First Time Condo Buyer

  • Joeyphx444

    Posts: 2382

    Apr 28, 2012 7:00 AM GMT
    Anyone own or have bought a condo b4?? Any advice would be appreciated
    Just general tips since I know every market is different
  • Webster666

    Posts: 9217

    Apr 28, 2012 10:51 AM GMT
    I bought a condo, many years ago.
    And, it's the best investment I have ever made.
    You will love the mortgage interest income tax deduction, every year.

    BEFORE you buy:
    --Find out how much money the Homeowners' Association (H.O.A.) has in reserves (to pay for major expenses, such as roof repair, painting, etc. You don't want to get hit with an assessment to pay for these expenses, on top of your monthly H.O.A. dues.
    --Find out how much the monthly H.O.A. dues are. Can you afford that, in addition to your mortgage payment and the property taxes ?

    --Be sure to buy a condo that is in a relatively new (AND QUIET) building. Otherwise, it can be as noisy as living in an apartment building.
    --You want to be in a building where as many of the condos are owner occupied (not rented out) as possible.
    --Usually, the larger the building is, the better it will be maintained, and the better the rules will be enforced.
    --Buy a condo that includes at least one parking space in their garage. You don't want to have to pay extra, every month, for a parking space. And, you don't want to have to park on the street.
    --If possible, buy a condo that has a deck or patio, so that you can have a little outdoor space to call your own.
    --Buy a condo that has a washer/dryer hook-up in your condo.

  • Posted by a hidden member.
    Log in to view his profile

    Apr 28, 2012 11:47 AM GMT
    Joeyphx444 saidAnyone own or have bought a condo b4?? Any advice would be appreciated
    Just general tips since I know every market is different


    Had a 14,000.00 assessment on my condo in SF. End of story...never again.
  • Posted by a hidden member.
    Log in to view his profile

    Apr 28, 2012 4:03 PM GMT
    We have a house in Michigan, but a condo in Palm Springs. What is nice about it is that in our lengthy times away from Palm Springs it is nice to not have to worry about outside maintenance. Pay attention to hoa fees- several pools and lush grounds can be nice, but tend to make the fees higher. larger complexes with a lot of units can give you both nice grounds and pools and lower fees. One condo we looked at but did not take had a monthly fee on $550. Sounds like a lot, but it included utilities which can actually be worth it in a desert town where summer air conditioning can cause the utilities to be much higher that. So look at what the fees include. Some people shy away from complexes with a lot of elderly, but those can also be among the quietest. Corner units often tend to have better patio and balcony space. While looking at condos, walk the grounds and talk to neighbors. We have a lot of nice neighbors and it is nice to have people that keep at eye on things while we are away although a lot of the owners are Canadians so they tend to be away the same time as us, but Canadians are generally polite, quite neighbors so that is nice.
  • Posted by a hidden member.
    Log in to view his profile

    Apr 28, 2012 4:17 PM GMT
    recovering owner in a Common Interest Development (condo association of detached homes.)

    I would have more courage to go through this again in states that have a good set of CID laws that prevent homeowners from being victimized by the management company industry and boardmembers who really need their ego's stroked constantly. California has the Davis-Sterling laws. Texas or Arizona? Hell no.

    EDIT: Arizona? Crap, dude. Google is your friend.

    Condo associations are appealing to builders who want to maintain some control over homeowners while their subdivision is being built and this bypasses municipal requirements for setbacks and property lines...which allows homes to literally sit on the property line.

    I had good neighbors for two years. But, one got relocated by the military and replaced with a sociopath and the other was replaced by a family that had a lot of relatives hailing from south of the border.

    The problem is a condo association isn't going to stop the loud parties on a Thursday night at 2AM or make sure guest parking spaces aren't being abused by homeowners.

    I've rented a condo and that turned out to be a nasty surprise when the condo owner misrepresented his financial situation and my deposit vanished. I prefer to live in an apartment. At least you can threaten them with moving out and yelping your experience to future prospective renters. Just have to roll your eyes and ignore the occasional "I'm terrified of dogs. Can you just have an elevator dedicated to people who can't be around dogs?"

    *snort* Sure, maam.
  • Posted by a hidden member.
    Log in to view his profile

    Apr 28, 2012 4:22 PM GMT
    Besides knowing the associations reserves, know the condition of the building, of what those reserves might have to afford.

    Age of roof and when will be replaced, age of building's a/c & plumbing systems etc. Is the building near salt water spray? Concrete spalding on the balconies? These remediation projects can run into the millions. So besides getting someone to inspect your contracted unit, you also need to know the condition of the entire building and the property.

