Buying a Seattle condo? Questions you should ask the condo.
Seattle condos are a popular foot in the Seattle real estate door for many first time home buyers. Also, some sellers looking to downsize from a house will look at buying a condo.
Compared to buying a house, there is an extra layer of investigation that you need to do when buying a condo. Some of these factors will affect your ability to get a loan for the property. Your credit might be fine but the condo’s financial health may not be good enough for the lender. Basically, both you AND the condo development need to qualify for the loan, particularly when it comes to FHA loans.\
Channel your inner Columbo…
Excuse me ma'am, just one more question....
What are the home owner association (HOA) dues? These are monthly dues that go towards the maintenance of the building and a reserve fund for future repairs. For north Seattle, you can expect to pay between $200 and $450 / month. Note that these dues are in addition to your monthly mortgage, property tax and insurance payments.
What do the HOA dues cover? Dues will always cover maintenance, building insurance, garbage and sewer and sometimes earthquake insurance. Some utilities will be covered but vary, so make sure to ask.
What percentage of the units are owner-occupied? The more the better. You want to live in a condo development that has a high percentage of owner-occupied units. Some condo associations do not allow any rentals which will restrict you from renting yours in the event that you wanted to travel the world for a year or move for another job and want to keep the property.
What percentage of the owners are behind on their monthly HOA dues? You want to buy into a condo development where the vast majority are keeping up with their payments. Otherwise the there may not be enough money in the kitty for required repairs (both planned and unexpected ones).
Has the HOA done a recent reserve study? A reserve study looks at the association’s current finances and expected demands on those finances over the next 5 to 10 years. Theses include upcoming repairs such as do the elevators need upgrading, need new rood or windows or does the parking lot need repaving? In addition, the study looks at the associations rainy day funds for unexpected issues. If the HOA has not done one in a few years it may be sign of bad management / apathy.
Minutes from monthly HOA meetings: what are owners griping about at these meetings and what are the on-going problems that have not been addressed? Meeting minutes are a great way to find stuff that may have “slipped” the seller’s mind and forgot to tell you.
Are pets allowed? When you buy a house, you can have a pet boa constrictor in your living room if you want, but condos are like rentals when it comes to pets. Make sure you check what restrictions they have or fluffy might not be able to move in with you!
How many parking spaces do I get? Some condos will have none, some will be covered and some will be exposed to the elements. If you have two cars and there’s only one parking space, is there room on the street for your other car. Alternatively, are there additional parking space that you can rent from one of the other owners?
Unfortunately, most of the answers to these questions will not be available to you until you have an offer accepted on the property. One of the contingencies (conditions) of your offer to purchase the property will be that you get to read a 4″ stack of paper know as the Resale Certificate. This monster contains, among other things, all the rules and regulations for the association (CC&R), the minutes from monthly meetings and a copy of the most recent reserve study. These are truly a joy to read but it is critical that you do so thoroughly ask as many questions as you need to and decide whether buying this particular condo is a good decision.
