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There are plenty of perks to owning your own condo. Along with opening up the opportunity for a wise investment, purchasing a condominium also provides the opportunities for close-knit communities and incredible freedom.

See for yourself why condo living is so hard to beat.

What Condo Communities are Like

When you purchase a condo, you are investing not only in an individual unit but also a terrific community.

Condo homeowner associations, in particular, provide residents with a phenomenal opportunity to get to know the neighbors. Every unit owner is an automatic member of this association and therefore is invited to attend regular meetings to discuss community matters and get to know one another.

Community amenities also open the door for residents to cross paths. Many condos feature common spaces, such as fitness centers, pools, and resident lounges, which are open to any unit-owner or renter.

What you Have Control Over in a Condo

Overall, residents have a high level of control over their condo if they are the owners of their unit.

As long as unit owners abide by the rules set in place by their homeowner association, owners tend to have a fair amount of control over their interior unit. This involves the ability for owners to customize their space and manage renovation projects.

The HOA is then responsible for managing the exterior and common elements of the unit, such as hallways and lobbies.

How Condos Provide More Freedom Than Apartments

Apartment residents lease their units from a company or person, which significantly restricts the freedom one has when it comes to what they are allowed to do within their home.

Apartment companies tend to implement stricter regulations, leaving residents with a lot less opportunity for personalization within their units. The company has the final say in most of the renovation and design decisions and often tend to feature more uniform apartment units.

Apartment companies also realize that renters may be less inclined to take care of their units because it is not legally their property. Most buildings will enforce fines or penalties if rules are broken or ignored to encourage residents to maintain their leased units.

Condos, on the other hand, are independently owned, giving unit-owners much more independence. The only rules that condo owners are required to follow are those set in place by the homeowners association through the codes, covenants, and restrictions (CC&Rs), which can be found in the governing documents.

While some of these rules pertain to the interior units, they tend to be less restrictive than those set in place by apartment buildings. Also, since the members of condo HOA’s are the residents themselves, the rules are agreed up and set in place to protect the curb appeal of the community and maintain property value.

Condo living opens the door to great community and freedom! Start your hunt today and become an owner of your own condominium.

If you are looking into whether condos are cheaper than apartments, the answer may not be as simple as yes or no.

To determine which property makes the most sense for you, let’s examine the financial differences between owning a condo and renting an apartment.

Is a Condo or Apartment a Better Financial Choice?

If you are considering purchasing your own condo, expect to pay much higher up-front costs than if you choose to rent an apartment. However, don’t let these expenses scare you away.

When first renting an apartment, residents are often required to cover the first month’s rent along with a security deposit. Purchasing a condo, on the other hand, generally requires a sizeable downpayment. It may also require additional expenses, such as closing costs or lawyer fees.

On top of these up-front costs, condos also require monthly or annual homeowner association (HOA) dues. While HOA membership may increase owners’ out-of-pocket expenses, HOA helps to maintain the community and improve the value of the properties.

Weighing Costs Over the Long Run

When examining the costs of renting an apartment versus owning a condo over the long run, it is evident that a condo purchase is a wiser financial move.

While monthly rental costs are subject to increase over time, a fixed mortgage rate will ensure that your mortgage stays the same over time, regardless of fluctuation in the housing market.

Also, once you pay off your condo, the monthly mortgage costs halt, and the property is officially yours. However, regardless of how long you live in an apartment, those monthly rental costs are perpetual.

Appreciation and tax benefits are two additional incentives to a condo purchase. As a home appreciates, it accrues faster than a stock might because you get the appreciation on the entire home’s value, not just the gain your down payment cash invested. Also, homeowners are allowed to deduct mortgage interest and property taxes when they file tax returns each year.

Which is the Better Investment

If you have the credit or money-up-front to purchase a condo, then you have an opportunity to make a better investment than renting an apartment.

Unlike apartment rental payments, condo mortgage payments and initial costs are going towards a personal investment. So in the long-run, condo owners will have accumulated equity to show for the expenses.

As an apartment renter, when you write that monthly check to your landlord, you are paying for temporary occupancy without any ownership. While renting may make sense for someone who cannot afford to buy or in need of a temporary place to live, it’s not the wisest move for the long-run.

