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Jeff Mcdowell's Blog

By Jeff McDowell | Broker in Scottsdale, AZ

Buying a Condominium in Cave Creek, Carefree, Scottsdale Arizona

Scottsdale, Cave Creek, Carefree Condominiums for saleScottsdale Condominium

Condominium Ownership in Cave Creek, Carefree, Scottsdale Arizona are convenient forms of  "lock and leave" ownership.  You own your unit but the common areas, which include the entire project with the exception of the airspace contained inside the unit are owned commonly with the other owners in the project.

The beauty of this form of ownership is that you pay a "Homeowner's Association" to manage the grass, the interior roads, the exterior of the building, the roof....the list goes on.  Pretty much all you have to do is show up and enjoy the lifestyle.

While you may have electrical or gas bills paid individually with the ownership of the unit, the remainder and in some cases the water, are shared either equally or proportionately by all owners.

The purchase is easy, but beware, financing can be an issue.

At Coldwell Banker Residential Brokerage Scottsdale Arizona we actually have an inhouse lender that will handle the financing for condominium purchases.   Recently, we had a briefing on the latest condominium regulations relating to financing.  Here is how it goes....

 

Lenders will require the borrower to pay for the necessary condo information during the processing.  This can include:  a completed Condo Questionnaire, a copy of the Annual Budget and a copy of the Master Homeowner's Insurance Policy.  The questionnaire  itself can cost anywhere from $0-$450 depending upon the management company.  Some management companies charge more than that  just for copies of the Master Home Owners Insurance and the Annual Budget.  This can be a VERY LARGE UP FRONT COST.

To qualify for FHA, VA or FREDDIE MAC funding certain items can REDFLAG a loan, making it unsellable to one of those entities....and the lender wants to be able to sell the loan to a federal program as they receive a fee for the loan and do not have to utilize their own funds to "book" the loan in house.  To you, the consumer, lower rates will result from being able to sell the loan to a federal entity.

So what will compromise a loan from being sold?  Here are the REDFLAGS.

  • High Investor concentration (over 40% non-owner occupants)
  • Homeowner's Associations involved in ongoing litigation
  • Commercial Space within the project (20% of the project is a maximum)
  • New construction or recent conversions
  • Project Names (yes, the name can trigger review)
  • Excessive Questionnaire Fees
  • Uncooperative management company

So how do you do your homework in advance?  Or better said, your Realtor should know how to do this.....if they don't you don't have the right Condominium Realtor.

  • Check the FHA Approved Project List
  • Check Maricopa County Assessor for the ratio of investor units
  • Ask the Seller to provide a Master Insurance Policy
  • Ask the Seller for the latest Annual Budget
  • Ask the Seller if they can provide a filled out and signed Questionnaire for free
  • Research the County Records to determine if the Homeowners Association is involved in Litigation

Or better yet, utilize the services of a Realtor with experience selling Condominiums in Cave Creek, Carefree, Scottsdale Arizona, and yes, I have that experience....give me a call!

 

By:  Jeff McDowell

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