    Also, in this day and age, if you can find this out, learn what percentage of homeowner's dues are being paid. When I bought the houses I'm fixing up, even though I suspected greater than average stability due to a) many properties here are passed down thru family generations so very little was sold during the bubble b) lots of university professors live here due to proximity to campus c) also employees here from nearby medical centers with job security, I went as far as to check public records to see which properties were owned free & clear (turned out about 33% of them), and then I compared mortgage notes with current property values to see how many properties were underwater, which looked like they'd been atm'd etc to try and understand the level of the financial stability of the area.

    Had I found too many red flags I'd have been scared away but I wound up being pretty pleased with what I found, made some projections and pretty much the houses, not many of them, that I thought would wind up in trouble did get foreclosed upon. Plus there was maybe one surprise but overall I'm pleased with how this area has weathered that shitstorm of a bubble and I think I made a good purchase.

    Buyer beware.
  • Posted by a hidden member.
    Log in to view his profile

    Apr 28, 2012 4:26 PM GMT
    You have a lot of good advice here and as a guy who bought a condo in the late 80's, I have only a few points to offer for your consideration.

    Your profile mentions you don't care for drama, so I would caution you to think carefully before accepting a position on your condo board. I became president of our board and found that instead of this being an honor, it was rife with heartaches. Elegant, older people in my building put my name up for a board position and I was happy to accept. Then I found out what a miserable job that can be. Even in a luxury building with great reserves and residents without money woes, I found that even one or two malcontents can drive you crazy with complaints and threats of lawsuits.

    My condo went from $255,000 to over $1,100,000 now, and I'm not sorry at all that I bought it. The H.O.A. monthly fees went from $400. to $750. over the years. There have been few assessments, but one was for $40,000 per unit (there are only 9) for major building repairs, and to augment the reserves. The one thing I would do differently is to stay off the board. Let them get other people willing to have the "honor" of serving.
  • CuriousJockAZ

    Posts: 19138

    Apr 28, 2012 4:28 PM GMT
    nicenmanly said
    Joeyphx444 saidAnyone own or have bought a condo b4?? Any advice would be appreciated
    Just general tips since I know every market is different


    Had a 14,000.00 assessment on my condo in SF. End of story...never again.



    Had a $10,000 on mine. Many residents could not afford the assessment and ended up foreclosing on property which made values go even lower. When you add the cost of HOA fees to what your payment is, you can almost buy a house for the same monthly payment
  • Posted by a hidden member.
    Log in to view his profile

    Apr 28, 2012 4:34 PM GMT
    Best investment as well here – I took my time with my realtor – so like other have stated before or if they have not:

    •Look at the property in terms of resale value as well – How many years you think you are going to living there? Most average around 5 to 6 years and then move to your second property. Do not think that this is your first and last property.

    •If the HOA is in current litigation or assessments – walk away – not worth it.

    •Look at the property in terms of how close is to your work, social activities, restaurants, nightlife, since you do not want to be spending a lot of time in the road commuting from your home back and forth.

    •Look at the property in terms of amenities and the HOA dues as well, is it worth pay that additional within your mortgage every month.

    •Before buying the property ask your realtor to visit the property at night rather than at daylight, this will get a sense if there is a noise issue and if you can live with it or not.

    •Drive around the neighborhood, walk, etc. get a sense of the area.

    •Look for foreclosures or short sales, although some newer properties might need some repair is worth the investment – banks are desperate to clear their books. I bought a foreclosure and I am doing minor repairs now –the building is fairly new 2004. Be prepared to wait on foreclosures and short sales, since the bank might have multiple offers – but the investment down the road is worth it.

    •Get pre-qualified 1st by a mortgage lender to see how much they are willing to give you. Take a loan the suits your needs based on how long you think you are going to be in the property.

    •Be ready for home inspection in terms of your closing costs and what repairs might be needed. With an owner you can negotiate back of what the might be willing to cover in term of repairs, with foreclosures and short sales is different there is no negation you buy the property ‘as is’. In other words have a safety net of funds if you need to dip into them for this.

    •Ask what is the property tax % in your area since you will have to pay property taxes – you have the option of being included in your mortgage payment or paying them separately. Sometimes just crossing a next county makes a big difference in lowering you tax burden.

  • FredMG

    Posts: 988

    Apr 28, 2012 4:35 PM GMT
    It's communal living, like apartments, I'd say the benefit is that you retain some value instead of watching your rent dollars just go to someone else.
  • Posted by a hidden member.
    Log in to view his profile

    Apr 28, 2012 4:45 PM GMT
    at first I thought we were talking about buying condom ... sorry I just woke up and still in bed
  • Posted by a hidden member.
    Log in to view his profile

    Apr 28, 2012 4:48 PM GMT
    Webster666 saidI bought a condo, many years ago.
    And, it's the best investment I have ever made.
    You will love the mortgage interest income tax deduction, every year.