While it may be difficult to answer whether condos are cheaper than apartments, it is clear that condos are a better financial move for those seeking a long-term investment. If you are ready to take the financial plunge and find the perfect condo then contact an experienced broker today!

What is a condo? For starters, a condo is not the same thing as an apartment.

While condos and apartments share similarities, both are unique and suitable for different types of homebuyers.

Overview of Condos

The fundamental difference between condos and apartments comes down to ownership.

First, a condominium, or condo, is a collection of units that are each owned individually. This is similar to homeownership; however, the unit owners live in a shared building as opposed to on their own plot of land. Condo owners may decide to reside in their units or lease them out, making them the landlords of their property.

Condominiums are managed by homeowners associations (HOA). Each unit owner is a member of HOA and is required to pay monthly fees which enable upkeep and services provided to the community. These services may include external maintenance, garbage removal, and the upkeep of amenities, such as a pool or gym.

Homeowners Associations are also responsible for establishing the rules and regulations that residents must abide by through governing documents. These documents are formally known as the Covenants, Codes, and Restrictions (CC&Rs). Before moving forward with a purchase, it is critical that prospective buyers thoroughly examine these CC&Rs to have clear expectations of resident guidelines.

Condos vs. Apartments

While condo units are independently owned, apartment units are all owned by one person or company and located in a single building. The owner of the building often hires a property manager, who is responsible for much of the unit maintenance and management. This means that they will take care of leasing out units, purchasing large appliances, and ensuring the units are up to code.

Apartment tenants pay a monthly rent, without accumulating any equity during their residence. On the contrary, condo owners set themselves up with an investment. The monthly mortgage that they owe on the house obtains ownership over their property and the potential to sell later and profit on their unit.

Many house hunters find themselves drawn to condominiums because of the impressive amenities offered. In general, condos offer a more extensive list of amenities than apartment buildings. Many luxury condos boast valet-service, coffee shops, concierge, spas, and even more. While these services are tempting, keep in mind that they will increase the costs owners and renters end up spending.

Condo Communities

While it is possible to find a sense of community living in both apartments and condos, condo communities tend to promote greater opportunities for neighbors to get connected.

First, condo residents tend to stay put longer than those living in apartments. The lower turnover rate in condo units helps strengthen neighborhood relations.

Additionally, each condo owner’s HOA membership further promotes community. Residents have an easy opportunity to come together to get to know one another and discuss community visions, goals, and guidelines.

Now that you can answer ‘what is a condo?’, you may be better able to answer whether this is the right investment for you. If you are ready to find the perfect condominium, find an experienced broker to help with the process today.

Chicago is a Great Place to Live, Work, and Play

Buying a condo or townhome in Chicago not only gives you access to extensive professional opportunities, exciting nightlife, and a legendary food scene, but it also makes you part of a historic (and ever-growing) community.

From the bars and boutiques of Old Town to the hustle and bustle of The Loop, wherever you decide to call home in Chicago is sure to combine the best of home, office, and entertainment.

So how can you go about buying a condo in Chicago? Sure, it can be a complex process just like buying a single family home, but as with any home purchase, the result is worth it. Let’s review the steps needed to buy a condo in Chicago.

Get Pre-Approved for Financing

You might be tempted to contact an agent right away, but getting pre-approved by a lender can actually save you a lot of time and hassle upfront.

If you’ve already done some research, you might think getting pre-approved is a hassle. However, gathering information early allows your lender to determine the loan amount you qualify for. And once you’re pre-approved, you’ll have a letter that you can use in negotiation with a seller to show that you’re ready and able to purchase the condo.

Here’s a quick overview of the documents you’ll need:

1. Photo ID and Social Security card
2. W-2s for the past two years
3. Tax returns for the past two years
4. Bank/asset statements for the most recent two months
5. Pay stubs for the past 30 days

While additional documents may be required, particularly for self-employed borrowers or if you’ve had any recent credit events, getting this information ready for your lender will save a lot of time.

Make Sure the Condo is Approved

Getting a mortgage for a condo requires that the condo be on an approved list, such as for FHA and VA loans, or for the condo to undergo a review by the lender, such as for conventional loans.

