Selling real estate — whether a condo, single-family home, or other property comes with its own set of challenges. Selling a condo is similar to selling a house; however, there are a few key differences to be aware of.
If you’re wondering how to sell your condo, we’ve got you covered. Before listing your condo, consider these factors to help you prepare for the sale process:
Condos typically have HOA fees and rules you must follow
When selling a condo versus a house, one of the main differences is homeowners association (HOA) fees. HOA fees are a monthly expense for condo owners that homeowners don’t have. HOA fees typically cover the costs of property maintenance, management, and upkeep (landscaping, snow removal, etc.)
HOA fees vary significantly by condo complex and may be higher in cities than suburban areas. Buyers will carefully review the HOA fees and the services covered by their monthly payments. Buyers may ask you if the HOA fees tend to increase annually and by how much. If you live in a complex with unpredictable or drastic annual fee increases, it may harm your sale prospects.
Each HOA will have its own rules and bylaws that may deter potential buyers. For example, the HOA may ban certain dog breeds from living on the property or have strict occupancy limitations. Owning a condo generally provides less flexibility than owning a detached single-family home, and these limitations may turn off some buyers and make selling a condo more challenging.
Market conditions may vary
The pool of condo buyers looks different than buyers of single-family homes. Depending on the market, the number of eligible buyers for a condo may be smaller — though it largely depends on your location and the market. Condos located in or near cities may be easier to sell than those further out.
It’s a good idea to find a real estate listing agent with experience selling condos in your area to help you market your condo, price it strategically, and communicate with prospective buyers.
Condos may more provide more affordability for buyers
Generally speaking, condo buyers value affordability. In many cases, condos are cheaper than single-family homes, making them an attractive option for people with smaller budgets. For this reason, you may receive lowball offers or have buyers with less wiggle room to negotiate — though this will vary by location.
Condo buyers aren’t just looking for affordability but also a particular lifestyle. Some may be looking for luxury — many newer condo complexes offer amenities such as an onsite fitness center, concierge services, pools, and outdoor space. Others may appreciate the convenience and simplicity of being a condo owner. The homeowners association generally covers maintenance and other things people hate doing, such as shoveling snow or landscaping. For these reasons, condos tend to be most popular with busy professionals, singles, couples with no children, and the elderly.
Loan qualification process for condos differs from a single family home
Obtaining a mortgage loan for a condo isn’t as straightforward as a conventional home loan. Lender requirements tend to be more stringent — since a condo is part of a multi-unit building, lenders view this as riskier than a detached single-family home. Additionally, interest rates tend to be higher on condo mortgage loans, which may impact buyer demand.
Though many factors impact one’s ability to be approved for a condo loan, HOA fees play a big role. When determining whether a buyer can afford the payments, lenders evaluate a buyer’s current and future monthly expenses. HOA fees are an extra cost that lenders must consider, and they may push a buyer out of the running for a loan.
When should you sell your condo?
When considering how to sell a condo, one of the most important factors is timing. Generally, condos tend to sell faster than single-family in down markets mainly due to their affordability and convenience. So if the housing market is struggling in your area, don’t let that hold you back.
Another tip is to pay attention to seasonality. Generally speaking, you may have the best luck selling your condo in the springtime (stay away from trying to sell a condo in the winter months, especially around the holidays). Condo values can fluctuate significantly by season in certain areas. For example, if your condo is in a popular tourist area, you may garner the best price if you sell right before the high season.
Do condos have good resale value?
Purchasing a condo may be one of the most significant investments a buyer makes in their lifetime. Therefore, it only makes sense to consider the potential resale value before purchasing.
Historically, house values increase faster than condos due to greater demand for single-family homes over condos. For this reason, condos are best for people who plan on staying put for at least a few years or risk a negative equity situation. However, there are always exceptions. In some cities, condos tend to appreciate faster than houses, such as San Francisco.
Another consideration is that condos tend to have a better return on investment (ROI) in the rental market than standalone homes. So if a buyer is worried about resale value because they plan on moving in a year or two, they may want to consider renting instead. Of course, this depends on your geographic location and the rental market in your area.
Though selling a condo is similar to a conventional home sale, certain factors may complicate a condo sale, such as HOA fees, market conditions, and mortgage requirements. The process also depends on your geographic location and the housing market in your area.
We’ll buy your condo as-is for a fair cash price
If you’re having trouble finding a buyer for your condo, another option is to sell your property to a local real estate cash home buying company. If you live in a low-demand area for condos and want to sell quickly, consider selling to us. We may be able to offer a cash price for your condo and get the closing process underway immediately.