Here are the questions you should ask before you buy. You or your agent might want to contact the condo board or management company.
Via NAR. (Click on document for larger image).
- What percentage of units is owner-occupied? What percentage is tenant-occupied?
- What covenants, bylaws, and restrictions govern the property? What grandfather clauses are in place?
- How much does the association keep in reserve? How is that money being invested?
- Are association assessments keeping pace with the annual rate of inflation?
- What does and doesn't assessment cover -- common are maintenance (CAM), rec facilities, trash, snow removal?
- What special assessments have been mandated in the past five years?
- How much turnover occurs in the building?
- Is the project in litigation? If the builders or homeowners are involved in a lawsuite, reserves can be depleted quickly.
- Is the developer reputable?
- Are multiple associations involved in the property?
You can actually find the answers to some of these questions in a condo document upon ratification of a sales contract. In a new construction or conversion, you have 10 days to review the document. However, on a resale of an existing house -- you only have 72 hours (or 3 days) to review the document. If for some reasons, you don't like what you see in the doc, you can void the contract before the 72 hours lapses. No question ask.
The number 1 question -- is very important to the lender. The ratio of owner occupied vs. tenant occupied will determined whether the lender can financed your purchase. The lower the ratio of owner occupied vs. tenant, the more marketable the property is. The lender will need the numbers from the management company.
