Condominium purchases can be different from purchasing single families. There are more factors to review. This blog offers condo buying advice for Austin first time buyers.
Definition of a Condo
Condominiums are properties with more than one unit sharing common amenities. Exterior areas belong to the association and every unit maintains a percentage interest in it. The specific percentage is typically specified in the deed for each unit. Condo owners are responsible for maintenance of the interior of their own unit but share the expense of exterior areas such as roofs. Because of the common spaces and fees, it is critical for Austin buyers to review certain condo documents before purchasing a unit.
Facts You Need to Know
Using Different Loan Programs
Not all mortgage programs may be used for all condo complexes. For example, FHA requires minimum owner occupancy percentages, satisfactory reserves, and a variety of other items. Complexes that are not FHA approved will be more difficult to sell. Buyers using FHA should determine whether a complex qualifies prior to spending too much time viewing units there.
Every complex has a certain number of rental units. High owner occupancy rates are more likely to meet loan requirements. High rental rates may also foster a less desirable environment.
Recurring Fees and Reserves
Most condominium complexes implement monthly fees. The fees are for common expenses. A percentage is also set aside into a reserve account to prepare for future repairs. It is important for buyers to know the amount of the condo fee, what is covered, how much it has increased in the past, and whether it is expected to increase. Buyers should also ask about the amount of funds currently in reserve. If a complex maintains insufficient funds to cover a significant repair, all unit owners will be responsible for the shortage. This is called an assessment and can be significant for owners to bear.
Rules and Restrictions
Condo owners must deal with rules that single family owners do not. Condo buyers should read through the rules and regulations in advance and make sure the terms are acceptable. Rules may regulate both common spaces and interior spaces.
Condo Buying Advice For Austin First Time Buyers
There are risks to maintaining any kind of real estate, but condo purchases have a few added considerations that buyers should be aware of. Carefully read through all documentation and get help from a real estate attorney if necessary. Also consider the future market value of units based on the finances of the complex and home loan qualification. Contact a real estate professional to provide the sales history in the complex. Details helps buyers develop an informed decision about a condo purchase. This article on condo buying advice for Austin first time buyers was prepared by Shaina Moats at Keller Williams Realty. Contact Shaina at 512-963-7157 or firstname.lastname@example.org for information on specific complexes in Austin or for help with other real estate matters.