Austin’s downtown is dynamic, transforming in recent years from a place to work and play to a place to live, work, and play.
Like many folks attracted to the downtown area, you may be considering purchasing a condo instead of a single-family home. Makes sense. Many condo communities offer stunning city views, luxurious amenities and are located within close proximity to Austin’s best attractions. Who wouldn’t want to easy access to the city from their front door?
But in some ways buying a condo differs from the purchase of a single-family home. The most obvious difference is ownership rights. With a house you own the land. With a condominium you own the air space and a pro-rated interest in the common areas.
In truth, some aspects of buying a condo are easier than purchasing a house, while others can be more of a challenge. That said, with a little preparation and willingness to be flexible, you can get the condo of your dreams.
Financing the Dream
The first steps of buying a condo are the relatively same as purchasing a home. First, put your budget together and get pre-approved for financing. Pre-approval removes any uncertainty about your ability to perform as a qualified buyer, strengthening your negotiating leverage with the seller.
The next step with the financing is all about the property itself. When you find the condo of your dreams, make sure the property is warrantable — meaning federal mortgage backers Fannie Mae and Freddie Mac allow mortgages there.
A condo is considered warrantable if:
- No single entity owns more than 10 percent of the units.
- At least 51 percent of the condos are owner-occupied
- Fewer than 15 percent of the condos are in arrears with their association dues.
- There is no litigation involving the HOA.
- Commercial space makes up less than 25 percent of the total square footage
Find an Agent You Can Trust
Next, find an agent who knows the market and fits your home buying style. Talk to a few agents to get a feel for how they communicate and how they will meet your needs. Ask your friends and family for a referral to an agent who they enjoyed working with.
I recommend going on a couple of showings with the agent. If it feels like a good fit, sign a buyer rep agreement. The agreement assures the agent that you are not working with another agent on the side, in return you receive a higher-level of service. If it doesn’t work out, you should be able to cancel the agreement.
The Condo Search
Austin has a lot of great condominium options, but I suggest that you narrow your choices down before you visit any properties by deciding:
- View – be sure to find out it will remain unobstructed forever?
- Price range
- Area of town
Obviously, the location will play a crucial role in your buying decision. It’s not just about a great neighborhood, it’s about the lifestyle and amenities nearby. Condos can put you close to the action and in Austin, that means close to great entertainment venues, scenic parks and restaurants. Be sure to consider the condo’s “Walk Score” when you are comparing properties.
Amenities are also important considerations. With single-family homes, what you see is what you get. Condos, however, have perks that make living there feel like a luxurious resort. A few of the most popular amenities include a pool with extended lounge decks, movie theater, coffee bar, concierge, fitness center, game room, gardens and conference rooms.
A Note on HOAs
You’ve secured the financing for a payment within your budget. You’ve made a wish list, viewed properties and found a great unit. Now is the time for due diligence with a check on HOA fees and conditions. These fees vary and could include utilities such as electricity, trash, water or cable.
HOAs can be restrictive. Make sure the bylaws don’t prohibit something you plan to do – like have a certain size pet, or the ability to sub-lease for three months while you travel. Be sure to check out the Covenants, Conditions, and Restrictions (CC&R) document. Some associations have a few rules while others have long lists of requirements and restrictions.
Write the Offer
Congratulations, you’ve found a great agent, found a condo you love, secured financing, read all of the small print and are almost ready to make an offer. Two addition details that are negotiable are an HOA transfer fee and HOA contribution towards working capital. Be sure to factor those in when writing the offer.
So as you can see, buying a condo has its fair share of differences, as well as similarities to buying a house. Whichever you choose, the result should be the same. You enjoy living in a home that you will love for years to come!