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Buying A Condo: What You Need To Know

Sarah Li Cain6-minute read
February 02, 2022

Buying a condo is a great first step into homeownership if you’re intimidated by a larger house or a smart choice if you’re looking to downsize. Before you dive into a purchase, it’s important to understand how buying a condo is different compared to purchasing a single-family home.

Here’s what you need to know about buying a condo.

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What Is A Condo?

Also known as condominiums, condos are a type of housing or a residential complex with separate units – each unit is owned by an individual, or homeowner. The owner is responsible for their unit, including maintenance and repairs.

Condos typically have common areas like shared outdoor space or hallways that the condo association is responsible for. Other areas include the complex exterior and building amenities such as a pool or gym. To maintain and upkeep these areas, condo owners pay recurring fees to the condo association.

Unlike the owner of a single-family home, who owns the house inside and out, as well as the property it sits on, a condo buyer only owns the interior of their unit and, as a member of the condo association, a prorated portion of the common areas and underlying property.

Condos come in all shapes and sizes — regional differences might conjure different images, as would urban versus suburban living.

Why Consider Owning A Condo?

When you’re considering owning a condo, it’s important to assess the lifestyle you currently have and whether you would enjoy living in one. There are benefits and drawbacks to this living situation — it’s up to you to decide if the pros outweigh the cons.

For instance, you’ll be in close proximity to your neighbors. It might not be a big deal if you’re used to being in an urban area, but a potential negative if you prefer quiet spaces.

Take a look at some of the factors below to determine whether you should consider owning a condo.

Minimal Maintenance

One of the major benefits of condo ownership is that it’s more low maintenance than owning a single-family home. Condo units can be smaller than single-family homes, and you’re only responsible for the maintenance of your individual unit. In general, exteriors and common areas are the domain of the condo association. In contrast, co-operative ownership, or “co-ops,” require association approval even for interior renovations.

Abundant Amenities

Many condos offer the use of amenities such as a pool, gym, or private spaces to celebrate events. It’s great for those who may not be able to afford these amenities otherwise or won’t have access to them in close proximity.

Lower Cost

Condos typically cost less compared to single-family homes, though it depends on the size and location. These lower costs make it more affordable for those looking to become a homeowner or want to reduce their expenses in general.

What Is A Condo Association?

 A condominium association is a legal organization where a group of condo owners from the same complex work together to ensure the property is maintained, and retains its property value. The condo owners elect a board of directors who will oversee the day-to-day operations of the association and enforce the community’s covenants, conditions and restrictions (CC&Rs).

In many cases, the board of directors are volunteers who won’t be compensated for managing the association. Instead, they’ll usually defer to hiring a professional management company to help with the responsibilities associated with managing the entire association. This can include collecting annual dues, negotiating contracts, coordinating maintenance and repairs for the board to approve.

Being a member of a condo association is mandatory as a condo owner — it’s usually a condition upon purchasing a unit. Homeowners are required to pay the dues and abide by the community’s CC&Rs.

Joining A Condo Association: What You Need To Consider

The biggest differences between condo and single-family home ownership are what buyers own, and that they become members of the condo association, which comes with a unique set of responsibilities.

Here’s what you need to consider when joining a condo association.

Condo Association Agreement

It’s important for prospective buyers to carefully read the documents that establish the condo association and its mission and responsibilities. Your condo association agreement will outline who the board is, most likely who the property management company is, and their responsibilities. It will typically also outline the community's CC&Rs and other rules condo owners need to follow.

Condo Association Rules

Condo owners must follow condo association rules, especially those regarding payment of fees. Non-payment of fees can lead to a lien being filed against the condo’s title, which would make it difficult for the owner to sell or refinance the mortgage.

Aside from fees, condo rules may include other conditions such as whether owners can rent the property out on either a long- or short-term basis, and whether owners can have pets. Like non-payment of fees, violating condo association rules, can lead to fines — and those fines can turn into liens.

Condo Association Financials

A condo association’s budget is made up of condo association fees, so it’s important to understand whether the condo association is financially stable. For instance, the size of the condo’s reserve fund helps you to determine whether the association has enough funds to pay for emergency repairs or to do routine maintenance on the property. If the condo association has a reputation for not handling finances well, it’s a sign you may want to consider living elsewhere.

You’ll also want to skim a year’s worth of condo association meeting minutes to see if there are any major maintenance issues – and costly special assessments – that new owners might be forced to pay.

Condo Property Conditions

Condos can come in all shapes and sizes and every property has its unique challenges. As you're touring prospective condos, ask questions about the condition of the common areas and whether any major maintenance or repair is needed.

For example, a swimming pool can be a major attraction but also a major expense, especially if it needs significant repairs.

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How To Buy A Condo

The process to purchase a condo is similar to buying a single-family home. You’ll most likely have to tour multiple properties to find one you’ll want to live in. That being said, there are some differences, such as the fact that condominium properties have an on-site sales office.

Here are the general steps on how to buy a condo.

Get Preapproved

Getting a mortgage preapproval before you begin looking at condo properties is important, especially in a seller’s market. That’s because it shows sellers you’re serious about buying and you have the means to do so.

When applying for a preapproval, you’ll want to take some steps, including:

Don’t apply for preapproval until you’re serious about buying a condo since preapprovals tend to expire within a month or two.

Work With A Real Estate Agent

Finding and working with a trusted real estate agent is important because this person is meant to work on your behalf. Having someone who is experienced will help you when it comes to recommending properties, guiding you on what to look for (like in a condo association) and walking you through all the paperwork needed during the closing process.

Make An Offer

When it comes to making an offer, you’ll want to be sure the home is for you, and that you’ve thought it out. Your real estate agent should be able to help you through this process. If you’re buying in a competitive market, you’ll want to make sure your offer is aggressive and has the highest chance of outbidding other potential buyers. 

Negotiate A Purchase Agreement

Once the condo owner accepts your offer, it’s time to ensure everyone agrees on the purchase agreement. This is a legal document outlining the condo purchase, such as the price and when the expected closing date will be. There will also be contingencies, which are clauses stating that certain events need to happen or the buyer can back away from the sale. You’ll also decide on the amount of earnest money involved, which is money deposited into an escrow account showing you’re serious about buying the condo.

Do Your Due Diligence

As we’ve discussed, there are different concerns when buying a condo versus a single-family home. It’s important to understand the role of the condo association of the property, the condition of the unit and the property as a whole.


Before you close on the home, you’ll receive a closing disclosure outlining the conditions of your mortgage including the interest rate, closing fees, and other items of importance. Take the time to review it and ask questions prior to closing.

The Bottom Line: Understand Your Rights And Responsibilities As A Condo Owner Before Buying

It’s important to understand, beyond the many attractions of condo living, that ownership still means you’re responsible for the maintenance and repair of common areas. It can be a great choice for those looking to downsize or prefer to own their own home that doesn’t involve the type of maintenance a single-family home would.

Ready to buy your condo? Apply online today.

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Sarah Li Cain

Sarah Li Cain is a freelance personal finance, credit and real estate writer who works with Fintech startups and Fortune 500 financial services companies to educate consumers through her writing. She’s also a candidate for the Accredited Financial Counselor designation and the host of Beyond The Dollar, where she and her guests have deep and honest conversations on how money affects our well-being.