How to Buy a Condo Conversion

Condominiums are often converted apartments.

Condominium conversions, on the surface, look similar to many surrounding properties. In reality, they are often apartments converted into condominiums, and as such, they may not fall under the same construction laws that condominiums do. Some also may have older or outdated interior systems. Take precautions in purchasing these units, and practice due diligence upfront to feel confident that your condominium conversion is a sound purchase.

Instructions

1. Obtain pre-approval for a mortgage. Sellers of condominiums, as well as other property types, will likely require that you show proof of ability to purchase the property with your offer. Additionally, this will help you understand upfront how much you can afford. A local mortgage broker or a bank you already work with can help you through this process.

2. Contact a local real estate agent licensed in your state who is familiar with condominium conversions in your area and the potential pitfalls related to them. Interview your agent thoroughly about their experience with conversions, and obtain personal referrals.

3. Ask for a copy of the condominium or co-op bylaws prior to purchase, and ask the seller about condominium fees. Condominium association fees can be very high; it is not uncommon to see condominium fees that are a few hundred dollars a month or more.

4. Ask your real estate agent for comparables on the condominium. Comparables show you what your potential purchase looks like against condominiums that have recently sold in the area. Especially in volatile markets where change is frequent and the market has dipped or risen dramatically, ensure you have short-term comparables. Condominiums that sold six months ago, for example, will no longer be valid comparables in these markets.

5. Write up your offer with the assistance of your agent. Once your offer is submitted, the seller will likely counter your initial offer. For many buyers, it is easy to become emotional during this process and end up overpaying for a property you love, or walking away because you are frustrated with a seller. Try to stay objective, and rely on your agent to help you through the negotiation process.

6. Arrive at a price agreement and go under contract for the property. From here, your real estate agent will help you enlist the assistance of property inspectors and title companies to ensure a smooth closing process.

Tips & Warnings

• Be very thorough in selecting your agent. You are not obligated to hire an agent because you interview them. Ideally, choose an agent through a personal referral.

• Unless you are an experienced buyer with a few purchases under your belt, and you are familiar with the laws of your state, do not attempt this process alone.

References

• "Homebuying for Dummies"; Eric Tyson and Ray Brown; 2001

Resources

• Department of Housing and Urban Development: Interview with Real Estate Brokers