Are you looking for a slamming deal on a condo?
If that's your focus, you could be making the biggest financial mistake of your life.
Buying a condo is an excellent way to move from renting to owning your own home. In the Greater Washington D.C. area, there are thousands of condos for sale but not all condo associations are well run and in good financial shape.
So how can you avoid making a major mistake when buying a condo?
- Take time to review the condo associations financials. In Virginia, you have 3 days to review condo and HOA documents. In Maryland, you have 7 days to review condo docs and 5 days to review the HOA documents. Finally, in Washington D.C. you have 7 days to review the condo docs and 5 days to review the HOA documents. The last thing you want to do is buy into a money pit. Read the meeting minutes and review the treasury report. Check the yearly balance. Are there pending lawsuits against the condo association? Are there special assessments planned for the community? Do they have a reserve fund? Are there plans for the condo fees to increase? What does your condo fee include?
- Review the CCR's conditions, covenants, and restrictions. When purchasing a condo, you are buying into a community. The CCR's are rules set to govern the common areas. You have to feel comfortable with the rules since you will be fined if you break them!
- Is parking included with the condo purchase? Where can your guest's park? This is a really big deal! If you have two cars and only one dedicated parking spot, where will you park your other car? When you have visitors, do they have a place to park their car?
Recently, I was meeting home buyers at a townhouse in a small community. The parking situation was terrible! All the spaces were assigned with only 3 guest spots available. Since these spots were taken, we had to part in a neighborhood several blocks away and walk to the townhouse. Very poor planning by the builder and a real pain for residents.
- Walk around the condo community. Are all the buildings and grounds in good shape? The picture above shows rot and termite damage on an exposed post. This wood had been wrapped but obviously, water got in and the entire building was being repaired. If the neighborhood is large, this can be a very expensive fix. If you see this happening at a condo association, ask if there has been a special assessment to cover the cost or if the condo fees will be going up to pay for the work.
- Talk to neighbors in the community. Do they like where they live? Are they pleased with the amenities? Are there many renters or condos in foreclosure? You can also ask your buyer agent to help gather information on foreclosed and short sale properties in the condo association. Too many of these in a community can stress the other condo owners financially.
When you buy a condo, you buy into the condo association. Trust your gut and do your homework before you write an offer. And remember, if something seems like it's too good to be true, then it probably is.