How to Buy a Condo or Co-Op Apartment

Buying a condominium or cooperative apartment is a lot like buying a single-family home, but there are things to consider that are unique to this type of property.

Difficulty: Moderate

Instructions

Things You'll Need:

• Financial Calculator
• Credit Cards And Loans
• Personal Organizers
• Cameras
• Cameras

1. Look at the amenities of the development. Some developments are small while others are almost completely self-contained complexes.

2. Consider the homeowners' association dues.

3. Review the binding rules (known as Covenants, Conditions and Restrictions, or CC&Rs) of the homeowners' association. Make sure they won't affect your lifestyle. (Some places have many limitations, such as not allowing pets outside or parking outside - even in your own driveway.)

4. Review the recent repairs done to the unit you're considering. Will a major repair - such as a new roof - be necessary soon? Does the association have sufficient reserves to pay for the repairs? Speak with the secretary of the association and request a copy of the bookkeeping statements it provides to prospective buyers.

5. Notice the overall condition of the complex. Is it well-maintained?

6. Identify the number of units for sale compared with the overall number of units. At any time, there should only be 4 to 5 percent for sale. Anything higher might indicate an adverse condition.

7. Talk to owners in the complex or building. Often, disgruntled owners are more than happy to tell you what's really going on.

8. Look at the area surrounding the complex or building. Is it already developed, or could some undesirable neighbor, such as a factory or unacceptable business, move in?

9. Be aware of what is covered by homeowners' association insurance and what the association is responsible for, such as roofs, common areas and landscaping.

Tips & Warnings

• Condos and co-op apartments often don't appreciate as quickly as single-family residences and often don't sell as quickly.
• In order to buy into some co-ops, you have to be interviewed and approved by the co-op board.

on 11/22/2005 Having owned and lived in a condo for 15 years, I have two warnings: Check out the condo board and the management company before you buy. They can be dictators, self-serving, and cost you money and grief. Ask lots of other owners and real estate agents.

on 11/22/2005 Ask about any lawsuits against the developer or the association in the past of contemplated in future. In the case of the Co-op, find out about the existing financing. Ask if a Co-op interest can be financed separately as a partial interest.