Home Buying in 53202>Question Details

Rmcnyc, Home Buyer in 53202

Condo Questionnaires and Building information in Milwaukee

Asked by Rmcnyc, 53202 Tue Mar 2, 2010

I am thinking about buying a Condo in Milwuakee and I am trying to get a Condo Questionnaire about the financial state of the Building. My real estate agent says that that is only available after I confirm an offer price with a seller. Is this true? Is there anyway to find out the Owner Occupancy Ratio of the building prior to getting into negotiations?

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Yes, if you can get the information from the homeowner or possibly one of the Trustees. If not, make an offer subject to satisfactory review of all condominium documents and financials. The owner should be able to secure the investor concentration information--this is crucial when it comes to financing.
1 vote Thank Flag Link Wed Mar 10, 2010
Not being able to review the financials before purchasing a condominium is like saying you must buy a car before you see it and/or test drive it. Except that purchasing a condominium before you review the financials is 100 times the risk. A review of the financials allows you to observe the healthiness of the reserve account, understand the maintenance fees, and gain a general idea of how well the Board of Directors runs the association. After all, the essential purpose of a condominium board of directors is to build, protect, and maintain the reserve account (Community Associations Institute, CAI).

Based on my international reserve study experience, I believe that the most important items to observe when looking for a condominium (or any common-interest property for that matter) are the financial situation of the reserve account, the annual contribution to reserves, and the occupancy percentage. For this reason, you must gain access to the financials and CC&Rs before you commit to purchasing a condominium unit. Every other aspect is secondary or preferential.

I opine that the real estate agent is doing an incredible injustice to you by withholding these key components from review. If you are set on placing an offer on this unit, include a contingency that requires an ‘adequate’ reserve account determined from a reserve study. This way if the condominium has underfunded reserves, you can walk away and avoid a potential future financial crisis. Remember, you have every right to know exactly what you plan to purchase including the physical assets, financial assets, board of directors, management, etc.

I include a link to a blog article I wrote about purchasing a condominium that has proper financials. Enjoy, and good luck with your search!

Sean Schutten
Reserve Specialist, RS
Civil Engineer, EIT
0 votes Thank Flag Link Fri Apr 9, 2010
When I have had buyers interested in condo units I have been able to either contact the listing agent to get this type of information or have received the condo documents. If you have a buyers agent they should be able to assist you in obtaining this information. It is important to understand the condo's policy on renting units and also understanding the percentange of units rented.

Keith Manson
First Weber Group
Certified Distressed Property Expert
Metro Milwaukee

0 votes Thank Flag Link Sun Mar 28, 2010
But how does the potential buyer even learn the name of the Management Company, if one doesn't have an agent yet? That is, when one is still "browsing." [Sorry to intrude here.]
0 votes Thank Flag Link Wed Mar 10, 2010
I agree with Scott, contact the management company. Your lender will have to go through the same process to determine if the unit is able to be financed.
0 votes Thank Flag Link Tue Mar 2, 2010
No that is not true, you can simply contact the management company that manages the condo association and request it from them. Good luck with your search
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Tue Mar 2, 2010
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