Buying a Condo in Philadelphia - What You Need to Know

For many Philly residents, purchasing a condo is the easiest way to get started on the property ladder. Condo living can range from studios in convenient buildings for $150,000 all the way up to multi-million dollar luxury penthouses. Owners share responsibility for building expenses with fellow residents in your association, and in some cases benefit from lots of amenities.

Whether you are buying your first place in a luxury high-rise condo located in Center City or a modern multi-unit condo in a new construction building in Fishtown, Philadelphia has a lot of great condo choices if you are not looking for a classic Philly rowhome.

Before you start your condo search in Philly, make sure you are up to speed on what a condo is and the reasons it might be the right choice for you. 

What is a condo?

The word "condo" is an abbreviated term for condominium, which is a type of real estate ownership. When you own a condo, you own your individual dwelling unit as well as an assigned percentage of the common elements that is held collectively by the overall condominium. 

Common elements may include lobbies, fitness centers, shared roof decks, etc. All condo owners are responsible for the shared expenses related to the common elements.

What are HOA fees?

Homeowners association fees (HOA fees) are a predetermined monthly amount paid by owners of certain property types to the association. These fees are used toward the maintenance and improvement of the property collectively owned by the association.

Examples of expenses condos incur:

• Payroll for staff (doorman, porter, superintendent, etc.)
• Utilities (common lighting, water, etc.)
• Service contracts for elevators
• Maintenance and cleaning of common areas
• Snow removal
• Insurance for the condo association and common areas
• Contingency (this is like a savings account for the building)

Monthly HOA charges are very common for condominiums as well as communities of single family homes with shared amenities like pools or other facilities in suburban areas. In the case of condominiums, HOA fees are sometimes referred to as common charges, association fees or condo fees. They are paid to the condo association, and the monthly rates are periodically set by the board of the condo association and are commensurate with the percentage of common elements owned.

Benefits of buying a condo in Philly

• Less maintenance
• Proximity to City Center
• Building amenities

Downsides of buying a condo in Philly

• Less privacy
• Monthly HOA fees
• More rules and regulations

Tips for Philadelphia condo buyers

• Search for the amenities you need
• Get cash back with a commission rebate
• Reading and understanding condo docs

Search for the amenities you need

Larger condo buildings tend to have more amenities because there are more residential apartments to share the costs. 

For example, luxury condo 10 Rittenhouse offers a 24/7 staffed lobby/concierge, a chauffeur-driven BMW and a dedicated floor of amenities that includes a state of the art fitness center, a lap pool, a library, an outdoor terrace and party space. Of course in order to pay for all these amenities, the HOA budget must be significant and all residential unit owners will surely pay a big monthly fee.

Small buildings on the other hand can’t offer the same amenities, but that pays off in the form of lower common charges. Perhaps you enjoy going to a gym or a sporting club that you already belong to. If so, then having a gym in your condo building and paying for it via condo monthlies may not be something you wish to pay for as it’s duplicative.

So think about what kind of amenities you want and are willing to pay for.

Get cash back with a buyer rebate

Condo buyers can save thousands on their purchase by choosing a broker that offers a commission rebate.

Prevu, a tech-enabled brokerage in Philadelphia, gives buyers up to 1% of the purchase price returned to buyers with the company’s Smart Buyer Rebate Program.

That’s extra money back in your pocket to offset closing costs, furnish your new condo, or replenish the savings you used for your down payment.

Reading and reviewing condo docs

Owning a condo is different than owning a home. There are condo association legal documents and rules to review and observe. When you purchase a resale condo, the seller and listing agent must provide a 3407 Resale Certificate and other various condo documents for your review. 

The 3407 Resale Certificate contains important information such as whether there is a special assessment in place for the unit holders. This means owners will be paying extra money into the association above and beyond the monthly HOA fees. Usually this is done for capital upgrade projects such as painting hallways or replacing an elevator, for example.

The 3407 will also tell you how much the common charges are every month, how much money the association has in its coffers and if there are any violations on the unit or building’s common spaces.

Other important documents to read and review are the condo by-laws, house rules and regulations, the annual budget and any engineering or environmental reports. While this is dry information and not always easy to read, it’s important to spend time going through it and digesting it.

Condo rules and regs

Make sure to know and understand the rules and regs for the building, particularly if you ever want to rent the property out or do short-term rentals such as AirBnB, et. al. Some buildings do not allow for short-term rentals or have strict rules surrounding it, so know what you are buying before you sign on the dotted line.

Summary

Condos are a terrific way to approach a home purchase as the communal aspect allows unit owners to benefit from the shared ownership structure. Know your target market, read and understand the condo docs and enjoy your new home!

Condos for sale in Philadelphia

Interested in buying a condo in Philly? Browse listings in your favorite neighborhoods and see how much you can save with Prevu’s commission rebate.