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The best kind of Condominium Due Diligence--Knock on a few doors!!!

By
Services for Real Estate Pros with Topkins & Bevans-etopkins@topbev.com

Over the years, I have represented many people who have purchased Condominiums. I have become familiar with many "due diligence" procedures, including examining the Master Deed, By-Laws [Trust Declaration] and even Minutes of Trustees in those rare instances where the Condominium operates within that preferred standard of governance.

 Having described above some ways for an attorney to help a putative Condominium purchaser, I must fall back on the most successful measure I have seen to make the Condominium purchaser understand what he or she is buying, the good old-fashioned "knock on the door".

Anyone who purchases an existing Condominium without one (or more) "door knocks" is walking into an uncharted situation which can often lead to financial loss and emotional misery. What do I mean by the "door knock" you ask?

The door knock is that step the Buyer takes to find out what it is really like to live at "Dream House Condominium". You knock on the door of a neighbor in the building, introduce yourself as a potential Buyer, and then you rattle off these questions (there are probably many I have missed, and maybe my readers will fill these in for me in comments): 

              1. What is it like to live here? Do your neighbors respect your rights?

              2. Are the neighbors friendly? Do you know them? Could you trust them with your child, your dog, your goldfish?

              3. What do you do when there is a power outage? A noisy stereo?  A howling dog?

              4. Are you being kept informed by the Trustees of impending assessments, or plans for improvements? Are there reserves set aside for future contingencies?

              5. Do you feel that Condominium changing in any way in terms of mix of owners, or renters?

              6. Have you ever been a Trustee? Do you know if the "same old group" continues to manage things, year after year?

              7. When was the last time there was a common area fee increase?

              8. Do you attend Trustee's meetings? If not, why not?

              9. Do you attend the annual meeting of Unit Owners? Is it well publicized and are you encouraged to attend?

As I indicated above, there are many more questions you, as Buyer, or even Buyer's agent, can ask. You may say "why would these people speak with me"  You may wonder "why would these people give me accurate answers". The plain truth is that they may be speaking with their future neighbors. If they lie, or embellish, and they need to make eye contact with you in the hall, or on the elevator, it is going to be very uncomfortable for them. My experience is that most people do tell the truth, even though it may hurt them financially. In any event, these people behind closed doors hold the key to what really happens at Dream House Condominium, and they should be spoken to, and listened to,  as soon as practicable, in any event, before you plunk down that Deposit and move forward with your purchase. If you get answers you can live with, you have an excellent chance of finding Condominium ownership in that location, or building, pleasurable. If you do not get the answers you are seeking, move on until you find a situation where the answers meet your standards. Only then will Dream House Condominium provide the road to a dream and not a nightmare. 

 

 

Comments (7)

Virginia Hepp - Mesquite NV REALTOR
Desert Gold Realty - Mesquite NV Homes For Sale - Mesquite, NV
Mesquite NV Homes and Neighborhoods - Search MLS

Elliott - great advice for buyers, really good diligence.

This would not work here, knocking on doors is prohibited in Mesquite, we cannot even hang anything on doorknobs.

But I do tell prospective buyers to walk or drive around the neighborhood that they are interested in, Saturday morning, or weekdays in the late afternoon.  When people are around, smile and wave, then introduce yourself and ask about the neighborhood.

People usually are happy to tell you what they love or hate about it.

Apr 23, 2011 10:45 AM
Elliott S. Topkins
Topkins & Bevans-etopkins@topbev.com - Boston, MA
Massachusetts Real Estate and Title Atty

Virginia--Sounds like a great place to live. I think people will tell the truth about their living situation. It can't hurt to ask, no matter how the neighbor is approached.

Apr 23, 2011 11:01 AM
Glenn Roberts
Retired - Seattle, WA

Excellent ideas, Elliot. And good for single family homes as well. Ask the neighbors who they area nd when they do when ... Ask neighbors if they know each other. That will tell you a lot about the neighborhood.

Apr 23, 2011 11:27 AM
Elliott S. Topkins
Topkins & Bevans-etopkins@topbev.com - Boston, MA
Massachusetts Real Estate and Title Atty

Hey Glenn--Great to hear from you. I have found this technique useful for clients, and the Buyer's Agents whom I respect also will utilize this approach. you are correct; it works in sibgle family scenarios, too.

Have a great Easter

Apr 23, 2011 11:48 AM
Dennis Duvernay Broker/Owner
Hillview Realty - Northbridge, MA

Good idea Elliot...and may help for sellers agents too...I have a condo listing and welcome any buyer/agent to knock on some doors....I actually did this when I was listing it to get a feeling for the neighbors.

Apr 23, 2011 12:01 PM
Elliott S. Topkins
Topkins & Bevans-etopkins@topbev.com - Boston, MA
Massachusetts Real Estate and Title Atty

Dennis--It is certainly one way to get the real story, and if the word gets out about bad management, maybe the people running the show will start to listen.

Apr 23, 2011 12:08 PM
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Elliott - Good advice, instead of getting the "company story".  Another question I suggest asking: "How many owners are in arrears?"!  It's a huge problem in my area...

Apr 26, 2011 12:28 PM