Buying a condominium brings with it different considerations and involves things that buying a single family home does not. Below are 5 things to keep in mind if you're in the market for a condo.
1. Get all the documentation and allow enough time to review
Buyers are supposed to receive all Home Owner Association financial documentation during the inspection period. Ask you realtor for a complete documentation package as soon as you enter your escrow period to allow enough time to thoroughly read and understand all the data provided.
2. Take a close look at the exterior
Make sure all community areas including pools, fitness rooms, balconies, paint, landscaping, parking areas, stairways and roofs, are in good repair. Although the HOA should be responsible for the majority of exterior maintenance, a large number of issue should be a red flag.
3. Know your association fees
Most condo communities include a fee that is paid on a regular basis, whether that be monthly or annually. Fees vary significantly and play a part in whether or not you can afford the property as your lend will factor the fees into your monthly debt.
These dues cover common expenses like maintenance and insurance. but you should know specifically what your fees include and what they don't. Do fees cover any exterior maintenance? What do they exclude?
Its wise to understand how these fees are allocated and if any goes into a reserve for large repairs, such as roof replacement. Buying into a community with a healthy reserve fund will generally ensure most major repairs are covered.
4. Review the rules
Since the community is a group of people living in close proximity, there are set regulations on pets, renters and a variety of other established rules. Be sure to read and understand all the rules.
5. Check the financial statement
Look in detail at where the association is spending their money. As a rule, about 2/3 should be spent on basic operating expenses such as water, lights, landscaping and other maintenance while the remainder should be placed in a reserve for larger, longterm repairs.
Do expenses exceed revenues? Find out why and how the HOA plans to rectify this. Its best to know in advance if a special assessment or an increase in dues will be the solution.
If you're in the market for a condo or townhome in Marin or San Francisco, The Costa Group can guide you through the process and assist in finding you a wonderful home in a community perfect for your lifestyle.