5 Key things to consider when buying a condominium

When looking at purchasing a condo there are many factors to consider.  Here are 5 key areas you will want to examine before making an offer.

  • Documents you need to review
    • By-Laws of the community. These documents provide the rules and regulations enacted by the association to provide the framework for the associations operation and management.
    • Covenants, Conditions and Restrictions.  This document will describe any restrictions put on the use of your condo. They will spell out such things as whether you can have a pet, rent your condo, limitations on renovations, etc. This document should be reviewed carefully to be sure you will be able to enjoy the use of your condo as planned.
    • Copies of the Meeting Minutes for the most recent meeting and as many prior as available.
    • HOA Financial Statement. You will need this when analyzing the monthly dues.
  • Dues and assessments
    • How much are the monthly dues?
    • What is included in your monthly dues? This will vary from complex to complex.
    • Are the dues sufficient to cover normal operating costs? Obtain a copy of the financial statements to see how the dues are being spent. Do the monthly expenses seem reasonable?
    • Are there reserves? Is the HOA maintaining a “rainy day fund” to help cover unanticipated expenses? Is an amount being set aside for anticipated expenses such as roof replacement?
    • Are there any special assessment being levied or anticipated? When unexpected repairs arise or even for expected repairs, if funds have not been set aside, a “special assessment” will be made to cover the costs. These special assessments are levied against all owners. The formula for allocating these assessments can be found in the by-laws.
  • Home Owners Association (HOA)
    • Is the HOA self run or has a professional firm been hired to manage the association? Self run HOA’s may save money, but can present issues when owners do not use their condo as a primary residence and may live thousands of miles away.
    • Are there any legal actions currently being litigated? Are there any anticipated. Win or lose, legal actions can cost and that cost is shared by all of the owners.
  • Owner Occupancy
    • What percentage of the condominium units are owner occupied? Not to disparage tenants but there is a certain amount of truth that renters don’t take care of a property the same way an owner would. If the level of rental units is high it may also affect financing.
    • Having a high rate of rentals also impacts HOA participation from owners that may live a great distance away.
  • Amenities
    • What   amenities are offered by the complex, and equally important, how well are these amenities kept? If the pool is dirty or the playground it full of litter not only is the HOA not doing its job, but it could also signal owner apathy.
    • Parking. Be sure to consider if there is adequate parking for your needs and is it assigned parking. It can get old very fast if each time you have to hunt for a parking spot when you come home.

If you are in the market to buy a home or just considering your options, it costs nothing to learn more. Call or email Linda  for a free, no-obligation, no pressure consultation – 910.409.3519, Linda@LindaMehner.com.

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