Ask a real estate professional: What do I need to consider in buying a condo?
Q: My husband is trying to convince me to move into a condominium and feels that now would be a good time to get a great deal. Are their any red herrings we should be concerned about with purchasing a new condominium? — Terri
A: Terri, when purchasing a condominium in today’s market, there are a few important things to consider. First, I would see what percentage of homeowners in a given building is current with association fees. If a large percentage is late or not paying, this could cause a large problem down the road for everyone living in the building. Second, it’s important to check and see if the association has reserves. Without them, it may be difficult to get financing for your purchase. Third, I would suggest speaking with the management and see if there are any upcoming assessments to the unit owners. When considering the purchase of a condominium, there is more due diligence necessary compared to purchasing a home, so it’s not something I would rush into.
Q: I am looking to purchase a condominium on Miami Beach through a developer’s closeout and have been told that the unit may not appraise. What happens if it doesn’t? Is this something I should be concerned about? — Monique
A: Yes. In today’s market there is absolutely no reason to overpay for a new property. If the unit you are considering does not appraise, you should either renegotiate with the developer or walk away from the deal. Additionally, it may be difficult to get a loan on a property that does not appraise, which will create even more issues. Although it has been well documented the problem the industry is having with appraisals in general, there is no reason to go against the grain and try to buy something that may be worth less than what you are paying for it.