Whether you live in a condo or own one as an investment property, selling it can have some unique advantages and challenges compared to selling a single-family home. The good news is that even if the market is struggling, you can typically sell a condo faster than you could a house. Here are some steps you can take to ensure the process goes smoothly.
How to sell a condo
Condos are attractive to homebuyers because they’re generally less expensive and require less maintenance than single-family homes. Before you put your condo on the market, though, it’s important to take the right steps to prepare.
1. Check HOA rules
Condos are typically managed by a homeowners or condo association, which sets rules for the community, including rules around selling. Each association has its own set of covenants, conditions and restrictions (CC&Rs), which regulate the steps you need to take before you can sell and who you can sell to.
For example, you might need to pay all your outstanding HOA fees, if any, or the HOA might need to vet prospective buyers before it allows a sale to go through. In some cases, the HOA could have the right of first refusal, which means it can choose to buy the property at the agreed-upon sales price, regardless of your discussions with potential buyers.
As you prepare your home for the market, read through the CC&Rs for all of the amenities provided by your HOA. You’ll be able to tout these to prospective buyers as part of your home’s value proposition.
2. Determine how much the property is worth
Pricing a condo is different than pricing a single-family home. While you can generally come to a reasonable price for a house based on comparable homes in the area, that process can be a bit trickier with condos. In fact, just because another condo in your community sold for a certain price doesn’t mean you can get the same amount.
Some of the factors you’ll want to consider include:
- Floor number – Higher floors tend to sell at higher prices for several reasons, such as better views, fewer pests, more security and natural lighting and less street noise. As you’re looking at comparable condos in your area, make sure you’re comparing apples to apples.
- Living area – As with houses, the more living space your condo has, the more valuable it is. Keep in mind, though, that if a space is arranged in a way that makes it less efficient or comfortable, that could hurt the value.
- Bedrooms and bathrooms – The more bedrooms and bathrooms, the more your condo will be worth.
- Views – Depending on where you live, views can have a significant impact on the value of your condo. For example, if your condo has a view of the ocean, a large park, the city or the mountains, it could be worth more than a property that overlooks a shopping mall. As you research comps, you’ll also want to make sure you’re looking at properties that face the same directions (i.e., north, south, east or west).
It’s generally a good idea to enlist the help of a real estate agent during this process. As you search for an agent, make sure you choose one who has experience selling condos, which can have different quirks compared to selling other types of properties.
3. Determine when to list
Unlike traditional houses, when the busiest homebuying seasons tend to be spring and summer, condos don’t follow a specific selling cycle — at least not across the board. If you live in an area where people vacation, for instance, waiting until shortly before peak season might be the best way to maximize your profit.
Of course, if you don’t have the luxury of waiting for the right time, the best time to sell is when you need to. If you need advice on timing, speak with a real estate professional who understands the different factors that impact condo sales in your market. Your agent can help guide your decision.
4. Decide whether to make repairs
Curb appeal is just as important for condos as it is for other types of property, but because condos tend to be less unique in their communities than single-family homes, it could take a little more work to get yours to stand out.
A deep-clean is a must, but you’ll also want to decide whether to make repairs and touch-ups. If your market is currently a seller’s market, you could have more latitude to sell the condo as-is and have the buyer take care of the repairs. If there are some serious issues, however, such as a leaky water heater, some buyers might ask for a repair, or use that to negotiate a lower sales price.
5. Think about selling vs. renting
Depending on your situation, leasing the condo to a tenant might be a better option in the long run than selling.
If you don’t need the cash from your equity to buy your next property and you can feasibly get more in monthly rents than you’re paying on your mortgage, insurance, property taxes and HOA fees, turning the condo into an investment property could be the right move.
That said, consider the potential drawbacks of becoming a landlord. Expenses can add up quickly, and there’s always the possibility of vacancies and bad tenants. Managing the property can be time-consuming, too, unless you outsource.
Be sure to check your HOA or condo association’s rules and regulations about renting your property — in some cases, it might not be allowed or there could be significant restrictions on the process.
There’s no universal right or wrong strategy, so take your time to consider all of your options.
As you prepare to sell your condo, know that the process is different from selling other types of property. Connect with a real estate agent who specializes in selling condos early on in the process, and don’t be afraid to ask questions. Once you list your condo, keep in mind that it could go quickly, so be prepared to vacate the property and have other living arrangements in place ahead of time.