Buying a condominium next year, advice sought

[steve2470]

I'll be buying a 2 bedroom 2 bath condo next year here in Florida. I know some of the basics about condo ownership, but it's a huge investment for me, of course. What do I need to know before I purchase ? TIA for your help, as always.

Steve

[Uben]

1. See if there's an owners association

Ask other condo owners what they think of the owners assc. Sometimes those things can be a real pain in the ass.

[MADem]

Find out how big a bite your insurance and condo fees will be ahead of time.

Get an idea of your property tax bite, too.

[MADem]

2. doubleclick....

[Raven]

3. When you buy a condo you're buying the whole complex, not

just your unit. Be sure the infrastructure is in good condition. Go to a condo association before you buy to see what the people are like and how the management functions. Unlike a single family home where you can ignore your neighbors if you choose to, in a condo you have to deal with your neighbors because you're all in it together. If you're on public water and sewer, fine but if you use a well and a septic system, be sure to have that checked out.

Have a formal building inspection...of the whole place as well as your unit. Read the condo documents to make sure there are not restrictions that you can't live with. Finally, hire a lawyer to take you through this. Many people feel that they don't need to do this and then they're sorry.

Good luck and congratulations!

[Kingshakabobo]

4. Don't use your realtor's mortgage company.

Especially if the realtor is also a mortgage broker. Florida has some hinky stuff going on down there where the realtor also acts as the lender (of course, we are starting to see that here in Chicago). I did a loan last year for a client who was about to close a real bad loan deal in Miami- they were basically charging the kid double everything (points, closing costs etc.) to cover the realtor's split.


I would check the association's foreclosure history as well as the rental/investment concentration in the building. Stay away from high rental/investment concentration. Stay away from buildings with foreclosures - a foreclosure in a building will sink EVERYONE'S values. From a lender's standpoint, high rises have always been a riskier investment - I think we are going to see why in the next few years. Personally, I would stay away from high-rise condos or very large projects. From my experience dealing with clients, the larger the building, the lager the bureaucracy and the likelihood you will feel like a renter in your own property.

Also, DEMAND to see the minutes from the board meetings for AT LEAST the last year. Scan them for talk of special assessments, litigation and other problems with the building. This is a must do. A lot of kinky shit goes on with sellers failing to disclose special assessments. I've seen people get hit with assessments from $5-40K after closing. My own neighbor tried pulling that shit when he sold his unit - we had an upcoming $30k deck/porch replacement pending that hadn't been "officially" voted on but everyone knew was going to happen.

[PetrusMonsFormicarum]

5. Buy within your means

Even today, with adjustable rate chaos and defaults everywhere, lenders only want to hear how much you make, not how much of that is already consumed by other life expenses.

Once you've decided the condo (and its association, and the neighbors) is right for you, get a loan that splits up property taxes into your monthly payment. The alternative is an annual bill that will crush you.

[soothsayer]

6. Prices are going to keep falling, so don't jump in too quickly.

Do find out the rules (is it too strict a place for ye? too lenient?) and see how stable the condo fees are (have they ever gone up? if yes, how often, and from what to what?)

[Liberal In Texas]

7. As in any real estate purchase, make sure you get a good inspector to find out

where all the problems are. I found out after buying one many years ago there were problems with the roof design and the complex was built with a type of pvc plumbing that was so defective that there were class action lawsuits against the manufacturer. This can save you from having to fork over large sums of money in special assessments after you own the place.

As mentioned above, talking to some owners about how they like the HOA and if there are any maintenance issues is a good idea.

Also find out the owner/resident ratio. A high number of rental units in a condo complex can make getting a loan harder and units where the owners have rented them out generally aren't taken care of as well.

[steve2470]

8. thank you !

All this advice is fantastic ! Anything else ?

[pnwmom]

9. If you're looking to retain value, find out what percent are owner occupied

as opposed to rented out.

Financing can be difficult to obtain on buildings that are largely rented out, and buildings that are mostly owner-occupied tend to appreciate more.

[CreekDog]

13. 70% or better owner occupied is a threshold

for lenders and overall suggests a place where owners have a stake in the property because they live there.

[pnwmom]

14. That sounds in line with what I've heard.

And the higher, the better.

[TheCentepedeShoes]

10. Read the condo docs

Verify that the reserves for things like exterior painting, roof, pool, etc are being adequately funded.
And after you move in - don't let anyone talk you into running for the board.

[elfin]

11. See if there are any lawsuits regarding the complex --

either by the complex against managers, city - or by owners vs. owners.

Decided against going the condo route because all but two of the many owners I know are costantly griping about the association.

Not enough reserve - board wanting to make outrageous assessments for purely decorative issues, power hungry board members with nothing else to do except make everyone else's life miserable etc.

did the math - and staying in my home or buying a smaller one is actually cheaper --no tax break and services are just a phone call away nd cheaper than the monthly maintenance fees and and any improvements are MY decisions.

[frazzled]

12. Avoid "cookie-cutter"--no matter how nice; check condo assn. reserves

We bought our first-ever condo several years ago, after thirty-plus years of being homeowners. The scary thing for us was thinking about its long-term value. There were so many on the market, we wondered how, if we ever had to sell, someone would choose "ours" from among the huge supply of others--most of which all seemed to be variations on the same theme. Location, location, location is still always a good bet. But beyond that, think of one or two unique things that will always be desirable to a buyer in your area: for us, it was a unique open floor plan and a large outdoor space (rare in the midst of the city). We felt someone would always be looking for these "bonuses," and it distinguished itself from so many other properties we saw.

Look at as many units as you can: you will know the "one" when you see it.