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I paid $300 for inspection, $500 for appraisal, and $200 for condo documents. I also took off work for the inspection. I know it may seem petty, but that is a lot of money to me that can actually be spent for my next house. They deceived me. They were aware of the issues and did not disclose it to me. I wasted a month dealing with this house, which prevented me from other opportunities.
Since I have not signed the appraisal contingency release, I might be able to collect as a part of the process.
I realize the discussion has moved on but for all the posters who advised never buying in a building without reserves: Imagine two identical 6 unit condo buildings on the same street. Both were built by the same developer in the same year. Units have the same floor plans and finishes in both buildings.
Condo A has a monthly fee of $300 and maintains no reserves. Roof needs replacing this year for $30,000 and there will be a special assessment to each unit for $5000 for the roof.
Condo B has a monthly fee of $400 and will replace it’s roof this year out of reserves with no special assessment and will continue depositing the extra $100 a month from each unit into the reserve fund..
A 2nd floor south corner unit is for sale in Condo A asking $175,000. The identical unit in Condo B just closed for $195,000. Is a buyer advised to RUN from the Condo A unit because of lack of reserves or does the lower price mitigate the lack of reserves? It’s never so simple as don’t buy because [fill in the blank].
I paid $300 for inspection, $500 for appraisal, and $200 for condo documents. I also took off work for the inspection. I know it may seem petty, but that is a lot of money to me that can actually be spent for my next house. They deceived me. They were aware of the issues and did not disclose it to me. I wasted a month dealing with this house, which prevented me from other opportunities.
Since I have not signed the appraisal contingency release, I might be able to collect as a part of the process.
condo being in debt is not always a bad thing. My condo when I bought it took out a huge loan four years prior to pay for new roofs, it was a ten year loan and when I bought it worked out to 13K per unit. So yes I inherited 13K debt. But roofs last 30 years so they decided not to take loan as new owners benefit and my prior owner paid off four years of that loan.
Sounds like you were looking for a reason not to buy.
I realize the discussion has moved on but for all the posters who advised never buying in a building without reserves: Imagine two identical 6 unit condo buildings on the same street. Both were built by the same developer in the same year. Units have the same floor plans and finishes in both buildings.
Condo A has a monthly fee of $300 and maintains no reserves. Roof needs replacing this year for $30,000 and there will be a special assessment to each unit for $5000 for the roof.
Condo B has a monthly fee of $400 and will replace it’s roof this year out of reserves with no special assessment and will continue depositing the extra $100 a month from each unit into the reserve fund..
A 2nd floor south corner unit is for sale in Condo A asking $175,000. The identical unit in Condo B just closed for $195,000. Is a buyer advised to RUN from the Condo A unit because of lack of reserves or does the lower price mitigate the lack of reserves? It’s never so simple as don’t buy because [fill in the blank].
Also the condo with lower purchase price could use that to grieve property taxes and then join board and resolve financial issues. Which would bring up its value.
Are you a managing agent? The package is completed by our managing agent for a fee. The board does not talk to realtors directly.
I would never give out my budget, expected increases, future increases in writing. That could blow up in your face. The managing agent gives out the package of house rules, offering plan, latest financials, owner occupancy ratios, any minutes etc. And buyer must get sellers permission and pay a fee to get it.
Each state has their individual regulations regarding HOA information - many associations post these documents on their webpage or FB page (for free), as a closed and open group.
The fee for documents is the biggest ripoff I've seen in a long time. Many of the condos are automated and online, yet the management company charges the buyer $225 for the lender questionnaire and $250 -$300+ to the seller for the resale docs, for something they never touch or sign. Many times the information is just plain wrong and can cost a seller a sale.
Almost all property management companies don't even verify the parties in the transaction, I have entered my information for the seller (name and phone#) because I just did not have the seller's info. I will tell prospective buyers investigating a condo to order a lender questionnaire - it should tell them what they need to knoew. There's no control for handing out document, as long as they pay.
I am willing to bet thinkalot's project has low operating cost, as does our HOA. You are not required to charge for this information. Before I took over our HOA doc distribution, we never charged a dime. But we do now.....a grand total of $35. Our HOA is one of the healthiest in the area, a small development, with one year's+ of each unit's annual fee. You don't have to charge an arm and a leg.
Each state has their individual regulations regarding HOA information - many associations post these documents on their webpage or FB page (for free), as a closed and open group.
The fee for documents is the biggest ripoff I've seen in a long time. Many of the condos are automated and online, yet the management company charges the buyer $225 for the lender questionnaire and $250 -$300+ to the seller for the resale docs, for something they never touch or sign. Many times the information is just plain wrong and can cost a seller a sale.
Almost all property management companies don't even verify the parties in the transaction, I have entered my information for the seller (name and phone#) because I just did not have the seller's info. I will tell prospective buyers investigating a condo to order a lender questionnaire - it should tell them what they need to knoew. There's no control for handing out document, as long as they pay.
I am willing to bet thinkalot's project has low operating cost, as does our HOA. You are not required to charge for this information. Before I took over our HOA doc distribution, we never charged a dime. But we do now.....a grand total of $35. Our HOA is one of the healthiest in the area, a small development, with one year's+ of each unit's annual fee. You don't have to charge an arm and a leg.
