Top 10 questions to ask before buying a Boston condo
by Talisa Rafferty.
With record low rates and affordable prices, the dream of homeownership is now within reach for many people who never would have thought of purchasing. Some people, however, don't dream of picket fences and lawns, and are quite used to not having to do yard work. Depending on your home ownership dream, a condo may be right up your alley. Before offering to purchase a condo, there are some times that you should take into consideration. These are the questions that I get answered for my buyers before they make a purchase, as well as the reason why I ask them.
1. How much are the monthly condo association fee’s and what do they cover? Some condo fees can include heat, outside maintenance, and even cable. If a condo fee is on the high side, but includes heat and amenities such as a pool, clubhouse or gym, you could be better off than paying a lower fee with no perks.
2. How much does the association have in reserves? This is important to know if any unexpected costs come up. If there is a massive snowstorm, do they have enough reserves to quickly replace a damaged roof or would they need to call a special meeting where all of the owners would have to agree on special assessments before they can proceed?
3. Are there any contemplated special assessments in the near future? This will tell us if something has happened that the association is planning to have owners pay for. I recently showed a condo for sale in Salem, MA that had a $300.00 a month special assessment in addition to the $275 condo fee for the next two years.
4. What are the specific rules of the condo? Asking this question will let you know a great deal about what you can and can't do. For instance, we can find out if you are allowed to rent the condo out in the future if you decide to purchase a Single Family residence or move. The rules will also state if pets are allowed.
5. How is the association managed? It is good to know if the association is professionally managed by a management company or if it is self run by the owners. Self run associations can have lower fees, while professionally managed associations can often mean that you don't have to be involved much.
6. Is there any pending litigation? A good association will not let owners skip out on fees, so don't be afraid if the answer to this question is yes. On the other hand, if there are suits filed against the association I would get more details.
7. How many of the units are actually owner occupied vs. investor owned? The owner occupancy rate can be an issue when looking at financing options. Lenders are more likely to finance a unit with a higher occupancy rate. I had a client that wanted to purchase a condo in Lynn last month. It was a 24 unit building and 8 were owner occupied. Her lender required at least a 55% owner occupancy rate, so she was not able to purchase the unit.
8. What is the association fee delinquency rate? If there is a substantial amount of delinquent fee’s there could be a potential issue with foreclosures to come. Many people who are facing foreclosure stop paying the condo fees.
9. As an owner, do you own certain common areas, ie., parking spaces, decks, storage spaces, or are they considered common use spaces? You want to know what you are buying with your unit. If there is additional space, make sure to check it out and know what you are getting into. Is the storage space for your potential unit in the deepest, darkest bowels of the basement? If the parking spot close to the unit?
10. What does the master insurance policy cover? Each condo association must have a Master insurance policy; this is good to know, so that you know what your personal insurance policy should cover.
Once you have the answers to all of these questions, you can make a sound and informed decision on the condo of your dreams.