Condos offer an affordable alternative to buying a house, at often half the price of a single family home. Before you buy one, you should be extra cautious.
In some areas, construction-defect litigation is rampant, sale disclosures are troublesome and new and confusing laws are often enacted, and frankly, you have to be a little tough to live in such close proximity with your neighbors... and their newborn baby.
Condominiums are typically high-density housing constructed as what's known as common interest developments. You own everything on your side of the walls of your unit. You become a shareholder in the remainder of the buildings, grounds and other facilities. As a shareholder, you are a mandatory member of the common interest development's homeowner's association, who is responsible for the upkeep and care of the building and grounds.
Condo owners collectively make the decisions that many single-family owners make themselves. The decisions involve everything from homeowner budgets that consist of hundreds of thousands of dollars to the rules, regulations and other operating guidelines.
The task of running the association is usually handles by a group of inexperienced volunteer owners who make up the board of directors.
If you are looking at purchasing a condo, follow these tips:
- Hire a real estate attorney with a proven track record in condo transactions. You need someone who is familiar with condos and the laws that govern them.
-Obtain a copy of all condo documentation before you close. In many states, the seller must disclose the condo's corporate and governing documents, newsletters, association meeting minutes and more. You may find the association slow to deliver, but keep pressing them.
-Review all bylaws, rules and other documents before you make your decision. If you don't feel like you can follow them, find another community or buy a single-family home.
-Pay attention to the details. Look at the age of the community, reserves studies, outstanding litigations, home owners' dues and assessments. Your attorney will explain what they mean to you financially.
-Get to know your neighbors. This isn't a month-to-month lease. You are stuck with these people for the duration of your ownership.
-Check out the association, especially the board of directors, to see how they manage the community. Look at the minutes of the last few meeting to see what issues were addressed. If the association uses a management company, do a background check on it.
Buying a condo is often a perfect solution for many potential home owners. They are usually a little cheaper, require much less upkeep and offer a community and great facilities. If you are currently renting, and love the lifestyle, but hate that you aren't building equity, look into a condo. If you are retired and no longer want to climb on the roof to clear leaves out of the gutters, consider a condo. But check it out thoroughly before you decide.
Copyright 2005 #1 Loans USA
Martin Lukac, represents, #1 Loans USA(http://www.1LoansUSA.com), a finance web-company specializing in real estate/mortgage market. We specialize in daily updates, rate predictions, mortgage rates and more