Tag Archive for: buying a condo

What to Watch for When Buying a Condo in Birmingham

If you’re getting ready to invest in the residential real estate market, you may be thinking about a condo instead of a single-family home. Buying a condo can have many advantages.

For example, condos are usually less expensive than single-family homes, often have many amenities included, cut down on the amount of time and money you have to dedicate to home maintenance, and may be located in central areas that feature access to transportation, dining, and entertainment.

Before you sign a purchase agreement, however, there are a few important things to pay attention to when buying a condo. Here’s a list of items to watch out for when buying a condo in Birmingham, Alabama.

Birmingham Real Estate Market Predictions

Before you buy anything in Birmingham, it’s important to think about your reason for buying and your objectives. Are you buying to invest? Are you buying a property for a rental? Are you purchasing a condo to live in and, if so, for how long do you plan to live within the condo?

If you’re buying something that you think you might sell in the near future, it’s smart to work with a real estate agent who can guide you through various market conditions in Birmingham, including rental market conditions if you’re going to rent the condo out. These predictions can inform where you buy and other specifications that may be important, such as condo size and amenities. 

HOAs Rules and Fees

One of the most important things to be on the lookout for when purchasing a condo is the condo association, or homeowners’ association (HOA). The HOA will undoubtedly require owners to pay a fee. This fee is likely variable and can be changed year-over-year or as needed by the HOA or when voted on by the board.

You should make sure that the fee—and any expected fee increases—fits into your budget. You should also review what the fee covers. For example, does it include yard work, amenities, and other property costs? Are these costs reasonable for what you are getting?

In addition to fees, most HOAs also have rules that must be followed. You should review these rules thoroughly and make sure they are agreeable to your lifestyle. For example, if you’re a dog lover, be sure that the HOA allows pets. 

Loan Issues

An important consideration when purchasing a condo in Birmingham or elsewhere is that buying a condo can, in some circumstances, present issues with securing a mortgage loan. One thing that a lender will likely require is that a high enough percentage of the units in a condo development are owner-occupied and that a single owner or investor doesn’t own too large of a percentage of total units.

In addition to these types of requirements, lenders may also have higher loan-to-value ratios, which refers to how much the condo is worth vs. how much is owed on the condo. If you don’t work with your lender to figure out the details well in advance, you may find yourself in a position where your loan doesn’t go through and you’re back to square one of the home buying process, potentially having lost earnest money and other expenses, too. 

Special Assessments

You should always ask about special assessments before buying a condo and learn as much as you can about the HOA’s reserve fund. A special assessment is an extra charge that the HOA can levy on condo owners in order to fund a specific project, such as a roof replacement.

Usually, special assessments can be implemented by an HOA board and do not require the vote of all members of the association. If the HOA doesn’t have enough reserve funds to cover costs for projects, then a special assessment is more likely. 


Of course, the community in which you’ll be living is always something to think about. But when buying a condo, who you’ll be living next to may be an especially important consideration, as you may very well be living on top of (or below) one another. You may share walls, have to work together to resolve disputes or make decisions, and generally be subjected to each other’s lifestyle preferences while in close proximity. Just something to think about before buying.

Call Our Residential Real Estate Attorneys for Legal Help

To learn more about residential real estate considerations and what to think about when buying a condo, or for legal representation during the process of buying or selling a home in Birmingham or the surrounding areas, call the BHM Law Group today. Our real estate attorneys can provide you with the quality representation you’re looking for. Reach us today at (205) 994-0902.