- How long will I be there?
Purchasing a condominium is like any other real estate purchase. You’ll need to own the Condo for at least a couple of years in order to recoup the closing costs. For shorter term needs, leasing may be a better option.
- What amenities are offered at the complex?
There are a broad array of potential amenities to a condo complex. Some are sparse with simple covered parking and a little landscaping. Others have grand work out facilities, picnic/barbeque areas, work out facilities, playgrounds, pools, common libraries, media centers, laundry facilities, etc. Determine what extras you are looking for before you begin your search.
- What are the current condo market conditions?
The condo market may be quite different from the single family housing market at any time. And like all real estate, the location of the condo will also make a large difference in the value of the unit. Study recent sales in the neighborhood and building you are seeking. Be sure to account for the differences in amenities between the complexes/buildings when studying these figures.
- What is the reputation of the building you are considering?
Different condominium buildings/complexes have different senses of community. There are many buildings that are principally owner occupied, while others have a stronger tenant base. Some communities have very stable populations while others see more turnover. For example, condo complexes closely located to a large university will likely have a younger population and frequent turnover as students move in and out each year. Determine the characteristics that are important to you and talk to some of the neighbors.
- Do the owners get along, or are they at each others throats?
Condominium ownership is a cooperative community effort. The common areas and structures of the community are supported by payments from all of the owners. By requesting copies of the HOA minutes, you can get a feel for how unified the residents are. No one wants to move into an atmosphere of strife and turmoil. Look to see if there are any hot issues that are burning in the community.
- How well funded is the HOA?
As an owner, you are ultimately responsible for the common maintenance of common amenities and structures. You will pay a monthly HOA fee representative of your “fair share” of these costs. In the event that major repairs or maintenance is required, a special assessment may be charged of all owners
if the HOA account does not have sufficient balance to cover the expense. You will want to make sure that the HOA is financially sound so that you don’t get hit with an immediate assessment upon buying into the property.
- What is the history of Special Assessments?
Request the Special Assessment history for the last ten years. Take a look at the patterns that have emerged. A well managed condominium should not see regular special assessments.
- Are you comfortable with the association rules and by-laws?
Closely review the rules of the community and make sure that your lifestyle matches with the community that they have developed. Talk with the condo association and the residents to see how closely these rules are enforced. This will be the community that you are joining. You will want to be sure that you like the structure set in place, and that it actually occurs.
- What are the parking arrangements for guests?
As an owner, you will have parking for your vehicles. You will be limited in how many vehicles you can park on the property. Generally, guests will be directed to specific parking places. In some complexes, that parking available for guests may not be either convenient or plentiful. Make sure you understand how parking works, and that it is sufficient for your lifestyle. This seems to be one of the leading sources of aggravation in a condominium community.
- Who actually manages the condo property, and what services do they provide?
Some condominium complexes are self-managed by the owners while others employ a professional management company. For owner occupants, the idea of self-managing can be quite appealing. Who has a more vested interest in the property than the unit owners that live there. For landlords, it is frequently easier to deal with a professional management company than with local owners. Along with association management, be sure to also explore association insurance. Make sure that in the event of catastrophe your investment is protected.
There’s a lot of talk regarding the purchase of foreclosure properties in the news right now, but exactly what does it take to purchase a foreclosure property? And how does this process differ from just buying a house that is listed for sale through a real estate company? This post will explain some of the basics behind the foreclosure process, and the risk/reward associated with purchasing in each phase.
This is the first phase of the foreclosure process. This period begins as the lender sends a Notice of Default to the homeowner. This is a legal document that informs the home owner that they are in default of the terms of their loan agreement and that the lender may elect to pursue foreclosure. At least 60 days must pass between this notice and the event where a public auction for the property is held. The Notice of Default is a legal, filed document and is accessible through public records search.
The Notice of Default is followed by a legal document called a Lis Pendens. This is the legal filing of the lender’s intent to foreclose. This is the point in the process where the government has recently contemplated placing a 90 day delay in the foreclosure process to allow the homeowner to recover before the foreclosure process continues. Again, this document must be filed and is available through public records search.
During the period of Pre-foreclosure, you must deal directly with the home owner (or their real estate agent). It is during this period that a “short sale” may occur. A short sale is the sale of the property for a price less than what is owed to the lender. The lender must approve the short sale, and although a cumbersome process, it can lead to the purchase of the property at a great price.
If the homeowner is unable to reach agreement with the lender for either a restructured loan or a short sale, the next step in the process is Foreclosure, which begins with a public auction. The property is held for auction on the “courthouse steps” on the first Tuesday of the month. This is a sealed bid auction process, and the property is sold to the highest bidder. The lender will usually submit a bid for the amount still owed on the mortgage, and is frequently the highest bidder.
This can be a great event for someone to purchase a property at a highly discounted price, but comes with significant risk. In most cases, access to the interior of the property is not possible, which greatly limits the buyer’s inspection of the property prior to purchase. This is also a cash sale, so unless you are able to write a check for the property, it may not be a feasible purchase point.
Following the auction, the lender frequently walks away with the property. The lender will then take the property to market, frequently through a real estate broker. In the MLS system, these properties are noted as foreclosure sales. The purchase of these properties works very much like the purchase of any other property for sale in the MLS, with a couple of distinct exceptions. First, these properties are usually sold on an “As Is” basis, meaning that no repairs are performed by the Seller (now the lender). Also, since the Seller has never occupied the home, it is impossible for them to provide an accurate disclosure about the properties history, so they don’t. It becomes incumbent on the Buyer to have the property inspected to determine it condition, and to make an offer appropriate to the physical condition of the property.
Buying foreclosure property can be a great way to obtain a home that has instant equity, but there are a number of heightened risks along the way. I strongly encourage you to seek the opinions of professionals in this process, it will make the whole process much easier, and the final outcome much more pleasurable.