    BEFORE you buy:
    --Find out how much money the Homeowners' Association (H.O.A.) has in reserves (to pay for major expenses, such as roof repair, painting, etc. You don't want to get hit with an assessment to pay for these expenses, on top of your monthly H.O.A. dues.
    --Find out how much the monthly H.O.A. dues are. Can you afford that, in addition to your mortgage payment and the property taxes ?

    --Be sure to buy a condo that is in a relatively new (AND QUIET) building. Otherwise, it can be as noisy as living in an apartment building.
    --You want to be in a building where as many of the condos are owner occupied (not rented out) as possible.
    --Usually, the larger the building is, the better it will be maintained, and the better the rules will be enforced.
    --Buy a condo that includes at least one parking space in their garage. You don't want to have to pay extra, every month, for a parking space. And, you don't want to have to park on the street.
    --If possible, buy a condo that has a deck or patio, so that you can have a little outdoor space to call your own.
    --Buy a condo that has a washer/dryer hook-up in your condo.



    Excellent advice.

    A few caveats about the current market.

    = Ask the association if any of the owners are behind in their HOA dues. People who don't make mortgage payments, don't make HOA payments either. I've seen owners stay in units 2+ years before the bank forecloses. Less than few percent is ok, but more than that and your bank is less likely to approve you for a mortgage.

    = Ask to see the minutes of the condo board meetings. This is where problems get aired.

    = Buy with resale in mind. Check realtor.com and locate developments where units rarely become available, then stay on the market for a short time. Avoid being near a busy street or the pool...noise is bad. Also, one bedrooms are harder to sell.

    Real estate is all local, and you must educate yourself on your local market. Don't trust real estate agents. Do you homework. And then do your homework again. Visit your county land/real estate records office...and many of them are online. Research the history of real estate transactions in the building. Research the owners and neighbors too. Get the owners names and google them. Find out who has mortgages, when they bought, or if they're paid off or in held in a trust. Basically, wealthier neighbors that have been there a while is better. You want a low turnover building...it means people must like living there, and increases the chances that you will too.

    Oh, and one more thing. I've found that the best buildings have lots of retirees and seniors in them. Old people don't have kids, they're quieter and more financially responsible. Also, they're home during the day, so chances of crime are less.

    This sounds like a lot of work, and it is, but when you buy a condo, you're not just buying a place....your making an investment into the neighborhood and neighbors too.
  • Posted by a hidden member.
    Log in to view his profile

    Apr 28, 2012 5:13 PM GMT
    I own a apt in Townsville Qld for 20 years , and it has been a really great buy , well constructed building , ( went thru cyclone Yasi unscathed in 2011) , it is an easy ownership , and value have increased every year since my purchase ...
    I own also a condo ( like you call them in the U.S) that wasn't such a great buy ..Hehehe....Lots of building problems due to poor construction , high maintenance fees , and lots of the condos in the complex , are rented ( 60% of them actually at this time ) , value of the property hasn't increase since i bought it in late 90's , but at least didn't want down like so many of them .
    In the U.S watch for very low reserve in the HOA association funds , or you will have to pay when they need to repairs something costly ( happens to me last year when the roof was replaced ) .
    Also i have heard from co-workers wanting to buy a condo , it is hard to find a bank that will loan you money on a complex with lots of units for sale or in foreclosure . Too bad because with low prices now , it seems a good time to buy . Just buy wisely
  • Posted by a hidden member.
    Log in to view his profile

    Apr 28, 2012 5:19 PM GMT
    Good advice. I'm about to get pre-qualified also. I think it's a little different in the larger areas where real estate continues to move quickly. My realtor friend was telling me that in SF the good places are still selling above asking because the supply is low and demand remains high. Makes it hard to do a lot of research without losing the place while you're looking.
  • Posted by a hidden member.
    Log in to view his profile

    Apr 28, 2012 5:26 PM GMT
    ==Ask to see the minutes of the condo board meetings. This is where problems get aired.

    I can't think of a situation where this actually happens. First, the management company has to present a sterilized set of minutes at the next meeting for approval and board members aren't going to vote to approve something that puts any of them in legal jeopardy.

    You will, however, find things that *have* to be listed in the minutes.

    I will give credit to the forces behind a California law change a few years ago that required the board meeting to stick to a pre-announced list of topics that will be discussed. New business had to be tabled for future meetings.

