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Jeffrey M. Nocera's Blog

By Jeffrey M. Nocera | Home Inspector in Bethlehem, PA
  • Condo Conundrum

    Posted Under: Market Conditions, Home Buying, Home Selling  |  May 7, 2011 3:41 AM  |  553 views  |  No comments

    Buying a condo is not exactly the same as buying a home. Not only could you have adjoining walls with your neighbors, as well as other physical elements that are different from a traditional home, the entire process that you need to go through to make your decision and obtain a loan may also differ.

     

    One of the things that come with condo ownership is the Homeowners Association, or HOA. There may be conditions, covenants and restrictions or CC&Rs that list things that  the condo owner must comply with in order to reside there. Failure to comply with these conditions may result in legal action. Research the HOA and sit in on a meeting if possible. Talk to the neighbors to see if they are happy with how the condo is managed. Ask about noise, services and other issues. Review the bylaws to determine what is actually covered by the HOA. You can also ask to obtain the minutes from recent board member meetings, and find out how much dues have increased in the past few years.

     

    Purchasing a condo may be more difficult than purchasing a typical home. Lenders have become cautious regarding loans. They usually require that a certain percentage of the units have people living in them, or are, as they call it "owner occupied." Another restriction may be how many condos are allowed to be owned by one investor. Usually, lenders do not want one person to own more than 10% of units in a building. Lenders may also have restrictions on how many of the units have already been sold. Some lenders require at least 90% of the units sold in order to offer financing.

    Condominiums can be a good investment for the right buyer in the right location when times are tough, though they can be harder to buy and sell than a standard single-family home. Before purchasing a condo, research the HOA, CC&Rs and any tax and insurance situations. Also, be sure to get a real estate agent and a loan officer that has a lot of condo sales experience, as the issues surrounding such a purchase are not as simple as those with a traditional single-family home.

    Information provided by Jeffrey M. Nocera, Proprietor of ProHome Asset Inventory. Visit our website at www.prohomeasset.com for additional reasons you need a home or business inventory. You may also email us directly at info@prohomeasset.com.

     

     

 
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