Is Your Condo Association Hurting Your Sale?

By
Real Estate Agent with RE/MAX Andrew Realty Serfvices

If you want to sell a condo in today’s real estate market, there are 3 items to check with your condo association before you put your condo up for sale:

 

Selling a condoOwner occupancy – Most buyers today don’t have a 20% down payment. If you want to open up your condo to the largest buyer pool, then your building will need to have at least a 70% owner occupancy ratio. Although it is possible for a buyer to get financing with a lower owner occupancy ratio, the buyer will need to have at least a 20% down payment.

Budget – at least 10% of the yearly budget needs to be put into the separate reserve account each year. If your association doesn’t do this, then a buyer will need at least a 20% down payment.

Fidelity Bond – if your association has more than 20 units, the association needs to have a fidelity bond.

It’s difficult as a single owner to affect the number of units that are owner occupied in your building. However, if your association doesn’t put at least 10% of the annual budget into the reserve account or you have more than 20 units but no fidelity bond, bring these to the attention of the trustees so that they can be voted on and changed. While it is possible to sell a condo to a buyer with at least a 20% down payment, the majority of today’s condo buyers are first time buyers with a 5-10% down payment. Don’t let your condo association hurt your chances of a sale – go to your meetings and make sure your association has all of the requirements in place before you put your condo on the market.

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Rainmaker
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Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA
LandlordWhisperer

HOAs are a GOOD value IF the HOA management is GOOD.  I no longer take condo units in HOAs that are SELFmanaged as there are way too many ways that owners and residents and their $$$ can be abused

Jun 29, 2011 08:59 AM #1
Rainmaker
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Jill McTague
RE/MAX Andrew Realty Serfvices - Medford, MA
DebOnTheWeb & Associates - Medford, MA Real Estate

Thanks for your comment Wallace.  In my marketplace,, there are many small (2 or 3) unit condo associations and these are all self managed.  Sometimes I find these are better run than some of the "professionally" managed associations.

Jun 29, 2011 11:38 AM #2
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Rainmaker
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Jill McTague

DebOnTheWeb & Associates - Medford, MA Real Estate
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