    I
  • Posted by a hidden member.
    Log in to view his profile

    Apr 28, 2012 8:34 PM GMT
    I haven't bought a condo yet, but the first thing I'll be looking for is hot pool boys and maintenance crew.
  • Posted by a hidden member.
    Log in to view his profile

    Apr 28, 2012 8:41 PM GMT
    If you are buying in Phoenix, I'd just make sure you are planning to stay there for the next 5 years and/or the condo can be rented out if you do leave.

    I grew up there and the market is way way down. My parents house at the peak was worth 1.3 million I think. They sold for 650,000.00. Luckily they only paid 200k for it years ago.

    I agree with CuriousJock, buy a house. They are super cheap out there now. I mean the condo fee's would cover paying for any exterior maintenance on most homes.

    I think CuriousJock is a realtor so eh show some realjock love and call him LOL.
  • Posted by a hidden member.
    Log in to view his profile

    Apr 28, 2012 8:49 PM GMT
    i agree with muchmorethan... had a condo hated it, too many rules and regulations plus the condo fees were not worth it, it was like paying another mortgage much prefer my little house where i can do whatever i want!
  • Posted by a hidden member.
    Log in to view his profile

    Apr 28, 2012 9:11 PM GMT
    As nice as a brand new development may seem, I recommend sticking with a condo that has been around a few years and where the property has been turned over from the developer to the homeowner's association. If you buy in a property where the developer is still highly involved you may find they have been keeping the fees artificially low to try to sell units. Also, buying in a property where the association is established will give you a better idea of how the property is going to be maintained and whether large expenses and repairs are handled through reserves or through special assessments. You also will have a better idea of just how structurally sound the development is once the developer is out of the picture as shoddy construction sometimes doesn't show up for a few years.
  • Webster666

    Posts: 9217

    Apr 28, 2012 11:18 PM GMT
    There are only 8 units in my building.
    At one time, I was the HOA president.
    I could never get any of the owners to take any of the other HOA responsibilities. So, I ended up doing EVERYTHING.

    And, we had one owner who did nothing but bitch. Our dues were extremely low, compared to all other condos in San Francisco. So, our reserves were never as high as they should have been. I raised everybody's dues by $25 to $50, and two of the owners went ballistic.

    Finally, we got an outside management company to manage our building. They were terrible. So, we got another one, which was GREAT.

    And, I have to laugh at those owners who threw a fit when I raised everybody's dues, because our management company has raised our dues, many times, until now, each owner is paying about DOUBLE what they used to pay.

    While I would love to own a house, where I could enjoy more peace and quiet, I certainly don't regret buying my condo.

    ---One other thing. BUY A TOP FLOOR UNIT, unless you're buying in a newer, and relatively sound proof building. You don't want to have to put up with the CLACK, CLACK, CLACK of somebody's footsteps.


  • Posted by a hidden member.
    Log in to view his profile

    Apr 28, 2012 11:31 PM GMT
    I'm loving my condo

    bought it at the perfect time - when the market gets better (if it ever does) it should triple for what I bought it for

    I also own a home in Chandler - in time I hope to rent out both places and live elsewhere

    http://www.signatureplacecondos.com/
  • Posted by a hidden member.
    Log in to view his profile

    Apr 29, 2012 12:08 AM GMT
    MuchMoreThanMuscle saidPaying monthly fees is not worth it.

    Some are saying that their $550 is worth it since summer air conditioning can be higher than that. I guess every place is different but I don't know of any buildings I've ever looked at that includes electricity. Unless your heating and air conditioning is included in your assessments. But even still, most people only need it for the hottest summer months out of the year,

    I don't know anyone who has a $550 electric bill. Only people I know that do are those that own small businesses and have to cool or heat a very large facility. But even still, that's a business expense.

    My stove top and oven is electric. For my shoe box of a home my overall electric and utility bill is under $30 a month. I can't imagine a $500 utility bill in one month, that's insane.




    Well, here is a building I looked at in Palm Springs and all utilities are included.

    http://palmspringsfinesthomes.com/palm_springs_properties/Alejo_Rd_277_P3/Alejo_Rd_277_P3.htm

    Running air can run from April until October nonstop so the utilities can be very high when the days are above 120 and the nights only get down to the 80's.
    The $125,000 price in the above condo sounds like a great deal, but it has a major drawback in that it is Indian lease land so the condo owners never actually own the land that the building is on. In PS when you see those deals that seem to good to be true, that is often the case.
  • Posted by a hidden member.
    Log in to view his profile

    Apr 29, 2012 12:11 AM GMT
    fasterpace saidI also own a home in Chandler - in time I hope to rent out both places and live elsewhere
    If your price is comparable to what the company is paying here, you might be getting a call next December if I have to do this contract again.