A First-Time Buyer's Guide to Philadelphia Condos

Buying your first condo in Philadelphia is a different process from buying a single-family home, and knowing where the differences are makes the whole thing far less stressful. Here is what first-time condo buyers in the city tend to run into.

Understand what you own — and what you share

When you buy a condo you own your unit and a share of the building's common elements. That shared ownership is what a condo association manages, and it is funded by your monthly HOA or condo fee. Before you make an offer, read the association's budget, reserve study and meeting minutes so you know how the building is run and whether any large assessments are on the horizon.

Budget for the fee, not just the mortgage

Your monthly cost as a condo owner is the mortgage payment plus the condo fee, plus property taxes and insurance. Ask what the fee covers — some buildings include water, heat or amenities; others cover only the exterior and common areas. A higher fee is not automatically a bad thing if it pays for things you would otherwise maintain yourself.

Know the financing rules before you shop

Lenders look at the building as well as at you. Many conventional loans require the project to meet certain criteria around owner occupancy, the number of units sold, and the financial health of the association. If a building does not meet those criteria it may need a different type of loan, so it is worth running the building past your lender early rather than after you have fallen for a unit.

The paperwork is heavier

Expect to review the condo documents — declaration, bylaws, rules and regulations, and the resale package — in addition to the usual purchase contract. This is where you learn about rental caps, pet rules, short-term rental restrictions and how disputes are handled.

Ask questions before you commit

• How healthy is the reserve fund?
• Have there been special assessments, and are any planned?
• What is the owner-occupancy ratio?
• Are there rental restrictions or waiting lists?
• What do current owners say about living there?

If you are weighing a condo against other options in the city, I am glad to walk through the trade-offs with you.