Fell Through" because the other buyer may have gotten tired of waiting for the property to close, or they may have found another property, and the seller won't want to waste any more time keeping the property on the market when they expected to make a sale.

Once you find a property you are thinking about buying, apply for a loan with a bank or a local credit union (you can often get great rates with credit unions).

Work with your realtor to make an offer on the property. It can't hurt to have multiple offers on different properties at one time.

There are certain things that must be in order for the condo sale to be successful:

  • Your information must be correct: You will submit information about your income, bank accounts, and other information to be confirmed by the lender.
  • The condo complex must be in good standing: There are certain standards the complex as a whole must meet. For instance, there cannot be too many properties in the complex for sale at one time. You cannot get a loan if more than 15% of the properties are delinquent on their HOA fees. There is a certain percentage of properties that should be occupied by their owners rather than just rented out. Also, there should not be any litigation or lawsuits against the complex!
  • Lender approval: You need approval by your lender, and also the seller's lender or the bank.

Don't get discouraged if you encounter problems during this typically lengthy process. Don't expect for everything to go perfectly and be patient. It will be worth the time and effort to own your own condo!


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    • ithabise profile image

      Michael S. 

      7 years ago from Winston-Salem, NC

      Very informative. I've been thinking about condos lately, so this article is timely.

    • aakashlaghari profile image


      7 years ago

      add me give me advise for this site i dont have knowledge for this site

    • glassvisage profile imageAUTHOR


      7 years ago from Northern California

      Thanks - a co-op is not where you're buying the property, but instead you are buying into the company that owns the property and then you get to live on the property.

    • profile image


      7 years ago

      Plz write about the difference between a condo and a coop. Thx.


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