Article: Condo or Loft? Loft or Condo? A Beginner’s Guide

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We spend a lot of time here talking about the sale and purchase of standalone, single-family homes, and with good reason. These are the structures available on nearly every street, in every town in America. With the exception of Manhattan and San Francisco, it’s where most of the money is and quite likely where you focus most of your attention.

But we’d be remiss not to delve into the other types of homes that agents are often asked to list or look for – some of you, quite possibly, even specialize in condos and urban apartments, or “lofts” (though that specific distinction requires a few special factors, most urban apartments are commonly referred to as lofts these days). Those that do can likely attest that selling these properties is a different beast, with different factors, strategies and individuals in play. While concentrated in dense urban areas and vacation hubs, lofts and condos are becoming more popular across the country.

With the summer coming to an end, we thought we’d provide a beginner’s guide to buying and selling lofts and condos. Obviously, for a full perspective, we suggest seeking out an agent you know and trust who has experience with these properties, or consult your professional organization.

What’s the Difference?

What’s the difference between a loft and a condo? It’s typically structural: is here to help.

What in the Paperwork?

The paperwork and hoops to jump through for condos and lofts often differ from single family homes, and the most complicated factor is condominium associations or other “co-ops” that share costs for insurance and upkeep on the building the condos are in. We’re not going to go into deep details on this, but absolutely urge you know the disclosures and membership requirements of the building you’re buying/selling in before you even begin. Many building developers love the idea of selling their units, but don’t know the first thing about the structures that need to be in place once they do. You can be an asset to them (and perhaps land an exclusive for the property!) if you do.

This article,while specific to St. Paul, Minn., lays it out the disclosure situation pretty simply:

Disclosures – You will need to disclose the problem issues via the Sellers Disclosure that have/could affect the property’s future value or desirability as part of the sales process. You also will need to provide the condo declarations/condo resale certificate: association financials, covenants/restrictions, the costs associated with common insurance and utilities.

What Questions Should You Ask

While aimed at buyers, this HGTV article has some practical advice about questions that should be asked before you get serious about a loft or condo property (in addition to another explanation for the difference between the two!). These questions include:

How many units are owner-occupied?

Smart question. If owners are using the property as a second or vacation home or subleasing, you could wind up in a less than optimal living situation in the form of ghost-empty hallways or, worse, rowdy college kids or vacation partiers next door.

How is the building maintained?

When you own a condo you aren’t only responsible for your unit, but the common areas as well. If they already look shoddy it’s a huge red flag that this may not be the place where you want to become invested.
What about the Homeowners Association?

From the article:

The homeowners association, or HOA, marks the biggest difference between a single-family home and a condo or loft home.

An HOA is the entity established by the project developer that is turned over to the condo-unit buyers once buyers have closed on a pre-established number of units, usually around 50 percent,” says Roy E. Carroll II of The Carroll Companies. “The HOA in most condo situations is responsible for collecting dues and maintaining the common areas.
Remember Resale

Moreso than single-family units, condo and lofts are risky resale investments. Sure, certain downtowns are always going to be in demand, but in many places desirability and the units available in the market can turn on a dime as more units are built (oversaturation of the condo market is common) or urban blight sets in. Remember that, with all but some very specific exceptions, loft or condo living is a temporary situation – a phase of life, a workplace necessity, or a real estate investment. Make sure your buyers aren’t putting themselves in a situation they won’t be able to get out of in a few years. has a handy article of things to look for to increase the odds of a favorable resale, when the time comes. Quick hint: The more bedrooms the better… but we suggest reading the whole article here.