Condos are a great alternative to a residential home purchase, but there are some key differences that you should be aware of when purchasing one. Here are the 3 things you need to know before you purchase a condo:
- How Healthy is the HOA?
The seller is obligated to provide you with a Resale Certificate which includes a variety of information that will allow you to determine if it will be a good fit for you.
How much do you pay for monthly dues and what is included? What is the delinquent rate for dues? Is the complex managing its money wisely? Do they rely on just HOA dues or are special assessments a common practice?
- Reserve Study.
Most larger complexes have an independent report done by a consultant that forecasts future expenses and cash flows. This is a key indicator of financial health and the risk of having to pay a Special Assessment in the future.
In years past, many complexes had ongoing litigation against the builders for defects – this isn’t as common now – but it is a key piece of information as it can impact your financing, your ability to resell your unit, and can result potentially special assessments.
- What are the Community Rules?
Make sure you can do what you want in the unit!
- Rules for remodeling and decks/patios: These can control the types of flooring and types & colors of window covering allowed, and what is allowed on decks/patios, etc.
- Rules for how you use/what you can do in the condo & common areas: Smoking – can you smoke tobacco or marijuana? Rentals – is there a cap on the number of units that can be rented in the complex, is there a requirement that you live there for 1 year before renting it out, can you do Air B&B rentals or is there a minimum lease period? Parking – what is deeded to your unit and/or otherwise available for you and your guests (reserved spaces, carports, garages, etc. ? Noise – are you restricted from running your dishwasher or washer/dryer during certain hours?
- Is the complex “pet free” or can you have a pet – if you can have a pet, what types, is there a weight limit, are any breeds restricted, how many can you have, is there an off-leash area, etc.
- Available Financing Options.
If you are purchasing the condo with cash or conventional financing you can purchase almost any condo- but if you are using a FHA or VA program – you need to know if the complex is approved or if you can get a spot approval.
Article Published in the Woodinville Weekly Real Estate Section. Since 2017 The Blue Team has written the bi-monthly Real Estate Column sharing their expertise in this community publications. Sharing their Tips for Home Buying, Tips for Home Selling, Tips for Investors, Buying & Selling Luxury Homes, Real Estate Transitions (Including Relocation & Senior Real Estate Tips), and Equestrian Real Estate