Purchasing condominiums are much different than single family home purchases. There is more information to evaluate before purchasing condos. This article offers condominium purchasing advice for Arlington MA first time buyers.
What is a Condo?
Condominiums are complexes with two or more units with shared common space such as land and hallways. Exterior areas belong to the association and each owner retains a percentage interest in that. The exact percentage is predetermined in the association documents. Condo owners are responsible for maintenance of the interior of their own units but share the cost of common areas such as land. Because of the common spaces and fees, it is critical for Arlington MA buyers to review paperwork before purchasing a unit.
Questions to Ask
Using Different Loan Programs
Mortgage programs will only provide loans on units in qualified complexes or based on specific criteria. For example, FHA requires certain owner occupancy rates, sufficient reserves, and a variety of other items. Condo complexes that are not or cannot obtain FHA approval will be more difficult to sell. Buyers using FHA should identify whether a complex is approved before spending too much time evaluating units there.
Owner Occupied Units
Every complex has a certain number of rental units. Higher owner occupancy percentages are more likely to meet mortgage requirements. Owner occupants also tend to better care for their units.
Reserves and Assessments
Most condo complexes require monthly fees. The fees are for common expenses. A percentage is also put aside into a reserve account to cover upcoming repairs. It is important for buyers to understand the amount of the condo fee, what is covered, past increases, and forecasted changes. Buyers should also question the amount of money currently in reserve. If a association has insufficient funds to cover a major repair, the shortage must be shared among the unit owners. This is known as an assessment and can be a hardship for condo owners. Ask about past assessments and any future ones.
Rules and Restrictions
Condo owners must comply with rules that single family owners do not. Condo buyers should learn the rules and regulations in advance and determine whether they are acceptable. Rules can cover both common areas and interior spaces.
Condominium Purchasing Advice For Arlington MA First Time Buyers
There are conditions to buying any type of home, but condo ownership has some additional considerations that buyers should evaluate. Carefully review all information and consult a real estate attorney. Also evaluate the resale value of units based on the finances of the complex and financing qualification. Contact a real estate agent to provide the sales history in the complex. Details helps buyers make an educated decision about a condo purchase. This article on condominium purchasing advice for Arlington MA first time buyers was offered by Scott Strang at Scott Gregory Group. Contact Scott at 781-646-7600 or firstname.lastname@example.org for information on a specific complex in Arlington MA or for help with other real estate topics.