For FHA and VA loans, you can get a head start to determine whether your condo is eligible for that loan type. Search FHA approved condos here, and VA approved condos here.

Condo lists for conventional mortgages aren’t extensive, but that doesn’t mean you can’t buy a condo with a conventional mortgage. Your lender needs to conduct a limited review, which involves sending the condo association some paperwork to fill out. The lender will review it, and if everything looks good, you’ll be all set.

Proceed with Final Steps

Once you’re pre-approved and have signed a purchase contract, you’ll return it to the lender and complete the loan approval process. The lender will verify the information in your application and submit the loan to an underwriter for final review.

If the underwriter requires additional information or explanations, you’ll be informed and should do your best to address these requests (called “conditions”) as quickly as possible so that your loan can proceed. Once conditions are cleared, your loan will be approved, and you’ll have the clear to close.

An escrow account will be set up to transfer funds between you and the seller. Your lender will also set up an escrow account for the distribution of fees like taxes and insurance. Condo association dues likely won’t be paid through an escrow account.

When the time comes to close on your condo, you’ll attend a meeting along with your agent, attorney, title agent, and any seller-side representatives. Be prepared for a long meeting. If you have any questions, let your agent and attorney know. They’re there to help you.

You’ll review your final Closing Disclosure and verify that everything looks accurate. You’ll sign a lot of paperwork and pay closing costs. When the loan funds, you’ll receive your keys to your new Chicago condo.

Ready to find your dream home? Contact our preferred lender today.

With over 350,000 homeowners associations (HOA) in the United States, a large portion of these associations are responsible for managing townhome communities.

If you are in the market for a new townhome that is managed by an HOA, it is crucial to understand exactly how townhome associations operate.

What do Townhome Associations do?

Townhome associations serve the same function as any other homeowners association. Their ultimate mission is to help maintain the quality of life for community residents and protect their property value.

These associations achieve these goals by enforcing regulations and collecting assessments from homeowners, while also taking care of maintenance repairs and upkeep of common areas.

Through the homeowner’s monthly fees, HOA’s fund and provide services that keep the community in good shape.

Common HOA services include lawn maintenance, garbage removal, and building repairs. Luxury communities may also provide more exclusive services such as 24-hour valet and a concierge.

Many HOAs also help manage community amenities, including neighborhood pools, gyms, and clubhouses.

What Rules do they Have?

For homeowner associations to carry out their functions to the best of their ability, they need cooperation from the community members. Townhome association’s expectations of unit owners are laid out as rules in their covenants, conditions, and restrictions (CC&Rs) within the governing documents.

Each townhome association is responsible for creating their own set of CC&Rs upon establishment.

Many common townhome associations rules revolve around financial responsibilities, pet regulations, rental guidelines, and maintenance standards.

Whatever the CC&Rs may be, they are not voluntary. Residents have a legal obligation to follow these HOA rules or they may face fines or legal action.

How they Differ from Condo HOAs

The major difference between townhomes and condos comes down to ownership. Condo owners have title to everything within the unit, while townhome owners have the right to the inside of the unit as well as the land that the unit sits on.

Despite this difference, townhome associations operate very similarly to condo HOAs. Both are responsible for maintaining the common grounds, structures and systems in the community and both rely on funding from unit owners.

Often, townhome owners are responsible for more upkeep than condo owners, which means the HOA is less involved. This lower involvement by HOA frequently results in lower monthly dues for townhome owners.

Since townhome owners own that land that their property sits on, they may be responsible for maintaining the outside. However, frequently HOA will still take care of this area through monthly fees.

Townhome associations help to preserve communities and take some of the burdens off residents.

In the United States, Homeowner Associations spend over 80 million cumulative hours of service annually. So what exactly is all of this time spent doing?

We are here to provide some insight into what homeowners association can do and what their roles are in the communities they manage.

How HOAs Help the Community

Homeowner associations came into existence in the mid 19th century but did not begin picking up traction until the 1960s. Since then, HOAs have increasingly become a common method to manage community developments.

Currently, approximately 23 percent of the U.S. population belongs to a community association.

Ultimately, homeowner associations are in place to help maintain the quality of life for community residents and protect their property value.

