Buying a condo is one of the biggest financial decisions you’ll make, and it comes with a few more moving parts than buying a single-family home. There’s the mortgage process, the condo board, the HOA fees, the inspection, and a stack of paperwork at the end. It’s a lot.
But it doesn’t have to be overwhelming. Here’s the process, from getting pre-approved to signing on the dotted line, so you know exactly what to expect and when.
TL;DR
- Get pre-approved: Submit financial documents and get an estimate from the lender.
- Start searching: Choose your deal-breakers, and start your condo search.
- Make an offer: Work with your agent to make a competitive offer.
- Apply for a condo loan: Gather paperwork and apply for a mortgage.
- Meet the condo board: Come prepared to make a good impression.
- Get a home inspection: Make sure you’re getting what you (and your lender) are paying for.
- Sign on the dotted line: Gather final paperwork and wait patiently until you get the keys.
Step 1: Get pre-approved
Before you start shopping, determine how much you can afford to spend. For most of us, this means a trip to the bank. Unless you’ve saved up enough to buy your home in cash, you’ll probably need to take out a mortgage.
Take note that a condo mortgage is different from a single-family home loan. Since condos are a form of shared ownership, they’re considered to be riskier than single-family homes. That’s why getting pre-approved for a loan means presenting your income, assets, debts, and other crucial financial information to help your lender figure out how much to loan you. Here’s a list of documents you’ll need to submit:
- Tax returns
- Income and employment records (2 years worth)
- Asset and bank statements (60 days worth)
- Records of monthly debt payments
- Rent payments
Once you’ve submitted all of your documents, your lender will come back to you with an estimate. This figure, and their seal of approval, is the first step in your condo-buying journey.
Step 2: Start searching
Although you can technically find a condo on your own, using an agent is helpful, especially if you’re a first-time home buyer.
Agents don’t just help you find the right property. They’re also instrumental in helping you negotiate a price, submit an offer, and work through the paperwork. Plus, it doesn’t hurt to have an advocate who knows the buying process inside out.
Pro tip: If you’re using an agent, make sure you do some research about them, like checking they have licensing certificates and asking for references. There’s nothing wrong with contacting previous clients to hear about their experience.
To help your agent find you the condo of your dreams, you’ll need to tell them what you’re looking for. Here’s a list of things you should discuss:
- What sort of community are you looking for? Old, young, mixed?
- What are the rules of the HOA? Can you have guests stay over, or bring your dog?
- Are you looking for any specific amenities?
- How much can you afford to spend on HOA fees?
- Is there parking?
- What sort of neighborhood are you looking for?
When Lemonader Jacob, a condo owner from New York, was searching for a property, here was his rule of thumb:
“Pick five things you want, and assume you’ll get two of them. We wanted an open concept kitchen, washer/dryer, lots of light, large closets, and a quiet location. We ended up with the closets and the quiet.”
Buying a condo for the first time vs. the second (or third)
The steps are the same, but the experience isn’t.
| First-time buyer | Experienced buyer | |
|---|---|---|
| Biggest advantage | More loan programs available, including FHA with lower down payments | Stronger credit history, faster financing, better negotiating position |
| Biggest risk | Underestimating HOA complexity. The board can reject a buyer even after an offer is accepted. | Assuming condo buying works like single-family home buying. It doesn’t. |
| Where to focus | Get pre-approved early. Work with a buyer’s agent who specializes in condos, not just single-family homes. | Pay close attention to the HOA review, FHA list verification, and condo association insurance. These are the steps that catch experienced buyers off guard. |
| One thing to know | Many first-time buyers don’t realize how much power the HOA holds. Review the HOA rules before you make an offer, not after. | Your speed and credit history are your leverage. Use them when negotiating. |
Step 3: Make an offer
Another nice perk of using a realtor or agent is they’ll advocate for you when it’s time to make an offer.
Don’t hesitate to negotiate. Most sellers set a high price, knowing buyers will want to bargain them down. To increase your chances for negotiation, research the average prices of the property in the area, find out how long the property has been on the market, and figure out if the seller is looking for a quick sell. All this information will help shape your offer.
Calculate a price based on similar homes and coming in 4% to 7% below to begin negotiations.
So if the asking price is $260,000, you should start your negotiations somewhere between $241,800 and $249,000.
If the seller doesn’t accept your offer, they may make a counteroffer. If not, it’s probably worth checking whether there are other areas the seller can cut back on, like closing costs or processing fees.
For Lemonader Hao, who owns a condo in California, negotiating was a must:
“I knew negotiating was part of the condo buying process. The asking price was $425k, and I was able to get it to $408k. The property was on the market for over 28 days so I assumed no one had made an offer, so I started my negotiating price low.”
