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 thatÂ 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,
andÂ 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."Â 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
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