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5 Important Questions to Ask Before Buying a Condo

| May 10, 2012 | 1 Comment

Arbor Hill Weymouth The Elms condo'sBuying a condominium in Massachusetts involves taking some specific precautions that buying a single family does not. The most obvious difference between a condo and home is that buying a condo enters you into a ownership partnership with your neighbors whereas buying a single family home does not. So before you get stuck in bad situation, consider these 5 tips before signing a purchase and sale agreement.

1. What is the current state of affairs? It’s important to know what recent and future issues the condominium association is currently dealing with. You or your real estate broker should ask for the following information:

  • Ask for copies of the “meeting minutes”  from the last 12 months of the condo board / association meetings.  These should show you all issues that have been brought before the association and what involvement future owners will be responsible for.
  • Ask for statements on any existing special assessments and specifically ask about the current obligations and current standing of the unit you are considering to purchase

2. What percentage of the total units are occupied by owners versus what percentage are being rented out to tenants.  This is imporant for 2 reasons. 1. associations with a high percentage of renters may result in high interest rates or even declined loans for potential condo purchasers. 2. Associations with a high number of renters may not be taken care of as well as others with high number of owners.  Simply put, renters don’t care about a property as well owners do.

3. Know how much the condo fee is and what it covers.  This topic could be an entire blog post by itself because the condo fee covers so much, but here is a quick overview of the elements a buyer needs to be aware of:

  • Reserve vs. Operating Account: Find out what percentage of the condo fee is being designated for the “Reserve Account”
  • Master Insurance:  What is covered by master insurance?
  • What percentage of owners are delinquent on the monthly fee.

4.Who Manages the Association?  Is it self managed or is there contracted property manager.

5. Ask to see the By Laws:  Do the bylaws contain any restrictions, rules or covenants? If so, what are they and is there anything you consider to be unreasonable? The by-laws are usually written out in the Condominium documents which you should get a copy of prior to agreeing to purchase a condo.

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