Thinking About Buying A Condo?
10
Questions To Ask Before You Buy A Condominium
The HomeTeam will get the answers to the following questions BEFORE you buy your condo.
1. What percentage of units is owner-occupied?
This is a question your lender will also want answered. Lenders have been become skittish about making loans for condos in new developments. Along these same lines ask what percentage is tenant-occupied? Generally we find that in developments with more owner-occupied units, the units will sell faster and for more money.
2. What covenants, bylaws, and restrictions govern the property?
What grandfather clauses are in place? You may find, for instance, that pets are banned for those who buy a property after a certain date, while those who bought earlier may have them. Always obtain a copy the bylaws. The HomeTeam will actually make your purchase of the condo contingent on their satisfactory review by you and your attorney. Your attorney should also review the master deed for you.
3. Your lender will also want to know the amount of money the association keeps in reserve?
It's also a good idea to find out how that money is being invested, if at all?
4. Are association assessments keeping pace with the annual rate of inflation?
Smart boards raise assessments a certain percentage each year to build reserves to fund future repairs. To determine if the assessment is reasonable, compare the rate to others in the area.
5. What does and doesn’t the assessment cover — common area maintenance, recreational facilities, trash collection, snow removal?
There may be separate assessments that you don't know about such as for use of the pool.
6. Going back five years note what special assessments have been enacted?
There will almost always be some special assessments, but a steady stream of expensive assessments could be a warning about the overall quality of the construction in the development or the board’s fiscal policy.
7. How much turnover occurs in the development?
8. Are there any pending lawsuits?
If the builders or homeowners are involved in litigation, reserves will be depleted and special assessments will be levied..
9. Who is the developer of the condominium project?
Find out what other projects the developer has built and visit one if you can. Ask residents about their perceptions. Request an engineer’s report for developments that have been reconverted from other uses to determine what shape the building is in. If the roof, windows, and bricks aren’t in good repair, they become your problem once you buy.
10. Are multiple associations involved in the property?
In very large developments, umbrella associations, as well as the smaller association into which you’re buying, may require separate assessments.
See Also:
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