Have you thought about buying a condo? Maybe the condo is in an up-and-coming neighborhood and you want to buy before the prices start to skyrocket. Or maybe you are tired of not being able to paint your apartment walls and are ready to take the next step towards home ownership. Or maybe you are just ready to downsize your home.
Whatever the reason, a lot of people really like living in condos. You often have a pool and gym, along with safety equipment and the ability to own a home without having to worry about all the care responsibilities.
While there are pros and cons to buying a condo, it is not the same process as buying a home. There are important aspects to consider, and it is important that you know the right questions to ask.
Questions to ask yourself before buying a condo
So what should you ask your real estate agent, your future neighbours and the homeowners association before buying your condo? Here’s a starter list you can use as a guide to get started.
1. What are the biggest complaints?
What complaints do people bring up at condo board meetings? Get minutes from recent meetings or talk to current owners. If the association isn’t rushing to fix it, you’ll want to find out before you commit to living there.
2. How is the management team?
You will want to personally interview the condo manager (i.e. the one who is there full time). Also, talk to your neighbours about management. A lousy manager can make living in a condo an exhausting experience.
Some condos are self-managed. That is, there are no property managers and the neighbours meet to make decisions together. The good side of this is that it often means that the monthly fees are much lower than in professionally run communities. While self-management does work in some cases, think carefully before settling in a community like this. You have to live next to all these people… do you really want to make a community live with them too?
3. Is there any storage space available?
Some condos offer residents personal storage space. Your condo likely won’t have an attic or garage (unless you’re in a townhouse), so ask if additional storage will be provided for bikes, winter skis, and luggage.
4. What does the insurance cover?
Make sure you get a copy of the condominium association’s insurance policy. Find out exactly what’s covered, including the cost of building code compliance (if it’s an older building). Also make sure that the estimates to be reconstructed are accurate and not minimised or out of date.
If the policy is confusing, it may be helpful to give a copy to your own insurance agent so you can go through it together.
It is also important to check if your policy will cover your personal belongings in the event of a roof leak or building fire. Otherwise, we recommend that you consider purchasing a policy on your own (which will be another monthly expense).
5. Will I have to move in the next five years?
Condos are generally slower than single family homes. And with the housing market already collapsing, it may take some time for prices to recover enough to make a profit if you decide to sell. While the future is impossible to predict, make sure you really want to live in this community before you decide to buy.
6. Do I understand the monthly membership fees correctly?
The condominium association fees are calculated based on how many units there are, what it costs to maintain the property (short and long term), whether the community is professional or self-managed, and funds set aside for litigation and major repairs.
Get a breakdown of the monthly fees you will be responsible for. Make sure that you can actually afford that extra payment and that you understand what you are getting for that payment. And remember that the condominium association fees are not tax deductible like your mortgage.
You should also take a close look at the Repair Fund. Each association of co-owners must reserve a certain portion of the costs for major repairs. If the complex is less than 10 years old, the repair fund should have 10% of the cost of repairing major items (i.e. roofs, tennis courts, etc.). If your community is between 10 and 20 years old, the Fund should have 25 to 30% or more for major repairs. And if the community is over 20 years old, you have to fund 50%.
Many communities promise their residents “ultra-low fees”. Be careful. While this may sound appealing, it probably means that the community is not funding its reparation fund as it should; If the roofs need to be replaced, you and all residents could be seriously affected by a large bill.
Also find out about delinquency rates on monthly payments. When other homeowners don’t pay their monthly fees, it often leaves everyone with the bag. Good communities will have a delinquency rate of 15% or less.
7. What are the rules?
Does this community accept animals? Can you rent your unit if you need it? Will you be able to plant a flower bed?
Review the community rules line by line. Make sure the condo doesn’t have any rules you just can’t follow.
8. Are there any disputes?
Condo communities can often be fraught with drama and, yes, litigation. The owners are suing other owners as well as the management team or the developer. Make sure there is no past or ongoing litigation in your community, as this is often a sign of a poorly managed community or full of disputed neighbours.
9. Is this MY porch?
Many condos offer residents porches or balconies with their units. Make sure you take a close look at the Oneness Scripture and the Main Scripture. The porch can be attached to your unit, but is it really yours, meaning it’s your responsibility to fix it as it ages or breaks down? Or do you own it in the sense that it belongs to you, but the community actually maintains it?
Buying a condo is no easy task. There are a lot of important things to consider that you don’t have to worry about with single family homes. This is why it is important to enter the process knowing what to look for and what to ask for.
Have any of you ever thought about buying a condo? Or do you already have one? What questions would you like to ask yourself before buying?