From REBAC Staff | ABR
Condominiums, or simply condos, are an appealing option for homebuyers who prefer owning over renting but want to keep home maintenance chores to a minimum.
Suppose you’ve decided the pros of owning a condo outweigh the cons, and you’re ready to buy. In that case, your next step is to find an Accredited Buyer’s Representative who can help you identify the best property and guide you through the buying process.
Buying and owning a condo is different from purchasing a single-family home. These questions can help ensure you’re doing your homework and don’t overlook any fundamental concerns.
1. What rules and restrictions does the association impose?
Make sure you can use your condo as desired. For example, dog owners should make sure pets are allowed. On the other hand, If you don’t like listening to loud parties, you may appreciate restrictions on the number of guests or quiet hours.
Ask for copies of any legal docs, potentially including the association’s bylaws, covenants, conditions, and restrictions. Please read them carefully!
2. What can you learn from the board’s minutes and financial statements?
Request copies from the past year to determine: What projects are already in progress or planned? How much does the association have in reserves? Are any special assessments planned?
These questions and others will help you gauge the association’s financial health. Consider asking pointed questions about your findings If any concerns arise in your research.
3. What is the monthly association fee, and what does it include?
Operating and maintaining a building’s common elements and amenities costs money. Therefore, condo owners should expect to pay their share of this expense.
However, it’s also vital to know what the fees do and don’t include. For example, some buildings’ fees include all utilities while others require owners to cover their own power, water, internet, etc. Similarly, you may need to pay a separate parking fee if you own a car.
4. Who sits on the board?
Condo associations are exclusively comprised of volunteer members who donate their time and may have limited knowledge and experience in managing properties. The minutes may provide helpful clues about the board’s skills, priorities, and decision-making processes.
5. Does the association use a professional management company?
Management companies can play a valuable role in improving property oversight. However, the industry is not regulated in most states, so it’s advisable to research a company’s reputation and credentials.
6. What is the ratio of owners versus renters?
Since renters don’t have a personal ownership stake, they may be less dedicated to property upkeep. In contrast, a high owner-occupancy rate can help protect your investment. Additionally, your lender may not approve your loan if the ratio of owners to renters is too low.
7. What inspections should you complete?
Including an inspection contingency clause in your purchase offer is always recommended. Generally, condo inspections are limited to the unit’s interior and don’t include common areas like roofs, crawl spaces, or parking garages.
That may be fine if the building is large and well managed. But for smaller properties, you might benefit from a fuller inspection of the building and shared mechanicals, like the HVAC system.
Be an informed buyer!
Admittedly, it takes time and effort to research condominium properties and the many unique issues that may arise. Your buyer’s agent can help guide your decisions, but ultimately this responsibility rests on your shoulders. The more you learn, the more likely you’ll be thoroughly satisfied with your new home!