Through funding from homeowner’s monthly fees, HOAs help provide services that keep the community in good shape.

Common HOA services include lawn maintenance, garbage removal, and building repairs. Luxury communities may also provide more exclusive services such as 24-hour valet and a concierge.

Many HOAs also help manage community amenities, including neighborhood pools, gyms, and clubhouses.

How they Help Resale Value of Condos

Homeowner Associations help communities beyond day-to-day operations by maintaining and improving resident’s property values.

Research reveals that HOAs have the potential to increase residential property values through neighborhood preservation, restrictive covenants, and enhanced efficiency.

Neighborhood preservation focuses on maintaining curb appeal. The HOA rules and regulations ensure that the community stays in tip-top shape and desirable for potential buyers. The provision of services provided by the HOA, such as garbage removal and community maintenance, as helps to keep the neighborhood in pristine condition.

Restrictive covenants set by the HOA ensure that communities maintain a certain level of quality. These rules may include restrictions and limitations of types of pets owners can have, the number of cars parked in a driveway, and location of satellite dishes.

HOAs enhance community efficiency by creating an organized structure to address a variety of issues in the most effective manner. By addressing multiple issues such as crime, aesthetics, neighborhood behavior monitoring, and professional management,  HOAs are potentially contributing to increased housing prices.

Enforcing Rules and Fees

For homeowner associations to carry out their functions to the best of their ability, they need cooperation from the community members. Rules and fees help accomplish this cooperation.

HOAs enforce fees to help fund their services and amenities they provide to the community. Property owners are required to pay monthly dues as members of the homeowners association.

To ensure accountability, HOA also implements rules in there governing documents that property owners are expected to follow. Otherwise, penalties, such as extra fines or legal action may be taken. Many of these rules enforce timely payments of fees and restrict residents from trashing the outside of their units.

When it comes to understanding what homeowners associations can do, it is essential to know that these organizations are in place to better serve and preserve communities.

While most homeowners aren’t surprised that HOAs come with their own set of rules and regulations, many people still have questions regarding the specifics of these rules.

As members HOA, it is essential that unit owners have a clear understanding of their condo HOA rules. Otherwise, they may face unwanted penalties.

To avoid these consequences and feel more confident as a member of HOA, we are here to help break down these rules so that you know exactly what is expected of you as a homeowner.

What Rules Condo HOAs Have to Follow

As formal establishments, condo HOAs are not exempt from following a set of rules.

First, it is important to understand that there is an HOA board and management company responsible for making sure a condo community runs effectively.

The two different entities have their own roles and expectations.

The HOA board is comprised of elected volunteers, often community residents, who help manage the upkeep of the community. Here are a few basic rules and expectations of a condo HOA board:

• Act in a fair and consistent manner
• Refrain from voting on issues or making decisions that present a conflict of interest
• Maintain confidentiality
• Treat homeowners and other board members with respect during discussions and throughout any dispute resolution

The HOA board hires an HOA management company which provides helpful business advice and facilitates day to day operations. Their role is to implement the guidelines set by HOA, ensuring that they work in accordance with the state and national laws that protect homeowners.

What Rules Condo HOAs Expect you to Follow

Every homeowners’ association establishes their rules through their own covenants, conditions, and restrictions (CC&Rs). These CC&Rs apply to all condo residents and cover expectations regarding resident behavior, architecture, and common responsibilities.

Many common condo rules and regulations revolve around financial responsibilities, pet regulations, rental guidelines, and maintenance standards.

Arguably one of the most critical expectations as a condo owner is paying monthly HOA fees on time. These fees are non-negotiable and critical for HOA to fund services and amenities for the community.

How Rules are Enforced

Whatever the CC&Rs may be, they are not voluntary. Residents have a legal obligation to follow the condo HOA rules or they risk facing fines and/or legal action.

Generally, if the HOA board notices that a resident is not following a rule or missing HOA dues, a warning will be set in place- often in the form of a written letter. Along with the letter, residents may receive additional fines on top of their monthly fees. If you don’t pay the fine or respond to letters from the board, property manager, or a collection agency, the HOA can and will turn to small claims court or file a lien against your property.

To avoid any one of these penalties, it is crucial to follow the rules and pay your dues.

