Buying a condominium seems like a no-brainer, right?. Condos tend to be affordable, enable a turnkey lifestyle and are often attractive options for both first and second homes. But, before your clients jump in as condo buyers, make sure you as their agent can answer their following questions:
- How much down payment is needed to purchase a condominium? The answer is that, of course, it depends. If the buyer can only get an FHA or VA loan, the condominium complex must be approved for this type of financing.
- What is the ratio of owner/non-owner occupants? This ratio can affect the buyer’s down payment requirements and/or the buyer’s financing abilities. Typically, most condominium complexes are financed in tune with Fannie Mae and Freddie Mac financing guidelines if 51% of the complex is owner-occupied.
- What are the rental policies? If there are rental policies (there may not be), are there procedures for approving potential tenants? Are there length-of-stay policies (one month, one week, etc.)? Are there additional time and expense fees on top of the rental fee?
- Are pets allowed? Number of dogs and weights? Cats? Exotic pets?
- What do the fees include? Usually electricity and gas are not included. Water may or may not be included. Are there fees for parking, pool, gym amenities?
- Is there any pending and/or anticipated litigation? This is a BIG one. Just one lawsuit can derail the marketability and/or the costs that current and future owners would be charged in “special assessments” to fund any pending/future litigation. And typically, buyers cannot obtain a mortgage if the condominium complex is involved in a lawsuit…this would then limit all transactions to cash buyers only.
- Are there any current/pending/future special assessments by the Home Owner’s Association on tap? This is also a BIG one. Best to talk with the HOA property manager and obtain a copy of the Association’s minutes to get a lead on this information.
- Are there any delinquencies in terms of dues and special assessments? Best to get a copy of the HOA budget to get a handle on delinquencies, and costs of maintenance, repairs, reserves, management, etc.
- What are the rules and regulations? Potential condo buyers need to know the rules book in terms of repairs, remodels, contractor access, access to amenities, exterior features, etc.
- What are the noise levels? Day and night noise levels are different. Sounds of TVs, music systems, footsteps, running water, etc. are different day and night. Is there soundproofing between the walls and floors?
