For many potential homeowners, purchasing a condominium is the perfect solution: it's home ownership without as much hassle as owning a single family home. But finding the right condo requires a little extra effort than is often necessary with other types of homes. What should you know about condo ownership before buying? Here are 5 questions to ask.
How Is the Association Run? Condos are generally run by an association that oversees maintenance of common areas and buildings as well as other group amenities. Ask to see the association's minutes to see how it well it is operating. Potential red flags include maintenance or repairs that continue unresolved from month to month, inability to come to decisions, and frequent disputes with residents.
How Is the Building Insured? Unlike traditional houses, condos are often part of a shared building. You should fully understand your responsibility to insure and pay for maintenance or repairs to your section. But you should also know what is covered in the common building structure and how well it's protected in case of damage from other tenants or emergencies like storms.
What Are the Rules? Each condo association has its own unique set of rules by which residents must abide. Ask to see the condo rules before committing to any real estate transactions. Decide whether these rules will be acceptable to you and how they fit into your own ideas of enjoyable living.
What Reserves Are Available? The condo association should have money building up through the collection of monthly fees. These fees are used for maintenance of the building and for emergency repairs. Look at association financial statements to determine how much maintenance has been done in recent months and how well prepared the association is for future work. Lack of dues paid in a timely manner could cause extra obligations to fall on homeowners like you.
Is It Approved by Fannie Mae? Government programs like Fannie Mae have done some of the research you need to have to buy a condo with confidence. These lenders generally don't deal with loans for units that don't meet their standards. These standards include things like ensuring decent reserves, having a majority of units owner-occupied, avoiding late dues, and having no dangerous pending litigation.
Answering these five questions as you tour condos will help you narrow down your real estate search to units that are likely to be reliable, safe, and enjoyable. A real estate services professional in your area can help you do so.