How do condos work?

Asked by Jl Gallagher, 19002 Sun Sep 5, 2010

What should a firsttime condo buyer be careful about?

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Debra (Debbie) Rose’s answer
Debra (Debbi…, Agent, Livingston, NJ
Sun Sep 5, 2010
Aaron brings up a good point - I find that sometimes, especially first time buyers, think they will never have to pay anything towards major improvements in a condo development (such as new roofs or siding). The mistakenly thnk their HOA fees will cover everything. If a building or the units are older, there might very be future assessments to cover unusually high expenses for periodic improvements. You just need to be informed and prepared.

Also........... Make sure you understand exactly what the HOA fee covers, as this can vary greatly from complex to complex. Also, be aware of any limitations the association imposes (silly, but, as an example, we are not allowed to have any exterior hanging plants in our complex, and owner's commercial vans cannot be parked outside at any time, either!).

Good luck!
1 vote
Scott Godzyk, Agent, Manchester, NH
Sun Sep 5, 2010
BEST ANSWER
You need to find out how many rentals versus owner occupied, you should check to see if they are solvent by obtaining their current budget and a years worth of minutes from their condo meetings. you should review the condo docs and bylaws. I would also walk trhough and talk to the people who live there, simply ask them what the like or dont like. Ask if there are any problems they know of.

Good luck with your search, please see my blog on condos
1 vote
Aaron Schrei…, Other Pro, Leavenworth, WA
Sun Sep 5, 2010
Scott makes some great points. From my experience, do a lot of research on the age and repairs of the building. You should get this from the HOA minutes and meeting notes. You don't want to buy just before they repair the entire roof or siding (for example) but after would be great!
Web Reference:  http://www.amsinspection.com
1 vote
Mack McCoy, Agent, Seattle, WA
Sun Sep 5, 2010
The list is long, and incomplete.

First and foremost, it should feel like home. It will be the stage setting for the next several years of your life, at least, and it darned well better support your lifestyle, or else it's a nightmare.

After you've figured out that you'd really like to live there . . . among the most frequent condo problems are (in no particular order)

* poor budgeting, resulting in special assessments;
* low owner/rental ratios, which affect financing. Also, it affects livability. Not that renters are bad . . . but if you have 15% renters, that's almost six owner-occupants for every renter. At 20%, it's four to one; at 25%, three to one, at 33%, two to one. The end result is that the HOA winds up being the de facto property manager for these absentee landlords.
* EIFS, and other siding problems. The litigation is lengthy and unrewarding.
* House Rules. Every condo should have them; but, be careful. Banning 125# dogs may be beneficial; banning goldfish and canaries, not so much.
* Maintenance and services. Elevators are expensive, so are swimming pools; they have their benefits. On-site managers, concierges, door(wo)men, all beneficial; all cost money. In a small project, you may be expected to share the chores - wheeling the garbage and recycling to the curb, for example.

No condo is perfect, but no house is either, and neither are we! So, first and foremost - find a place where you'll enjoy living, then worry about whether you can make the details work.

BTW: TU to Scott Godzyk; whenever I show a unit in a condo complex, I will stall around waiting for someone to come in or out so "we" can ask them how they like living there. The technique is to ask, then shut up and listen; if they're shy, ask them one question at a time, and wait for the answer!
0 votes
Debra (Debbi…, Agent, Livingston, NJ
Sun Sep 5, 2010
PS if you are planning to go for an FHA loan, you need to make sure the condo complex is on the FHA approved list.

Check http://www.FHA.gov
0 votes
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