Courtesy of the National Association of Realtors.
This is an accumulation of different sources, and the National Association of Realtors.
It’s frighting how many buyers have very little knowledge when it comes to purchasing Condominiums! I might add, Townhomes, and properties located within a homeowner association offer certain perks, but it’s important to consider them in your decision process.
How much storage is available?
Some properties include storage lockers, but there may not be attics or basements to hold extra belongings.
How’s the outdoor space?
Your yard may be smaller than you’d find in a traditional single-family home, so if you like to garden or entertain outdoors, this may not be a good fit. But if you dread yard work, it may be the perfect option.
Are amenities important?
Many properties offer swimming pools, fitness centers, and other facilities that would cost much more in a single-family setting.
Who handles maintenance and security?
Property managers often hire professionals to care for common areas and perform in-unit repairs. Keyed entries and doormen may regulate access to your home when you’re not there (good news if you travel).
Are there required reserve funds and association fees? How much are they?
Although fees generally help pay for amenities and provide savings for future repairs, the HOA or condo board determines these fees, and you’ll have to pay them even if you’re not in favor of the improvements.
What are the association rules?
Although you have a vote on future changes, association rules can dictate how you use your property. Some condos prohibit home-based businesses; others prohibit pets or don’t allow owners to rent out their units. Read the covenants, restrictions, and bylaws carefully before you make an offer.
What’s the average vacancy rate?
It’s never too early to be thinking about resale. The ease of selling your unit may depend on what else is for sale in your building, since units are similar.
How many units are owned by investors?
Some lenders require a certain percentage of the building to be owner-occupied and may not be able to offer you financing if the ratio is too low.
Can I meet other residents before making an offer?
You will share space and decision-making duties with your neighbors when part of a homeowner association, so it’s important to make sure you can work together. If possible, try to meet your closest prospective neighbors before you decide on a place.
QUESTIONS TO ASK THE CONDO BOARD!
Before you purchase a condo, you should have an attorney review property documents for you. However, you should contact the board yourself ahead of time. You’ll learn how responsive and organized its members are and be alerted to potential problems. Its very difficult to get cooperation from the management and the board. Rely on your Realtor to pull most of these resources for you!
How many units are owner-occupied?
Generally, the higher the percentage of owner-occupied units, the easier the condo will be to resell.
What covenants, bylaws, and restrictions govern the property?
Carefully read the bylaws to determine if you can abide by them. Also, find out if there are grandfather provisions that allow current owners more rights than you would have as a new owner, such as the ability to rent out your unit.
How much does the association keep in reserve?
Ask how the money is being invested.
Are association assessments keeping pace with the annual rate of inflation?
Smart boards raise assessments a reasonable percentage each year to build reserves for funding future repairs.
What does the assessment cover?
Ask specifically about common-area maintenance, recreational facilities, trash collection, and snow removal (if applicable).
What special assessments have been mandated in the past five years, and how much of that was the responsibility of individual owners?
Some special assessments are unavoidable. But repeated, expensive assessments could be a red flag about building conditions or fiscal policy.
What’s the turnover rate?
This will tell you if residents are generally happy with the building.
Is the condo building in litigation?
Obviously, this is never a good sign. If the builders or owners are involved in a lawsuit, reserves can be depleted quickly to pay legal fees.
What other projects has the developer built?
Try to visit one, and ask residents about their perceptions. Also, request an engineer’s report if the building has been converted from another use.
Are multiple associations involved in the property?
In very large developments, umbrella associations also may require separate assessments.