Purchasing condos are much different than single family home purchases. There is more information to consider before purchasing condos. This article provides condo purchasing tips for Florida buyers.
Condo – Defined
Condominiums are buildings with two or more units with shared common space such as land and hallways. The exterior belong to the association and each owner has a percentage interest. The exact percentage is based on total number of units. Condo owners are financiallyresponsible for repair of the interior of their own units but share the cost of exterior items such as siding. Because of the shared spaces and fees, it is important for Florida buyers to review information ahead of time.
Facts You Need to Know
Using Different Loan Programs
Not all mortgage programs can be used for condo complexes. For example, FHA requires specific owner occupancy rates, minimum reserves, and several other items. Condo complexes that are not or cannot obtain FHA approval will have fewer buyers. Buyers using FHA should identify whether a complex qualifies before spending too much time evaluating units there.
Rental Percentages
Every complex will contain a certain number of rental units. Higher owner occupancy rates are better from a mortgage perspective. High rental rates also tend to be less desirable.
Reserves and Assessments
Most condo complexes charge monthly fees. The fees are for common expenses. A certain portion is also set aside into a reserve account to prepare for future expenses. It is useful for buyers to know the amount of the condo fee, what is included, the history of changes, and expected changes in the future. Buyers should also look into how much is currently saved in reserve. If a association is not equipped to cover a major repair, the shortage must be shared among the unit owners. This is referred to as an assessment and can be a hardship for condo owners. Ask about previous assessments and any planned ones.
Know the Rules
Condo owners must comply with rules that single family owners do not. Condo buyers should know the rules and regulations before purchasing and decide whether they can live with them. Rules can apply to both common areas and interior spaces.
Condo Purchasing Tips For Florida Buyers
There are risks to maintaining any type of listing, but condo ownership has some added components that buyers must understand. Entirely read through all documentation and get advice from a real estate attorney. Also evaluate the resale value of units based on the financial condition of the complex and loan programs that can be used by buyers. Ask a real estate expert to provide the sales history in the complex. Accurate Information helps buyers make an informed decision about a condo purchase. This blog on condo purchasing tips for Florida buyers was offered by Sonny Solomon at The Keyes Company. Contact Sonny at 561-247-1047 or sonny@sonnysolomon.com for information on a specific complex in Florida or regarding other real estate topics.
