Buying a Condo in Denver - The Complete Guide
By Sean Creamer on February 09, 2024
Starting up a home search in Denver is no easy feat. There are plenty of home styles, each more different than the last.
Many folks come to the Mile High City looking for expansive homes and yard space, and plenty of new developments between Boulder and Denver offer both. But not all buyers want the responsibility of buying a house. Depending on your housing needs and life goals, purchasing a Denver condo might be your preferred choice.
Condo buyers can find real estate listings for single units in a high-rise, like the Barclay Towers on Larimer Street, or detached condo townhomes in managed communities in expanding suburbs like Green Ranch Valley.
But buying a condo differs slightly from a home purchase, and not knowing proper listing information can lead to buyers overpaying for a property. To help buyers get started, the team at Prevu Real Estate put together a quick guide on how to buy a condo in Denver.
What are condos?
Before jumping into the Denver real estate market in search of a condo, you should research the differences between property types to learn what defines a condo.
In Colorado, a condominium is a type of property where the owner has full title to the unit or home they live in, yet the owner shares an undivided interest with other common areas in the development. Homeowner Associations (HOA) manage the shared common areas, whether that shared area is the lobby of a high rise or the greenspaces of a gated community.
Each condo owner pays a monthly common charge fee for the management, sometimes referred to as HOA fees. While you own and maintain your condo unit, the HOA is in charge of common areas. The HOA ensures amenities are in working order and handles cleanings. These kinds of amenities can range from shared rooftop decks and gyms to parks, pools, and private facilities.
Additionally, the HOA manages and enforces the condo's Covenants, Conditions, and Restrictions (CC&Rs).
Get to know the rules
The CC&Rs of each building varies with the management. Some communities have a lot of rules and active management boards, while others have a relaxed CC&R.
As you scope out potential condos, you need to research the CC&Rs to make sure they fit your lifestyle. For instance, if you like to host parties on the weekend, some condos may impose a quiet-time rule. If you have a sedan for driving around Denver, but keep a truck for tooling around the Rockies, you should make sure the condo has space for your rides prior to making an offer..
CC&Rs cover much more than parking and noise; they also cover regulations around renovating your condo. For instance, you may have to keep your home's exterior paint to one of several paint palettes. Or, if you want to raise the height of a room, the CC&Rs might have restrictions on how tall a ceiling can be.
It is safe to assume that many CC&Rs will have rules oriented around making alterations to condo units. Yet CC&Rs are not ironclad, and each condominium board votes on rules. Unit owners are encouraged to weigh in on upcoming votes concerning rules, expansions, adding new amenities, and if HOA fees have to rise to cover the cost of any new assessments.
CC&Rs are important to track, as they differ depending on what style of condo you end up choosing and can vary from community to community.
What kinds of condos are there?
Denver has plenty of house styles, from older homes to new construction single-family homes. The same is true of the condos in the Mile High City.
Buyers can find resale units for sale in some parts of town, while new construction units characterize other parts of Denver. For folks who want to be in the heart of Denver, high-rise condos, like the Glass House in the RiNo neighborhood, offer luxury amenities. Located right on the shores of the South Platte River near Confluence Park, units in the Glass House have pristine views of the city and the nearby Rocky Mountains.
Yet not all condos are gleaming steel and glass towers. There are plenty of chances to purchase a home in a managed condo community in Denver's suburbs, where the HOA manages the lawn upkeep, takes care of the streets, and sometimes even handles trash management.
Buyers interested in this kind of living can find plenty of developments lining the Denver-Boulder Turnpike, ranging from resale homes to new construction properties. Once you figure out if you want to live in Downtown Denver or a suburban community, you must get your finances in order.
Getting ready to make an offer
Just like buying a house, you need to have your financial information in order before you start checking out condos.
You will need a mortgage unless you finance your purchase with an all-cash offer. Getting a pre-approval helps you prepare to purchase a condo as the lender will comb through your financials, then provide you with an amount dictating how much the bank will loan you.
This way, you know your budget and can pick out target homes accordingly. Plus, sellers will take you more seriously when they see you are pre-approved..
You can even speed up the process by getting a fully-underwritten pre-approval from a lender, which lets you close quicker on the condo of your dreams by completing more of the underwriting process in advance.
Making an offer
Making an offer on a Denver condo can be easy and seamless, thanks to online tools.
Digital home buying platforms like Prevu Real Estate enable buyers to connect and collaborate with a dedicated buyer’s agent who can walk you through the purchasing process, coaching you on each step of the transaction.
Some sellers who want to offload their property jump at an offer. But some sellers will negotiate, hoping for a better sale price. This instance is when a buyer’s agent shines, as they can help guide you through contingencies and how they can make or break an offer.
Plus, your agent acts as a buffer, making sure you do not unintentionally leak information about the negotiation to the seller, while helping you take emotion out of the negotiation process. If you are dealing with a developer selling units before construction starts, your agent can help you craft an offer asking for upgrades on the property or concessions on price or fees.
But after your offer gets accepted, the deal moves into the next stage, where you are under contract.
Seller disclosures and condo inspections
When you get a seller to sign off on your bid, you are under contract. Deals can fall apart at this stage, depending on seller disclosures and inspections of the space. Once the offer is accepted, the buyer typically orders an inspection within a negotiated period of time (typically a matter of days) and requests any repairs on the unit.
Your agent can connect you to home inspectors, who will know local regulations and codes concerning property investigations. They will check for electrical, HVAC, and plumbing issues by testing the condo's light switches, drains, and other infrastructure. As your inspector looks over the unit, your agent will pour over the finances of the homeowners association, checking for open permits, outstanding debts, and lawsuits.
During this period, the seller must provide the CC&Rs of the building or community to the buyer, disclosing any material legal issues or significant remodeling projects. Buyers in Denver can purchase a condo unit as-is, but they have the right to request repairs.
If the seller accepts, they will do the repairs, offer credits to the buyer, or reject the offer and make a counteroffer. But if everything goes well, the deal moves to the next step.
Title reports and insurance
When you are under agreement to purchase a condo, it is time to take care of title insurance and reports.
You will want proof of title from a seller as it signifies they are the condo's owner and are passing clean title to you. The title report informs buyers about the trail of ownership throughout the lifetime of the condominium.
The title officer in charge of your report searches for titles on the unit, building, and land, looking for discrepancies. Typically, the cost of a title report, and sometimes the title insurance premium, is covered by the seller.
Once the title company ensures a clean deed, the runway is clear for the deal to enter the final stages.
Final steps before closing
After a buyer gets the all-clear on the title, it is time to obtain a "clear to close" from the lender. This signal usually comes at or just before the 30 days it takes to process the mortgage loan. At the onset of negotiations, the buyer and seller agree to a closing date that suits both parties.
As the "clear to close" makes it to the seller, buyers do their final verifications of the condo, and the escrow company handling the transaction begins the closing proceedings. Buyers must ensure their homeowners' insurance starts on the official move-in date.
This step is critical, as mortgage lenders will not release the needed funds until insurance is in place.
The final walkthrough
As you sign the final closing documents, it is time to do your last walkthroughs before you officially own your new condo.
Once you finish up and approve the condition of the unit, it is time to pay for the final closing costs. Buyers must wire this money, as escrow and title companies do not take bank or cashier checks.
When the wire clears, you can get the keys to your new Denver condo and begin your life in the Mile High City.
