5 Things to Ask a Property Agent When Buying a Condo
If a condo looks great, has a great price, and fits your needs, it’s easy to want to jump on board right away. With the dream of a getaway condo so close within reach, you’ll want to do whatever necessary to turn the dream into a reality. However, the real reality is that condominium associations may try to pull the wool over your eyes by not disclosing all important information, and it is your duty as a potential buyer to get the full scoop before purchasing. Otherwise, you could be in a sticky situation down the road.
Here are 5 important things to make sure you ask the property agent when looking to buy a condo:
1. What does the rental policy look like?
Getting to know the rental policy and system of renters at a particular complex can help you get a lay of the land and find out some key information. For one, if a complex has a high number of renters who do not use the condo as their main residence, they are more likely to default on a loan, which leaves the property in murky waters. When a complex has several units that are being foreclosed on, the condo fees and association fees are often not paid, which leaves a need for money deferred to the other residents to make up for it.
Next, a complex with a lot of renters coming and going may not be kept up as well. Owners or renters who are onsite often will show more pride in the property and land, keeping a higher standard of living.
2. What are the rules of the condominium association?
Almost any condominium complex will have an association. These associations set in place rules and regulations to keep everything running smoothly, looking nice, and remaining a pleasant place to stay. When buying a condo there, you are also agreeing to the condo association rules, so you’ll want to know what exactly you’re signing up for ahead of time.
The association will either be internally run, usually with regulations ruled upon by the homeowners collectively, or externally by a property management company that makes the rules.
Most rules are generally agreeable to keep the standard of living high, but there can often be rules that seem ridiculous or may put a damper on your future plans. Things like outdoor gardens, fences, ownership of large vehicles, etc. can likely be subjects of association laws, so finding out what’s allowed and forbidden can save you heartache in the future.
3. How much are the condominium fees?
In addition to the rules that the condominium association sets in place, they also likely have fees. These fees usually cover things like exterior building maintenance, grounds maintenance, utility services, trash maintenance, and road repair. Finding out what this fee covers will give you a good idea of how in-depth the association cares for the complex and how much responsibility they are taking on. It also lets you estimate the total cost you’ll actually be paying. (These fees aren’t often advertised at first.)
4. Is it managed? By whom? (Who fixes what?)
On the same subject as the association, do they manage the property? They might not be in charge of any of the aspects listed above, so it’s important to actually clarify that. On the other hand of a HOA, a property management system will be run externally. If that’s the case, are they ever on site to fix things, or do they outsource problems elsewhere?
You want to get to the bottom of who is in charge of the complex and who you should call to get things done if the need arises.
5. What does the financial health of the association look like?
A financially healthy complex will be able to manage unforeseen circumstances should they arise, and they will have successfully managed things in the past.
One thing to look for here is how much is currently in the reserve fund, the money which is used to fund things in the complex’s interest. A general rule is that there should be at least 10% of the annual budget revenue in the fund, if not more.
Another important aspect is whether or not there are special assessments coming up soon. Special assessments are an additional fee charged to renters when an especially expensive expenditure comes up. You want to know if you’re about to be charged higher than usual.
Lastly, make sure there are no current lawsuits or notable lawsuits of the past. Hopefully the complex you choose has stayed out of trouble.
While the work done before purchasing a condo can be a bit overwhelming, the payoff of finally having one is always worth it. With Hua Hin Property Partner, we will help you settle into the exotic condo of your dreams with guidance and ease.