4 things to consider when shopping for a condo in Seattle

There are many reasons someone might want to look into purchasing a condominium instead of a single-family home. The two reason cited the most are lifestyle and price. Regardless of why someone might want to look into owning a condo, there are a few items to consider.

Buying costs

Because condominiums can be less expensive than single-family houses within the same area, they are frequently an ideal first real estate purchase. As part of the typical buying process, getting a pre-approval letter from your mortgage company before starting is recommended. Getting a pre-approval allows you to determine several critical items. At the top of the list is the total mortgage you can afford, the necessary down payment, and the total monthly housing costs that fit your financial situation. The mortgage you qualify for is relatively straight forward. Add to this the amount of your total down payment, approximately 2% towards closing costs, and you have a price range of your future home.

If you apply for a conventional loan with 20% down, you may not have any condo specific challenges. However, if you are taking advantage of an FHA loan with 3.5% down, you will need to make sure that the condominiums you are investigating are FHA approved.

Maintenance fees

The second close area of consideration is the monthly maintenance or Home Owner’s Association (HOA) fees. These can run in the hundreds of dollars monthly depending on the building, which will dramatically impact your debt-to-income ratio. Once you have completed your financial calculations, you are ready to begin the search.

Rules

As you start your search, there are a few questions to consider. At the top of the list are renting rules. Are there any specific limitations to either long term and short term (i.e., Airbnb) renting? Perhaps you plan to live in this condominium for a few years and then rent it out long-term while purchasing a new, larger home.

In many buildings, pets are not allowed, or there are size limits. Do you have a dog or cat? Do you want one? Knowing about these limits before you tour a listing is far better than falling in love with a place and making a purchasing decision you may regret later.

In Seattle, some older condominiums have specific rules about the type of flooring you are allowed to install. There may be a carpeting requirement in all living areas in these buildings to keep noise levels down. Are you okay with this?

The building

After finding a condominium you like and plan to make an offer to buy, the last area of careful consideration has to do with the building itself and the HOA.

Some of the items you should ask for are the resale certificate, the reserve study, the state of the reserves, and is the building managed by a professional company. All of these work together to give you a clear picture of the building’s overall condition. Does the building or development have an active HOA made up of owners, and do they have adequate funds to maintain the structure and common areas properly? While there is a reference to this in the purchase and sales agreement, it is better to know this upfront. As with all real estate purchases, a qualified broker should help guide you through these questions and the process.

While this list is not all-inclusive, it is a simple place to start. As each property is different, so will the list of questions. Condominium life itself can be fantastic. There is no grass to mow; frequently, you will have a nice view, and locations are typically within walking distance of several restaurants, stores, and coffee shops. If you want to park your car for the weekend and live on foot, this might be the best decision you can make.