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    What You Should Know Before Buying a Condo?

    Condominiums are an attractive option for many buyers, particularly in booming neighborhoods. There are some fundamental differences, however, between buying a condo and buying a single family home. Below are 7 pitfalls that you should watch out for when buying a condo shared by John Scott Smith of the Federal Housing Administration:

    1. ALWAYS get a home inspection. It is not uncommon to hear that it’s safe to skip the home inspection when buying a condo. That statement is absolutely FALSE. There are a great many things that will be YOUR (the new condo-owner’s) responsibility, and an inspection is one of the best ways to make sure that what you are buying is in at least as good of condition as it appears. Right after you’ve spent a big chunk, if not most, of your savings is a much more difficult time to raise the capital to spend on replacing a water heater or a furnace. With an inspection, you can get a good idea if those items will last long enough for you to rebuild your cash reserves so that whey you do have to replace them, you’ll have the money on hand to do so. As a soon to be homeowner, keep in mind that things WILL break.

    2. Check for a history of special assessments. From time to time, condominium complexes will need to repave parking lots, replace sidewalks, re-roof, and maintain other common elements. If the association has enough money in reserves, then these items will be paid for out of those reserves. If the association does NOT have sufficient funds for these repairs, they have to bill their members for a special assessment in order to cover these costs. Find out the history of special assessments at the complex in which you would like to buy so that you know, before buying, if you will be responsible for additional money when these maintenance items come up. The history of current and past special assessments ties in very well with the next pitfall.

    3. Make certain that the condo association is financially in a strong position. Are all members current on their association fees? Look at the current budget and see if there is a copy of next year’s budget. Make certain that the numbers add up or there may be an increase in your association fees to cover any shortfalls. At what level are current cash reserves? Having more money in savings may indicate that the association is in a good position to manage future problems.

    4. Are pets allowed? Not all condo associations allow their members to have pets. This is not only an important question for pet owners, who will want to make certain that their pet types and sizes are allowed in the complex, but also for non-pet owners who may wish to be certain that they can get pets, later, or who may prefer to live in a pet-free building. There are not universal rules regarding pets, so check on this item before you close. (If this issue is very important to you, make certain to bring it up with your real estate agent so that they will only show you buildings that meet your required pet-status. This will help save you time.)

    5. Are rentals allowed in the complex? Same as with pets, this can be important both to residents who would like to have the option to rent out their unit in the future as well as to buyers who would like to know that all of their neighbors’ units are owner-occupied. Every condo complex will have rules regarding whether or not any or all of their occupants can rent out units. Make sure that the complex in which you are interested matches your own preference.

    6. Is the complex FHA approved? An FHA mortgage is a very specific type of mortgage. If your own financing will be FHA, you will need to make certain that both the complex and the specific unit that you would like to buy is approved for an FHA mortgage. To check whether a unit is FHA approved, you can search here in HUD’s very own database for the specific condominium complex. Even if you are not using an FHA mortgage, whether the unit is FHA approved will effect future buyers: when you choose to sell your unit, if the building is not FHA approved, buyers using an FHA mortgage will not be able to purchase your unit.

    7. Check the covenants for leaving any of your possessions outdoors. Do you like to grill? Ride a bicycle? Garden? These will all be addressed in the covenants of the condo association for the building. Make certain that your lifestyle will be accommodated in the complex that you choose. If having an annual barbeque is a priority, make certain that you can keep your grill on the grounds, or perhaps that there is a community grill for the residents to share. Some complexes will forbid you from keeping a grill on your balcony or patio, even if there is a privacy fence. Knowing this in advance makes certain that your choices will be

    Great information to have on hand! Remember that your real estate agent can help you in gathering all of this information.

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