{"id":53171,"date":"2016-09-19T08:35:27","date_gmt":"2016-09-19T15:35:27","guid":{"rendered":"https:\/\/www.redfin.com\/blog\/?p=53171"},"modified":"2021-09-09T15:38:27","modified_gmt":"2021-09-09T22:38:27","slug":"are-condos-harder-to-sell-than-regular-single-family-homes","status":"publish","type":"post","link":"https:\/\/www.redfin.com\/blog\/are-condos-harder-to-sell-than-regular-single-family-homes\/","title":{"rendered":"Are Condos Harder to Sell Than Regular Single-Family Homes?"},"content":{"rendered":"
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Condos are a great choice for buyers who want a low-maintenance home. Many newer complexes offer popular amenities such as on-site gyms, concierge services, picnic and pool areas and covered parking. <\/span>Condo<\/span><\/a> living remains a very popular option for buyers at a variety of price points. Read more about the <\/span>pros and cons of condo living<\/span><\/a>. <\/span><\/p>\n

Some condo owners have concerns when it comes to resale. As <\/span>a real estate agent<\/span><\/a>, I\u2019m often asked if selling a condo is harder than selling a single-family home. So, what\u2019s the deal? \u00a0As with a lot of things, the truth is it depends. <\/span><\/p>\n

First, your condo is only as good as your Homeowners\u2019 Association or HOA. HOAs typically charge each unit a monthly fee for being part of that association, which usually covers maintenance for the exterior and common areas, a master insurance policy for the building, landscaping, trash removal and any other building amenities. The fee may cover monthly utilities such as water and electric, as well. <\/span><\/p>\n

Buyers factor in that monthly fee when deciding what property to buy. It may be harder to sell a condo in a building with a much higher HOA fee than similar buildings in the area. But while a low fee may seem like the best deal for buyers, it\u2019s important that the HOA has enough funds to keep up with the property. \u00a0<\/span><\/p>\n

In addition to maintaining the community, each HOA is responsible for maintaining a savings account, called <\/span>reserves<\/span><\/a> for the building or complex. These reserves are used to cover operating expenses as well as fund special projects, such as repainting, replacing the roof or updating the building\u2019s HVAC system. <\/span><\/p>\n

Why is this important? If your association doesn\u2019t have enough in reserves and a major expense arises, the association has the right to vote on and authorize a <\/span>special assessment.<\/span><\/a> During a special assessment, each condo owner is required to pay a specific amount in order to raise the needed money for that repair. If your HOA does not have sufficient reserves and the complex needs an unexpected, expensive repair, the owners are left holding the bag. If there is a special assessment due when you are selling your condo, the buyer may expect you to pay for it. Or they may decide to move on to another property altogether. <\/span><\/p>\n

When it\u2019s time to sell, the person who is going to purchase your condo will most likely need to get a loan. The buyer\u2019s lender will review the HOA documents and the buyer and lender will look over the association\u2019s financial records, any pending lawsuits and the percentage of owner occupants versus renters. All of these numbers are extremely important. <\/span><\/p>\n

If the lender finds the HOA reserves are insufficient or if there is potential or pending litigation against the HOA, the lender may decline the loan. Some mortgages have <\/span>rental cap<\/span><\/a> requirements, and will not lend in buildings with a large ratio of renters versus owner-occupants. <\/span><\/p>\n

In essence, if your HOA is not in good shape, lenders may choose not to lend on your building. If that is the case, only cash buyers will be able to purchase your property, severely limiting your pool of buyers.<\/span><\/p>\n

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