Condo vs. Home Ownership? Which is best for you?

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Real Estate

Judith Sutton ABR CRS IDS PMN ASP IAHSP SRES GREEN   908 803-0472






By Invited Guest Contributor: Craig Wales,GRA 


Now is a difficult time to be a first-time homebuyer. For those who are ready to stop renting and own their own home, they have found that there aren’t a lot of homes for sale. This situation has been exacerbated by the pandemic and the historically low mortgage rates of the last year or so. Reduced inventory has led to high-stakes competition, driving home prices up and pricing many shoppers out of the market.

With this difficult housing inventory situation, many frustrated would-be homebuyers have decided to step out of the market. Starter-homes are going for McMansion prices in many areas across the country. But there is one type of home that is not quite experiencing the same crazy situation—the condominium. 


A condo is a privately-owned residence that is part of a larger complex of homes. Condo owners are members of an association, and often must pay condo association or homeowner association (HOA) fees. Condos allow you to enjoy the benefits of home ownership without the higher cost and added hassle of owning a house. Owners usually have access to condo-specific perks like general exterior maintenance and shared communal areas and amenities.

If you have gotten tired of being outpaced, outbid or just tired of being out there looking, a condo might be the solution for you. But before you start shopping for a condo you should understand how buying and owning one can be different than buying a house. Most people understand what it takes to buy a house and may not realize that some aspects of the process can be different when buying a condo. Don’t be surprised by these 12 things when buying a condo:

1. You are also shopping for neighbors

A condominium is part of a community. You and your neighbors pool resources to create the shared amenities and pay for the upkeep of the property. Not only that, but in general you live in close proximity with each other, either in a single building or in a collection of buildings. You will be seeing a lot of each other.

A condo association takes that community one step further, by placing your fellow condo owners on committees and doling out responsibilities. I will get more into the association below, but needless to say, you’re going to be spending a lot of time living and working together with your neighbors. 

That is why you will want to try and get a sense of who will become your neighbors.  Perhaps you can make a connection with someone who lives there then take them out for a coffee and get the inside scoop. Don’t be afraid to ask/look  online, if possible.

2. Budget for your HOA

Condo or homeowner associations stipulate that every member of the community pay a certain amount each month to pay for the upkeep of shared spaces. That’s not just the amenities of the condo community, but also trash and snow removal, security, driveways, association pool, pest control and some associations will pay for utilities.

Depending on the amenities and upkeep needed for these spaces, the price per member per month could range anywhere from $100 to thousands of dollars at the highest-end luxury condo. The national average for HOA fees is between $200 and $300.* 

So, when you are calculating your monthly mortgage expenses, you’ll also have to add in the monthly HOA fee that you’ll be expected to pay. It’s easy to find out what the fees are, they should be disclosed on the home’s listing. Then you can compare these fees to what it would cost you for the same services if you were to pay for them by yourself. For instance, hiring a landscaper to care for your yard and garden at a house will likely cost more than your monthly HOA fee.

3. Consider amenities

Part of the allure of owning a condo is that you could also be getting access to a pool, tennis courts, a workout room or even a co-working space and conference room. (Although this is less the case.). These facilities are paid for by your HOA fees, and some can be high, so check it out!

Some of the more common amenities you may find include landscaped outdoor patios, doorman, playgrounds for the kids, dog runs and game rooms. Sometimes you may even be offered a common kitchen, for large party entertainment.

Keep in mind that the price of maintaining these fun amenities is wrapped into your HOA fees, so you will be paying for them if you use them or not. That is why it’s a good idea to focus on condo communities that include extras that you’ll actually use, so you’re not wasting your money on something you may not make use of.

4. Complex decisions

Condo complexes can come in all shapes and sizes. Some consist of one large building like an apartment building. Others can be part of a larger complex featuring a series of buildings with four to eight units in each building. These are often built around a central amenity like a pool.

Some condos can be built like rowhouses or townhomes, where each unit has a street-facing entrance. Still other condo complexes may feature a neighborhood of buildings that look like houses but feature two or more units in each building. (Basking Ridge and Bridgewater have many of this type.)

The way the complex is laid out can have a huge impact on how people live in the community. Some layouts encourage social interaction in shared spaces. Other layouts may offer you more privacy.

Another aspect of the complex to consider is the association’s rules about subletting and short-term rentals. It’s possible that you may live next to a unit that is rented out to someone new every year or even every weekend. It’s also possible that you may want to rent your unit out yourself someday and make a little extra money. These are all things to take into consideration when looking at condos and checking out the bylaws.


5. Consider the association 

Everyone who owns a condo will have to deal with a condo association in some way. The association is usually made of other unit owners—your neighbors—and you work together to take care of the complex. A well-run association can make the condo living experience great, but a poorly run one can be a real headache. 

