Buying a condo may be one of your smartest investments yet. You’re paying for something you’ll own one day, but without much of the expensive upkeep and work of a traditional home. But buyer beware: not all condos for sale are worth exploring. Learn the major red flags before putting in an offer.
For investors and homeowners alike, condos can be a great investment. They’re usually smaller than your typical home, which automatically means a lower cost of ownership. They’re fairly easy to maintain and you’ll never have to cut grass or maintain the landscape.
However, all this convenience comes at a price, and buyers who are considering condos for sale will need to know exactly what they’re getting into before signing on the line.
Consider these seven red flags that could indicate you might be getting a worse deal than you think.
1. Basic Maintenance Isn’t Being Performed
Take a walk around the condo complex. Does it look like the walkways are swept, the roof is in good condition, the light fixtures work, and the parking lot is even and well painted? If not, you might want to keep looking.
Condo owners pay monthly fees to a homeowner’s association to handle general upkeep. This money covers a lot of things, like replacing roofs, cleaning up after a storm, paying for parking lot lighting, painting or cleaning the exterior of the condos, and other expenses.
But if basic maintenance isn’t being performed, it does little to instill confidence that the condos themselves have been maintained.
2. Neighbors Aren’t Paying Their HOA Fees
As a potential condo buyer, you have the right to look at the HOA financials to see how money is being spent, how much money they collect, and how much money is in reserve. But if more than 10% of your neighbors aren’t keeping up with their HOA fees, run.
HOAs can’t operate efficiently if they don’t have everyone contributing. This means that when maintenance is needed, the association will either use a bottom-of-the-barrel contractor or cut corners to save money. And when this happens, your condo could go down in value because the property hasn’t been well maintained.
3. There Hasn’t Been a Recent Tax Assessment
When the housing market collapsed, the value of many condos tanked. But unless they’ve had a recent tax assessment, you could be paying taxes based on the old value of the condo.
Make sure you ask to see tax statements and what the condo is valued at. If the two aren’t aligned, you can ask to have the condo reassessed, but that could take a long time.
4. They Don’t Have a Resale Package
A resale package is a collection of documents from the HOA that includes the budget and financials. If you’re buying a condo, you can request to view the resale package to see if the overall financial health of the community is up to par.
But if the association doesn’t have a resale package, walk away as quickly as you can. There could be something they don’t want you to see, likely because it could result in you backing out of the deal.
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5. The Fees Seem Too Good to Be True
Low HOA fees might sound attractive, but in reality, they should be a warning sign. It takes money to keep parking lots in good condition, pay the electricity for lighting, keep the pool clean, and other benefits of living in a condo. When fees are too low, the HOA might not have enough in reserve to properly maintain the area. And if a disaster occurred, they’d go broke trying to fix the damage.
6. The Condo Culture Doesn’t Feel Right
While you’re exploring the community, take note of the people who live there. Are there a lot of senior citizens, or is it mostly college young families? How will you fit into the culture, and will you be able to tolerate having these people as your neighbors?
If something doesn’t feel right, it’s probably for a good reason. You can’t choose your new neighbors, but you can choose to trust your gut.
7. You Aren’t Working with an Agent with Experience in Buying Condos
Buying or selling a condo is a lot different than buying or selling a house. There are unique considerations that come with condo purchases and it’s important to work with an agent that can help you know the right questions to ask or things to look for.
Remember, your agent works for you, not the HOA or the seller. They’re helping you not only get a great deal but also avoid making a bad purchasing decision.
How Clever Helps You Avoid a Home Buying Nightmare
Are you prepared to buy a condo? Whether it’s your first buying experience or you’ve been through the process before, it’s always in your best interest to work with a real estate agent who can help you achieve an optimal outcome.
Clever Partner Agents are experienced real estate agents in their local markets with experience in buying and selling condos. Our Partner Agents provide all the same services as a traditional agent and since the seller usually pays the buyer’s agent’s commission, you’re essentially getting their services for free.
Reach out to Clever today for a no-obligation consultation and we’ll connect you to a local real estate agent that can help you buy with confidence.