Your agent will help you draft an official offer with all of the negotiated details outlined, including the terms of the official agreement, earnest money (a good faith deposit), closing dates, and any other particulars you’ve agreed on. To make it official, both parties must sign and date the offer agreement.
Step 4: Apply for a condo loan
Getting a condo loan is a little more involved than a standard home mortgage. Here’s why: both you and the condo building itself need to get approved. And not every building qualifies.
The two main loan types
FHA loans are backed by the federal government. They’re popular because they’re more flexible, lower down payments, and easier credit requirements. The catch is that the condo project has to be on the FHA’s approved list. If it isn’t, you can’t use this type of loan.
Conventional loans are secured through a private lender – a bank, credit union, or mortgage company. They don’t require FHA project approval, but they do require a stronger credit score and a bigger down payment.
How much do I need to put down?
| Loan type | Down payment required | Credit score needed |
|---|---|---|
| FHA loan | 3 to 15% | 580 and above |
| Conventional loan | 20 to 25% | 680 and above for best rates |
Most lenders offer the lowest interest rates to borrowers with a credit score of 780 or above. The lower your score, the more you’ll likely need to put down upfront.
What if my condo isn’t FHA-approved?
The condo you love isn’t on the FHA-approved list. That doesn’t mean the deal is dead, it means you have options.
| Option | What it means |
|---|---|
| Ask the HOA to pursue FHA certification | The condo association can apply for FHA approval by submitting financial records and meeting occupancy requirements. It takes 30 to 60 days, but may be worth it if the unit is otherwise ideal. |
| Switch to a conventional loan | No FHA project approval needed. You’ll need a higher down payment (typically 20 to 25%) and a credit score of 680 or above, but it’s the most common alternative. |
| Explore a portfolio loan | Some community banks and credit unions offer non-conforming loans they keep in-house, which means they can be more flexible about the condo project’s approval status. |
One thing to know: FHA approval is tied to the condo project, not the unit. Even if your finances are perfect, an unapproved building can block the loan entirely. Check the FHA’s approved condo list early, before you fall in love with a place.
One more thing you’ll need: condo insurance
Your loan officer will give you a list of documents to provide as part of your application. One of them is proof of condo insurance. You can get a policy with Lemonade in minutes, with plans starting at $25 per month. Your policy start date will be set to the closing date, the day the condo officially becomes yours.
Step 5: Meet the condo board (HOA)
Every condo has a homeowners association, or HOA. Think of it as the governing body for the building or complex. It sets the rules, maintains the shared spaces, and yes, it has to approve you as a buyer before you can close.
What does the HOA actually do?
Residents pay a monthly HOA fee, usually between $80 and $500, that covers the maintenance and upkeep of shared areas like lobbies, gyms, rooftops, and hallways. The HOA also maintains a condo association insurance policy that covers the building’s common areas.
On top of that, the HOA enforces the rules of the building. Things like noise levels, whether you can have guests stay long-term, and what size dog you’re allowed to bring home. Before you fall in love with a unit, make sure you can actually live with the rules that come with it.
How do you get HOA approval?
After your offer is accepted, you’ll need to formally apply to the HOA. That usually means submitting:
- A full financial statement (income, assets, and expenses)
- Personal and professional references
- A cover letter, if the HOA allows it (worth doing, it helps put a face to the application)
Lemonader Ed, a condo owner from DC, had a smooth experience because he did his research beforehand:
Pro tip: Don’t wait until you’re under contract to start learning about the HOA. The board has the power to reject a buyer even after an offer is accepted. The earlier you dig in, the better.
How to evaluate an HOA before you commit
Before you finalize any offer, request these three documents from the condo association:
| Document | What to look for |
|---|---|
| Reserve fund study | A healthy HOA should have reserves covering at least 70% of anticipated future repair costs. Low reserves often lead to special assessments, which are one-time charges levied on all unit owners to cover unexpected expenses. |
| Annual budget | Look for consistent fee increases or significant line items that suggest deferred maintenance or financial strain. |
| Meeting minutes (last 12 to 24 months) | Watch for recurring complaints, pending litigation, or major structural repairs. A condo association mid-lawsuit poses real financial risk. |
Key questions to ask before you sign anything
| Question | Why it matters |
|---|---|
| Is the HOA self-managed or professionally managed? | Professional management usually means more consistent enforcement and record-keeping. |
| What’s the current delinquency rate among unit owners? | High delinquency puts pressure on the reserve fund and can lead to special assessments. |
| Are there any pending special assessments? | These are direct costs passed on to you as the new owner, sometimes in the tens of thousands. |
| Has the HOA raised fees significantly in the past two years? | Steep increases signal financial instability or a backlog of deferred maintenance. |
One thing to know: Have your real estate attorney review all HOA documents before you finalize your offer. What’s in the meeting minutes can be just as important as what’s in the contract.