Before you buy a condo, and by extension join the association, here are a few things to look at to make sure things are running smoothly:


Ask the association to see their budget to get a good idea of what your HOA fees are paying for. Will you have to pay for utilities like water, gas, and electricity? What parts of the property will it be your responsibility to care for? And how much money is being held in reserve, should an unexpected expense for the association pop up?

Also, make sure that the association is using the money well and not running a deficit.

Last assessment, next assessment

An assessment is an additional fee that members of the association must pay for larger projects considered outside of typical maintenance. An assessment could be levied for something like a new roof, exterior painting, or new heating system—the types of big expenses that come along due to normal wear and tear on the building. Or it could be something that comes up suddenly.

Ask when the association last called for a special assessment and if there plans to call for one in the future. These assessments can be very pricy, and you will want to know how often they could come up.

Ask to see the minutes from meetings

It is common for a group of people in a community to disagree from time to time and depending on that group of people those disagreements can be friendly or contentious. No one wants to pay a lot of money to buy a condo, only to find themselves in the middle of a hornet’s nest when they attend their first association meeting. 

How to cope with this? Have your agent request the association’s meeting minutes for the last six months or so. You will be able to pick up on any ongoing issues that they face and get an idea how well the group works together to find solutions and make decisions. 


6. Getting preapproved takes more documentation

Don’t forget:  The lending process for a condo may be different. It’s best to connect with a loan officer who has experience closing loans for condos. I can guide you here with our on-board loan affiliation with GUARANTEED RATE AFFINITY.

Your loan officer may ask for some additional documentation about the specific condo complex, before you can get your preapproval, information that you obviously would not get asked for if you were buying a home. 

7. More for your lender to look at

When buying a house, a lender will look at your finances and the value of the home in making his or her decision whether to offer you a loan. Your loan officer may ask to see more information about the condo association when making their decision. This could include if the association has been named in any lawsuits, the percentage of the units in the complex that are owner-occupied and what insurance the complex has. 

In addition, your loan officer may also consider the condition and value of the condo complex and the financial stability of the condo association. This can sometimes lead to a mortgage rate that is a little higher than a single-family home. This rate prices in the risk of community-living, where there are some things that are out of your control.

8. Rules and regulations

When you go from being a renter to an owner, it is fun to think of all the things that you can do in your home without worrying about what a landlord may say. But if you are going to own a condo, you may have to think about what the rules are.

The condo association generally has their own set of rules and regulations that limit what you can do in and around your condo. Some common restrictions include:


Defining what is considered “common areas” and determining the use and maintenance of these spaces
Limiting noise and nuisances inside your unit and in common areas
Deciding what pets and animals are allowed in the complex
Issuing parking rules and limitations
Maintaining the building, including limiting what changes an owner can make to his or her unit

Make sure you ask for a copy of the association’s rules and regulations before you put an offer in on the condo. You may find out that some of the rules will severely limit your ability to enjoy your own home.

9. Cheaper insurance 

Condo insurance is generally less expensive than homeowner’s insurance. That is because it works in tandem with the insurance policy that the condo association takes out on the buildings and common areas. Condo insurance typically covers the property inside your unit, like your personal belongings, whereas homeowner’s insurance covers personal belongings, plus the building and property. That difference can translate to a lot of savings. 

10. Less work for you

Perhaps one of the most well-known perks of owning a condo is that there is no lawn to mow, no gutters to clean and no leaves to rake. In general, those responsibilities fall to the condo association, which may hire out a landscaping service that maintains the property.

Keep in mind that this is not a free perk. This maintenance makes up a major part of the HOA fees you pay each month. It would still likely be less than what you pay for these services if you owned your home, and one way to think about it is that you’re paying to have weekends free of yard work for as long as you live there.

11. Resale issues

If your condo is going to be your first home, it is likely that eventually you will sell it and move on to something larger with more room. It is smart to start thinking about what it will be like to put your condo back on the market after you have lived there for a few years. 

The financing can be more difficult for a condo, and since a lender will be looking at the condo association, it is important that it’s well-managed, as I indicated above.  As a member of the association, you will be able to help make sure it is!

Perception of the complex can be as important as curb appeal when you put your condo on the, market.  A complex with several units for sale could be seen as a red flag for potential buyers, so you may want to plan when you put your condo on the market accordingly, connecting with your trusted advisor; your Realtor®.

12. Condos are cheaper

The housing market has always been dominated by buyers looking for a house to call home. And that has kept the price of condos down, lowering the entry point for first-time homebuyers.  

But, that may not last for long. Condo sale prices are rebounding, partially due to the lack of single-family homes for sale.

Whether you live in a single-family home in the middle of a field or in a penthouse at the top of a condo building, home is where you make it.  Despite the differences you may find when purchasing a condo, that does not change the benefits of being a homeowner. And once you move in and start filling it with your memories, that will be the greatest benefit of owning a condo, of all. Connect with your trusted real estate advisor who has your best interests (and pocketbook) at top of mind.  Call me for any further questions you may have!

 Judy- 908 803 0472 cell

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