As a homeowner, it is part of your responsibility to know and follow the condo HOA rules. This will ensure a better community for all parties.

Among the more than 300,000 community associations in the United States, only about half maintain their insurance policy. Out of that half, only about 25 percent maintain adequate coverage.

This is problematic because HOA insurance is a crucial aspect of any community managed by an association.

If you want to make sure your current or potential condominium is insured sufficiently, here is everything you should know about condo HOA insurance.

What Kind of Insurance do Condo HOAs Have?

If you are living in a property managed by an HOA, the chances are that a portion of your mandatory monthly dues is helping to fund the homeowner association’s insurance policy.

To protect everything managed by the HOA, it is crucial that condo developments have what is called a master policy. Without this form of coverage, the HOA may levy special assessments on unitholders if an unexpected disaster was to occur and the building would need extreme repairs.

HOAs must be sure to also have hazard and liability insurance for specific areas of the condominium development, often including common areas, like stairwells and pools, and some exterior elements such as the condo’s roof.

Additionally, many homeowner associations purchase Directors and Officers Insurance as well as employee theft protection to ensure the financial security of the HOA and the people running the HOA.

What is the Insurance Meant to Cover?

Master policies generally cover damages and personal injury. The damages covered by a master policy involve damages to the shared property, which may be a result of storms, fires, criminals, etc. General liability insurance covers costs of any lawsuits for medical expenses filed by people injured in the common areas of the property.

Directors and Officers Insurance policies: This specific type of insurance covers both legal defense costs and damages if a homeowner decides to sue its HOA. This policy does not cover intentional misconduct.

Employee theft insurance can protect the association if a director, officer or property manager embezzles HOA funds.

How can you Check that your HOA has the Right Insurance?

To ensure that your homeowners’ association has sufficient coverage, it is critical to thoroughly review your community’s master insurance policy. Check to see what the policy covers in case of emergency and what your HOA is responsible for.

It is also helpful to make sure that the HOA governing documents do not conflict with your HOA master policy regarding the HOA duties to the unitholders.

Now that you have more insight into the importance of HOA insurance, be sure that your potential condo HOA is adequately insured before you purchase.

According to the U.S. Census Bureau, the average HOA fee runs residents $396 a year. This same research study also reveals that these numbers are on the rise.

So why exactly are homeowners required and willing to pay these extra costs? Well, we are here to help better answer that question.

Why are there HOA Fees for Condo Owners

Although homeowners are quick cringe at the word “fee”, the reality is that these expenses help maintain the upkeep of the neighborhood and quality of life for condo residents.

When people become condo owners, they also become automatic members of an HOA. With this membership comes monthly or annual dues to help fund the amenities and services the association provides.

HOAs also increase the exclusivity of condos, increasing the desirability of the property for current and future unit owners.

What do the Fees Pay For

Condo HOA fees may fund a wide variety of services and amenities. That is why it is crucial for prospective home buyers to investigate HOA policies before purchases to learn precisely what the dues cover.

Most HOA policies will cover basic services, such as building maintenance, landscaping, and garbage removal. Common amenities may also include a pool or gym.

Higher-end condominiums often utilize member fees to help fund luxury services and amenities. Today it is common for exclusive buildings to provide valet, a concierge desk, spas, and other resort-like features.

Naturally, the more services and amenities provided, the higher those monthly dues will cost unit owners.

A smaller portion of HOA fees goes towards the association’s administration, including legal, accounting, and management services.

What if you Don’t Pay the Fees?

So what happens if you miss a monthly fee?

While the repercussions may vary depending on what state you are in, there are basic penalties that the HOA will put into action.

First, be prepared to receive a letter reminding you of your outstanding debt immediately. The HOA may also add on a fine and/or interest on that missed payment.

Often, the HOA may also revoke homeowner rights. This may include taking away your privileges to vote on HOA matters or utilize common areas, such as a gym or pool.

To avoid these consequences, be sure to pay your fees in a timely manner; and if you do happen to miss a payment, make sure to keep open communication with your HOA board to resolve the issue and minimize penalties.

With a better understanding of condo HOA fees, we hope you feel more confident navigating your next home purchase! Experienced real estate brokers are also available to help make the process even smoother.