What to know when buying a condo
Home Connection.BY THE COLORADO ASSOCIATION OF REALTORSBefore you buy, contact the condo/townhome board with the following questions:
1. What percentage of units is owner-occupied? What percentage is tenant-occupied? Generally, the higher the percentage of owner-occupied units, the more marketable the units will be at resale.2. What covenants, bylaws and restrictions govern the property? What grandfather clauses are in place? Ask for a copy of the bylaws to determine if you can live within them, and have an attorney review property documents for you.3. How much does the association keep in reserve? How is that money invested? 4. Are association assessments keeping pace with the annual rate of inflation? Smart boards raise assessments a certain percentage each year to build reserves to fund future repairs. To determine if the assessment is reasonable, compare the rate to others in the area.
5. What does and doesn’t the assessment cover – common area maintenance, recreational facilities, trash collection, snow removal?6. What special assessments have been mandated in the past five years? How much was each owner responsible for? Some special assessments are unavoidable. But repeated, expensive assessments could be a red flag about the condition of the building or the board’s fiscal policy.7. How much turnover occurs in the units?8. Is the project in litigation? If the builders or homeowners are involved in a lawsuit, reserves can be depleted quickly.
9. Is the developer reputable? Find out what other projects the developer has built and visit one if you can. Ask residents about their perceptions. Request an engineer’s report for developments that have been reconverted from other uses to determine what shape the building is in. If the roof, windows and siding aren’t in good repair, they become your problem when you buy.10. Are multiple associations involved in the property? In very large developments umbrella associations, as well as the smaller association into which you’re buying, may require separate assessments.This column, brought to you by the COLORADO ASSOCIATION OF REALTORS, is meant as general info. Consult your local Realtor regarding specifics about home buying or selling.
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