Must-Ask Questions Before Buying a Condo

The most important condo buying questions cover fees, reserves, owner-occupancy, insurance, and whether the building already has mortgage approval on file. Answering them before you write an offer can help you avoid a financing surprise partway through your purchase.

Condo shoppers usually come to us after they've already found a unit they love. Getting these answers early saves everyone time later.

What Is a Condo, and How Is Ownership Different?

A condo is a home where you own the interior of your unit, but the building's exterior, land, and common areas are owned collectively with other residents. A condo association manages those shared spaces and charges owners a monthly fee to maintain them.

Condos come in a lot of shapes, from high-rise towers to townhouse-style units to small buildings with just a handful of homes. What makes something a condo isn't the architecture, it's the ownership structure underneath it.

What Condo Buying Questions Should I Ask About Fees?

Almost every condo charges a monthly fee, and it's rare to find one that doesn't. Ask what the fee covers, how often it's gone up in recent years, and whether a special assessment is being discussed. How HOA fees affect your monthly budget is worth a look if you're comparing a condo against other home types.

• What does the fee currently cover (water, trash, landscaping, amenities)?

• Has the fee increased in the last two or three years, and by how much?

• Is a special assessment being planned or already in place?

What Condo Buying Questions Should I Ask About Reserves?

A condo association's reserve fund pays for big-ticket repairs like a new roof or repaved parking lot. A low reserve fund can mean owners get hit with a large surprise bill when something needs replacing.

Ask to see the association's most recent reserve study and current reserve balance. A healthy reserve fund usually covers several years of anticipated big-ticket expenses, though there's no single number that works for every building. If there's a large gap between what's recommended and what's actually saved, ask how the association plans to close it, whether through a fee increase or a special assessment.

What Condo Buying Questions Should I Ask About Owner-Occupancy?

Certain loan programs limit how many units in a building can be rented out instead of owner-occupied. A building with too many renters can lose eligibility for some loan types, even if your own finances are strong.

Ask your real estate agent or the association's management company what percentage of units are owner-occupied versus rented. These ratios matter because the rules behind them get updated by Fannie Mae and Freddie Mac from time to time.

What Condo Buying Questions Should I Ask About Rules and Restrictions?

Condo associations set rules for things a single-family homeowner wouldn't have to think about, like paint colors, parking spots, and whether you can rent your unit out short-term. These rules usually live in the association's bylaws and covenants.

Ask for a copy of the rules before you make an offer, especially if you plan to work from home, own pets, or eventually rent the unit out.

• Are short-term or long-term rentals allowed, and is there a waiting period for new owners?

• Are there restrictions on pet breed, size, or number?

• Do renovations need association approval, and what does that process look like?

What Condo Buying Questions Should I Ask About Insurance?

The condo association carries a master insurance policy that covers the building's structure and common areas. As the unit owner, you're typically responsible for your own policy, called an HO-6, which covers the interior of your unit and your personal belongings.

Ask what the master policy covers and what it doesn't, since gaps between the two policies are where owners get caught off guard after a claim. Your insurance agent or Mortgage Banker can help you figure out how much HO-6 coverage makes sense for your unit.

How Do I Find Out If a Condo Is Already Mortgage-Approved?

Ask your real estate agent if the building has already gone through condo approval with a lender. If it has, your loan can often move faster since much of the paperwork is already on file.

If the building hasn't been reviewed yet, our team can walk you through how condo mortgage approval works and help request the paperwork from the association's management company.

Ready to Start Shopping for a Condo?

If you've found a building you like, I can check its approval status and walk you through what your loan options look like.

See what you might prequalify for!