subject: Four Questions To Ask Before Buying A Condo Or Townhome [print this page] There are many things to consider when purchasing a condo or town home. More specifically, there are location-specific queries that you should ask. For instance, answers to the following questions about a Sandy townhome or condo will vary from a search for a Malibu townhome and condo.
What are you actually buying?
It's vital, before signing any papers, to find out what you are actually purchasing. With some condo and townhome units, you purchase the land around the unit; for others you are merely buying the walls and everything within them. Your rights will vary depending on the type of unit you are purchasing, so make sure you are aware of what becomes yours after making it official. Later, this will save you time, energy and money if problems arise.
How much are the HOA fees and what are they used for?
Most condo and townhome complexes are managed by home owner association (HOA) fees. Each owner is required to pay a monthly fee that can, but does not necessarily include: cable, water, grounds maintenance, garbage removal, snow removal if applicable and oftentimes internet access. It would be wise to ask current homeowners if the fees have gone up recently and by how much in order to get a feel for future adjustments. All of this information will be helpful in gauging how much to add to your new mortgage payment when you consider how much you can afford.
How Much Is In the Repair Fund?
The HOA funds should include more than just services. Some of this money should be allocated to future needs of the entire complex, such as new asphalt for the parking lot, new roofs, tennis courts, etc. Be leery of management that has not set aside enough funds to cover these inevitable expenses. This would mean a giant increase of fees when the need arises. Consider the age of the units when asking how much is in the repair fund. Common sense would dictate that the older the units are, the closer they are to needing big repairs and therefore more money in the budget will be necessary.
Is the Complex Renter-Friendly?
Each condo and townhome unit is governed by a set of by-laws. It would be a good idea to review the by-laws before making your decision for many purposes, but especially to find out the policies on renting. If the association is renter friendly, they will have clear guidelines set in place, perhaps even a rental's lease. Keep in mind that the by-laws, which are governed by a council of owners--most commonly on a volunteer basis--can change at any time.