My offering plan, house rules and financials are in PDP all the owners have it or they can email me and I will resend. So owners have it.
The Lenders Questionnaire has absolutely nothing to do with the condo associations. If a buyer (non-owner) wants to get a mortgage they can talk to our managing agent who will fill it out for a fee.
If someone internal wants to refinance or something I as treasurer will fill it out for free and email it back. If bank wants the managing agent to fill it out you pay fee. Once again nothing to do with building.
As treasurer I understand the need for mortgages but it does not help building it only hurts. I rather have cash buyers and I rather have people pay down mortgages then do refinancing. But the mortgages are a necessary evil.
condo being in debt is not always a bad thing. My condo when I bought it took out a huge loan four years prior to pay for new roofs, it was a ten year loan and when I bought it worked out to 13K per unit. So yes I inherited 13K debt. But roofs last 30 years so they decided not to take loan as new owners benefit and my prior owner paid off four years of that loan.
Sounds like you were looking for a reason not to buy.
Low or no reserves is not an automatic deal killer. I've been involved in hundreds of condo sales. Some of the associations had 100% funded reserves, some had zero and some had pending assessments at time of closing.
For the sake of comparison, a purchaser of a single family home always purchases without reserves. When he needs a roof it's a one-person special assessment. If the roof was on it's last leg when he purchased he probably factored that into his purchase price. Same with a condo. If you're staring at a probable special assessment, adjust your offer price accordingly. It may already be reflected in the asking price.
If the OP expects, as he stated, robust appreciation in the near term, the low reserves may be a non-issue.
The bolded is a good point, as long as condo purchasers understand that(a lot don't). I've seen tons of people tout the advantage of a condo is that you never have to pay maintenance costs outside of your HOA dues. But that is not always the case.
My offering plan, house rules and financials are in PDP all the owners have it or they can email me and I will resend. So owners have it.
The Lenders Questionnaire has absolutely nothing to do with the condo associations. If a buyer (non-owner) wants to get a mortgage they can talk to our managing agent who will fill it out for a fee.
If someone internal wants to refinance or something I as treasurer will fill it out for free and email it back. If bank wants the managing agent to fill it out you pay fee. Once again nothing to do with building.
As treasurer I understand the need for mortgages but it does not help building it only hurts. I rather have cash buyers and I rather have people pay down mortgages then do refinancing. But the mortgages are a necessary evil.
I don't know how you can say the Lender Questionnaire has absolutely nothing to do with the condo association. Your association chooses to pay someone else to handle this and your PM's #1 priority is to get paid. Whether it's earned depends on the job they do. As an officer of your board, you owe it to the community you represent that only current and accurate information is provided by your property manager.
Recently i attended an HOA Summitt put on by the State of Virginia, where we changed classes throughout the day. I think around around 5 or 6 different topics were covered. It was well attended, many traveled a good distance to attend. Towards the mid-morning break, I started an informal survey from the others in attendence. I only asked one question: Have you ever double checked the accuracy of what your PM provides? Not one had. Yet, every single time I have had to get involved with a questionnaire that "flunked" the project, myself or my processor, went to the board of directors and asked them to review what was turned in. And each time, there was faulty or out-of-date answers. Paying for the bad information only added insult to injury.
I don't know how you can say the Lender Questionnaire has absolutely nothing to do with the condo association. Your association chooses to pay someone else to handle this and your PM's #1 priority is to get paid. Whether it's earned depends on the job they do. As an officer of your board, you owe it to the community you represent that only current and accurate information is provided by your property manager.
Recently i attended an HOA Summitt put on by the State of Virginia, where we changed classes throughout the day. I think around around 5 or 6 different topics were covered. It was well attended, many traveled a good distance to attend. Towards the mid-morning break, I started an informal survey from the others in attendence. I only asked one question: Have you ever double checked the accuracy of what your PM provides? Not one had. Yet, every single time I have had to get involved with a questionnaire that "flunked" the project, myself or my processor, went to the board of directors and asked them to review what was turned in. And each time, there was faulty or out-of-date answers. Paying for the bad information only added insult to injury.
Well given my current Property Manager since 2013 has never filled out a Lender Questionnaire who knows how they do it.
My condo is from 1979 not a new condo and on average we sell 1-2 units a year tops. The last condo purchased with a mortgage in building was 2011.
Last six sales were for cash. My condo is located in a very rich neighborhood. My condo are the cheapest units in town. The town would never approve a project like my condo development today. Not an appropriate use of space to build a garden art style complex, zero amenities, outside parking and no gates in an area with nearby homes often sell for 1-5 million.
The last survey that was filled out was a refinance. An owner emailed it to me I filled it out for free as Treasurer.
I want buyers not borrowers in my complex.
We also have a rich condo complex near my cheap complex that is oceanfront. After Sandy a few units sold cheap like around one million. They were all cash deals. I watch sales near me and at least 40% of homes are cash and I would say around 80% of condos are cash near me. My town is a mix of second homes and wealthy retirees and very few first time primary home owners.
The Dakota in Manhattan where units sell for many many millions of dollars where John Lennon used to live has NEVER allowed mortgages. And NEVER allowed home equity loans. Folks who can pay cash are less likely to not pay maint and it keeps the level of people in building higher.
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