Buying your first home is not unlike tying your shoe for the first time: a source of great frustration, joy and accomplishment and pretty much a simple rite of passage. When your first home happens to be in a shared living environment, a.k.a. a condominium, there certainly are additional factors that most buyers should take into account to help come to a rational, well-thought-out purchase decision.
1. Condo fees: What amenities are you willing to pay for?
Condo fees are common to all condominium buildings and can pay for a variety of items like swimming pool, staff, elevators, roof repairs, windows, insurance, management and snow removal. The questions many buyers will ask themselves is: What is the level of service they require and what is the level of monthly fees that they are willing to pay?
I know of no doormen who work for free, nor am I familiar with elevators that run on magic pixie dust. You have to pay for common services and the plethora of services vary from building to building. One easy way to think of condo fees is to consider the size of the building. The bigger the building, the higher the condo fees because now we are talking about a variety of amenities that may even extend to parking, a chauffeur, a gym and trash removal. Smaller brownstone/low-rise loft buildings may not offer much in the way of services or amenities, and the condo fees reflect such.
2. Rules and regulations: Are you a good fit for this building?
Most states will allow for a condo-document review period so that potential buyers may further investigate the rule and regulations, the by-laws, the description and layout of the common areas, as well as the unit configurations. This review period is the time where a potential buyer may also learn about the insurance requirements of the condo association, the composite of the board and rental policies as well as the pet policies of the association.
3. Budget: Is the association well-heeled or flat broke?
During the condo-doc review period, many buyers will want to take a closer look at the financial information and operation of that particular condo association. The budget will reflect current expenditures (planned vs. actual), as well as will reveal the financial stability of the condo association. The overall strength and stability of the condo association is often a reflection of how much money it has managed to save over the years. Condo buildings are like hair-dos and automobiles: They need to be maintained and kept up in order to retain the values of the individual units. Roofs do leak after a number of years and a condo association that has put money away for a rainy day is something most buyers look for in the review of the budget.
4. Valuation: What are some of the factors that drive value?
Though many condos may be similar in size within the same building, their pricing may be as different as night and day. There are upgrades that a buyer may want to take into consideration when making an offer on a condominium, and sometimes comparable sales — even within the building — might not tell the whole story. Floor height can greatly affect value, as can the view and layout of a particular condominium. Bed and bath count can affect the sale price as well, but the true driving force of value is usually found in not only the overall size of the condominium, but more importantly the interior condition and the “je ne sais quoi” or overall feeling and impression that the condominium exudes. Many buyers don’t just want to buy the steak — they want the sizzle that accompanies their purchase, and that somewhat-undefinable characteristic does drive value.
Living in a shared environment in an urban area is nothing new and is often a preferred way of life for many, who favor the overall lack of responsibility in maintaining aspects like the yard and the roof, as well as the sense of community and security. The factors to consider when buying a condominium should reflect not only your tastes, but your priorities as well. Not all condominiums are created equally, and the monthly fees differ from building to building. Buying into the association that suits your needs may take a little more homework but, for many, the idea of shared living is the preferred route to take through life.
Mark Wade is a licensed real estate agent with Berkshire Hathaway Home Services in Society Hill and owns and operates www.CenterCityCondos.com.