Home Buying

Buying a condo? There are concessions out there.

Experts: It’s still a seller’s market, but a slowdown in sales means shoppers can find wiggle room.

Redfin reported that the median monthly condo fee in Boston is $414, but that figure can climb well past $1,000 — even more than $20,000 — per month in newer luxury buildings that provide hotel-style amenities. Ally Rzesa/Globe staff

By Cameron Sperance, The Boston Globe

4 minutes to read

Everyone loves a holiday giveaway, and savvy condo buyers can score one if they know what to ask for during sales negotiations.

Concessions around things like free rent are common in the Boston apartment market: Zillow reported nearly 30 percent of apartment listings in the city in October came with a freebie like waived parking fees or several weeks of free rent — a 7.4 percent increase from a year ago. But experts say a softening in condo sales means you can score concessions there, too.

“If you’re negotiating with a seller, you’re far better off discussing” credits for closing costs or condo fee coverage for a certain time frame from a cash-flow standpoint, said Sue Hawkes, managing director at The Collaborative Companies, which provides marketing and research services to residential developers across the region. “It’s just a better way of negotiating to the buyer’s benefit, and frankly, it really doesn’t matter as much to the [development] seller.”

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Condo sales fall

A midyear report by The Collaborative Companies noted an 8 percent decline in Boston condo sales for the first six months of 2024 compared to the same period in 2023. A combination of inflation-eroding purchasing power, higher mortgage rates, and limited inventory is partially to blame, according to the report.

The number of closed sales was up nearly 3.8 percent for condos in the region in October, according to a report from the Greater Boston Association of Realtors, but some experts say this may have been due to a temporary dip in mortgage rates in September.

Given today’s high mortgage rates, shaving even a few thousand dollars off a final sales price might not make that much of a difference in terms of one’s monthly mortgage payment, Hawkes added. Plus, despite the softer pace of condo sales, it’s still a seller’s market, with more people looking to buy than there are available homes — meaning less wiggle room on price.

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But buyers can feel a difference in their wallets if they negotiate a concession like closing costs or no condo fees for a certain period.

“When the mortgages were 2 percent or 3 percent, people were not as concerned about the condo fee on your monthly nut because in the aggregate, it was still an attractive number,” Hawkes said. “But in this day and age right now, with interest rates so high, people are looking at other ways to reduce their monthly nut, and the quickest way to do it is to reduce the condo fee because that’s a number they have to pay every month no matter what.”

Condo fees climb

Concessions can provide much-needed financial relief to buyers at a time when condo fees are on the rise nationally. In a nationwide analysis of the 50 most populous metros, there has been a roughly 6 percent median increase in condo homeowner association fees in a year, with Boston slightly below that at 4.5 percent, according to Redfin, an online real estate marketplace.

The national surge is due in part to the turmoil in Florida, where the market has been hit by soaring insurance costs and new safety requirements following the deadly Surfside condo collapse. But Boston-area experts said owners here can face rising condo fees because our older housing stock comes with higher maintenance costs. Government-sponsored mortgage buyers Fannie Mae and Freddie Mac both require that an HOA set aside 10 percent of a development’s operating budget for building reserves, which can also nudge condo fees higher.

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The Redfin report said the median monthly condo fee in Boston is $414, but that figure can climb well past $1,000 — even more than $20,000 — per month in newer luxury buildings that provide hotel-style amenities.

While there isn’t the same degree of data around condo concessions as rental ones, those interviewed for this story say the sales incentive is being offered for a variety of housing types — from $400,000 homes in Dorchester three-deckers to multimillion-dollar units in Back Bay luxury complexes.

“Rather than reduce the price, try to dangle maybe a year of condo fees,” said Eric Sugrue, a principal listing specialist with Redfin. “The seller will pay that upfront or six months of fees or whatever gets the job done.”

If a seller is offering concessions …

It’s not one-concession-fits-all when it comes to negotiating condo fees.

There was a unit listed at the Residences at Mandarin Oriental, Boston that “was basically offering two years of condo fees,” said Dino Confalone, an associate director of sales with Gibson Sotheby’s International Realty-Cambridge and the regional vice president for Greater Boston on the Massachusetts Association of Realtors’ executive committee. “It just depends on the neighborhood, depends on the price point, depends on what the seller has listed it at, and the days-on-market accumulation. There are many variables.”

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Before you get your hopes up on scoring a year — or years — of waived condo fees, those interviewed for this story said buyers shouldn’t get too greedy. If sellers are offering concessions like waived fees, it usually means they aren’t budging too much on the list price. Further, competitively priced condos are still going to sell and probably without concessions.

There are still plenty of cash buyers in the market who don’t need concessions, especially in the luxury market of $3 million-plus condos, according to The Collaborative Companies’ midyear report.

But negotiating a concession can reduce the monthly financial burden for those who need relief the most.

“It’s particularly helpful as an advantage to make a deal for a first-time home buyer to help alleviate their first few years’ costs, because mortgage rates are higher than any of us would like,” Hawkes said.

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