Step 6: Get a home inspection
A home inspection isn’t mandatory but it’s always recommended. A home inspection is carried out by an impartial inspector who makes an official assessment on the physical structure of the condo.
The home inspector will check out features such as the plumbing, wiring, and the structure of the unit. They’ll then give you a report that sums up the condition of the property, and will let you know if it needs any repairs. Once you have this report, you can then negotiate with the seller whether these repairs or replacements are included in the total cost.
It’s okay to ask for some cash-back credit to help pay for any repairs. Figure out whether the work needed involves a serious structural renovation, in which case you might want to think twice about buying, or just a few eyesores here and there.
Step 7: Sign on the dotted line
You made it. This is the final step, and while there’s still some paperwork ahead, the hard part is behind you.
First, understand escrow
Once both parties agree on the terms of the contract, you’ll enter a period called escrow. It basically means the deal is in progress but not yet final. A neutral third party holds the funds and manages the transaction until every condition of the contract has been met, including your closing date.
What is a closing date?
Your closing date is the official day ownership transfers from the seller to you. It usually lands a few weeks after your offer is accepted. Before that day arrives, a real estate attorney will draft and verify the final contract documents.
What happens on closing day?
On closing day, here’s what to expect:
| What happens | Details |
|---|---|
| Down payment transfer | A certified check or wire transfer moves from you to the seller. |
| Condo insurance submission | You’ll hand over your proof of insurance to your lender. If you haven’t sorted this yet, you can get a policy with Lemonade in minutes. |
| Loan document review and signing | You’ll go through your mortgage documents and sign off. Read carefully — this is the agreement you’ll be living with for a long time. |
| Closing disclosure signing | This document lays out every final charge in your contract, also known as closing costs. |
What are closing costs?
Closing costs are the fees due at the final stage of the transaction. Your closing disclosure will break them down line by line. They typically include:
- Condo association fees
- Title insurance
- Escrow fees
- Filing fees
The total varies, but it’s worth knowing what to expect before closing day so nothing catches you off guard.
Then, the keys are yours
Once everything is signed and funds are transferred, the condo is officially yours. All that paperwork, all those steps — it was worth it.
And if you haven’t already, make sure you’ve got Lemonade condo insurance in place from day one. It covers you, your stuff, and everything from your outermost walls, inward.
Before we go…
Buying a property is no easy feat, but all that bureaucracy is in place to protect both the seller and the buyer, and it’s worth it. And if you do decide to buy that condo, make sure to get some Lemonade condo insurance to protect you, your stuff, and everything from your outermost walls, inward.
Buying a Condo FAQs
How much money do I have to put down on a condo?
It depends on the loan. A conventional loan typically requires 20 to 25% down, plus a solid credit score. A government-backed loan, like an FHA loan, may only require 3 to 15%.
What credit score do I need to buy a condo?
Most lenders reserve their lowest interest rates for borrowers with a score of 780 or above. Below 580 to 600, you’ll likely need to put more money down to qualify.
What is a condo HOA fee?
It’s a monthly fee paid by every resident in the building, usually between $80 and $500. That money goes toward maintaining shared spaces like lobbies, hallways, and amenities.
What documents do I need to get pre-approved?
Plan to submit tax returns, two years of income and employment records, 60 days of bank and asset statements, records of monthly debt payments, and rent payment history.
What should I look for in HOA financial records?
Request the reserve fund study, annual budget, and meeting minutes from the past 12 to 24 months. A healthy HOA keeps reserves at 70% or more of anticipated future repair costs. Scan the minutes for lawsuits, deferred maintenance, or recurring complaints. And ask directly: are there any pending special assessments? How often have fees gone up? What’s the delinquency rate among current owners?
What happens at closing?
A few things happen in sequence: your down payment moves to the seller via certified check or wire transfer, you hand over proof of condo insurance to your lender, you review and sign your loan documents, and you sign a closing disclosure that breaks down every final charge, including association fees, title insurance, escrow fees, and filing fees.
A few quick words, because we <3 our lawyers: This post is general in nature, and any statement in it doesn’t alter the terms, conditions, exclusions, or limitations of the policies issued, which differ according to your state of residence. You’re encouraged to discuss your specific circumstances with your own professional advisors. The purpose of this post is merely to provide you with info and insights you can use to make such discussions more productive! Naturally, all comments by, or references to, third parties represent their own views, and Lemonade assumes no responsibility for them. Coverage may not be available in all states. Please note that statements about coverages, policy management, claims processes, Giveback, and customer support apply to policies underwritten by Lemonade Insurance Company or Metromile Insurance Company, a Lemonade company, sold by Lemonade Insurance Agency, LLC. The statements do not apply to policies underwritten by other carriers.
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