Q: How is buying a condo different from buying a house?

A: Like a house, real estate taxes are assessed on each unit. Personal expenses for home maintenance and insurance (HO-6 policy) is limited to the inside of the unit.

The Association organizes the management of the complex and when you buy a condo, you are agreeing to abide by the association regulations.

There is usually a one time fee to join the association which is paid at closing. There is always a monthly fee to cover costs of property maintenance and upkeep, common area insurance and taxes, reserves and related community expenses which are shared by all the homeowners. “Reserves” are funds set aside for major projects such as roofs, parking lot resurfacing, equipment replacement, etc.

If you will be getting a FHA mortgage, the condominium must be FHA approved. The standards are based on percentage of owner-occupants and condo fee delinquency rates. The condo list is now being updated conform with new FHA guidelines. Call me, or your lender to make sure the condo you select is FHA approved.

The association fee will be figured into your monthly mortgage calculation as an expense, probably reducing what you could afford for a single family home.

Other questions you may want to ask is if there are any pending litigations against the association. Legal disputes between owners or the association and outsiders can signal trouble and a poorly run organization. It would also be good to know exactly what the master insurance policy plan covers. Condominiums with over 20 units should also have fidelity insurance to protect against embezzlement.