Condominiums are gaining in popularity in many markets. An estimated 42 million Americans now reside in housing that is part of a community association, whether they are townhomes, industrial lofts, or high-rises buildings. If you have tried to market a condominium in a single-family market, you may know that there are some subtle differences to marketing a shared-wall home to a buyer, especially a buyer who has never lived in a condominium before. So how do the pros do it? Chicago REALTORS who specialize in condominiums provide the answers on what to tell your buyers.

Buyers Must Understand Their Priorities

A lot of things change when buyers purchase a condominium. They may have limited and assigned parking. They may have restrictions with regard to guests, pets, children, or personal employees. Pool or lawn parties may be subject to association approval and scheduling. Shared walls mean less privacy, even in the most expensive units.

Chicago REALTORŪ Bruce Hackel of RE/MAX South Suburban, Flossmoor, says "When someone is buying a condo, understanding their priorities can be more important than with other types of home purchases because when you purchase a condo, you're often buying a share of a very large, complex community."

Low maintenance is a trade-off for shared responsibility

The amenities that a condominium lifestyle can offer are irresistible. Where else can a buyer get a security guard, swimming pool, or an exercise gym only steps from their front door. The price for those conveniences and more is sharing. A condominium means shared walls, shared amenities. So the first thing you need to ask your buyer is, "Do you like to share?"

A neonate condo buyer needs to know that low maintenance obligations and security are offset by monthly assessment fees and adherence to the association's regulations. While a single family home would have to be maintained by the home owner at his/her own expense, there is a corresponding freedom from regulations, unless the home is situated in a planned or gated community governed by a homeowner's association.

Look at the demographics in the community.

Tom Jakuvik, a Chicago agent, says condos have tendency to segregate themselves. Due to price, location and other factors, a condominium community can quickly be dominated by young people, or older people, or other groups. He suggests that you tell your buyers to look at the makeup of the building. Have them knock on doors and meet the people who will be their new neighbors , or if the security is restrictive, tell them to speak with the association office. Then they can decide for themselves if the community is right for them. Help your buyer look for a condominium where the association works at creating social interaction, rather than one that leaves the residents to their own devices. Buyers are the most satisfied with their home purchase when they understand their own priorities and then make sure the condominium community they select is a good match.

Look at the comps

Remember to tell your buyers that comparables of other units don't tell the whole story. They typically don't offer much information about condition, an important factor when deciding what to pay for a home. Remind the buyer that sellers use comps to price their units, so the value should be in alignment with other similar units that have sold or are being offered for sale.

Review the Rules

"Many of my buyers are new to condo ownership, so I devote quite a bit of time to outlining the differences between life in a single-family home and life in a condo. Condo owners are required to follow the rules of the association, even those they do not like, and the rules are not easily changed," reports Ethan Lewis, broker/manager of RE/MAX Alliance, Skokie.

He urges buyers, once they've found a condo that piques their interest, to promptly look over the rules, regulations and by-laws of the condo association. For example, rules governing pets or decor often are a make-or-break issue for buyers considering a condo.

Look at resale

Every home that is bought must one day eventually be sold. When your buyer is thinking condo, you need to point out the drawbacks to some association rules.

Some condo associations have regulations that require that units can only be sold to owner/occupants. That may sound wonderful on the surface, but it could seriously restrict the buyer when it comes to resale. Currently the market tide has raised all boats, including that of the condominium, but should the market take a turn, condominiums with such restrictions will have a limited number of buyers, and limited buyers always cause housing prices to drop.

Renters constitute about 50 percent of the population. Thirty percent of condominiums are bought by investors. Why would anyone want this large segment of the market to be restricted from purchasing one's property?

Get to know the association

Some associations simply spend too much money or not wisely. Excessive association fees will restrict the resale price of your buyer's unit. As an agent you can find out the average fees in your area, and get hold of the association's accounts to show your buyer.

"When writing the sales contract, a condo buyer should always specify that the contract is subject to receiving the condominium declaration, by-laws and budget," advises Andee Hausman of RE/MAX Experts in Buffalo Grove. "I always want to make sure that the buyer and the buyer's attorney have ample opportunity to review the condominium documents during the attorney's approval period."

Another important topic that deserves buyer attention is the condominium's management structure, including the board of directors and the day-to-day manager.

"It is important to investigate the health of the condo association prior to buying," says Hackel. "I recommend that my clients call the association president and ask a lot of questions. Request a history of assessment charges for the last five years. If the condominium is professionally managed, call the management company and ask questions about its role and objectives."

It's also important to understand what your monthly assessment paid to the association will cover because that can vary widely, notes Diana Ivas of RE/MAX Elite, Hinsdale.

"Assessments typically cover maintenance costs, water and sewer charges, i nsurance, garbage pickup and specifics such as snow removal, but while some associations also include heating and air conditioning costs in the assessments, others don't, and knowing that distinction can be important in the buyer's decision making process," says Ivas.

Perhaps even more vital is getting a clear picture of the association's financial situation. Have your buyer look at the reserves for major improvements and repairs. Are the assessments charged sufficient to cover the annual operating overhead? The association should not operating at a deficit regularly although there are times when you must make allowances for unplanned but essential expenditures. Also, the association should be adding to its reserves every year. Look at an association's actual reserves and compare them to its plans for future improvements. Consider the age and condition of the building.