5 questions for condominium buyers The condominium market is heating up. According to the National Association of REALTORS®, condo sales across the country have climbed steadily since 2011. In the West, sales in June 2014 were up 7.1 percent year over year. Prices are up over last year, too, by 3.2 percent nationwide – and as much as 7.1 percent in the Midwest and 10.2 percent in the West. Heres what you need to know before you buy a condo: Pros: • Affordable homeownership • Access to amenities (e.g., swimming pool, gym) • Low maintenance Cons: • Slower appreciation and more days on market • Lack of privacy • Monthly association fees and assessments 1. What are the rules? All condo associations have them. Are they too stringent to live with comfortably? Or are they so relaxed that the community risks becoming run down? 2. What is covered? The association collects fees and carries an insurance policy. Does the association pay for a leaky roof or does the owner? Who is responsible to pay for repairs if a pipe bursts in the wall between units? Who covers the cost of building code upgrades? What additional insurance is necessary beyond the associations policy? 3. What percentage of residents are renters? Renters might not give the same care to a property that the owner would, and a high percentage of renters in a condominium community might limit the types of loans available. On the other hand, an investor will want to know if renting is allowed. If so, does the owner find the tenants or the will the association do it? 4. Is the association on solid financial ground? The older the condominium, the more money the association should have set aside for maintenance and repairs. Read the association meeting minutes to find out if there are outstanding maintenance issues that could exceed cash reserves. How many owners are delinquent on fees? Does the association have any liens against it? Lawsuits pending? 5. Whos the boss? Is there a professional management company or do the owners manage the condominium themselves? Condo ownership can offer advantages, but it can be a tricky transaction. So I encourage you to have a real-estate lawyer review the associations bylaws and to speak with a Mortgage Advisor who understands the intricacies of loan requirements for the various types of condominium communities. Sources: 1.5 tips for condo buyers, by Adam Verwymeren, FoxNews 2.Condo shopping? Ask these 7 questions before you buy, by SmartMoney 3.Pros & cons of buying a condo – is it worth it?, by Heather Levin Call Insook for more information. 714-743-0003
Posted on: Sat, 16 Aug 2014 02:22:12 +0000
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