Real Estate Information Archive

Before you buy, contact the condo board with the following questions. In the process, you’ll learn how responsive—and organized—its members are.

1. What percentage of units is owner-occupied? What percentage is tenant-occupied? Generally, the higher the percentage of owner-occupied units, the more marketable the units will be at resale.

2. What covenants, bylaws, and restrictions govern the property? What grandfather clauses are in place? You may find, for instance, that those who buy a property after a certain date can’t rent out their units, but buyers who bought earlier can. Ask for a copy of the bylaws to determine if you can live within them. And have an attorney review property docs, including the master deed, for you.

3. How much does the association keep in reserve? How is that money being invested?

4. Are association assessments keeping pace with the annual rate of inflation? Smart boards raise assessments a certain percentage each year to build reserves to fund future repairs. To determine if the assessment is reasonable, compare the rate to others in the area.

5. What does and doesn’t the assessment cover—common area maintenance, recreational facilities, trash collection, snow removal?

6. What special assessments have been mandated in the past five years? How much was each owner responsible for? Some special assessments are unavoidable. But repeated, expensive assessments could be a red flag about the condition of the building or the board’s fiscal policy.

7. How much turnover occurs in the building?

8. Is the project in litigation? If the builders or homeowners are involved in a lawsuit, reserves can be depleted quickly.

9. Is the developer reputable? Find out what other projects the developer has built and visit one if you can. Ask residents about their perceptions. Request an engineer’s report for developments that have been reconverted from other uses to determine what shape the building is in. If the roof, windows, and bricks aren’t in good repair, they become your problem once you buy.

10. Are multiple associations involved in the property? In very large developments, umbrella associations, as well as the smaller association into which you’re buying, may require separate assessments.

Credit scores, along with your overall income and debt, are a big factor in determining if you’ll qualify for a loan and what loan terms you’ll be able to qualify for.

1. Check for and correct errors in your credit report. Mistakes happen, and you could be paying for someone else’s poor financial management.

2. Pay down credit card bills. If possible, pay off the entire balance every month. However, transferring credit card debt from one card to another could lower your score.

3. Don’t charge your credit cards to the maximum limit.

4. Wait 12 months after credit difficulties to apply for a mortgage. You’re penalized less for problems after a year.

5. Don’t purchase big-ticket items for your new home on credit cards until after the loan is approved. The amounts will add to your debt.

6. Don’t open new credit card accounts before applying for a mortgage. Having too much available credit can lower your score.

7. Shop for mortgage rates all at once. Too many credit applications can lower your score, but multiple inquiries from the same type of lender are counted as one inquiry if submitted over a short period of time.

8. Avoid finance companies. Even if you pay the loan on time, the interest is high and it will probably be considered a sign of poor credit management.

1. It protects your ownership right to your home both from fraudulent claims against your ownership and from mistakes made in earlier sales, such as mistake in the spelling of a person’s name or an inaccurate description of the property.

2. It’s a one-time cost usually based on the price of the property.

3. It’s usually paid for by the sellers.

4. There are both lender title policies, which protect the lender, and owner title policies, which protect you. The lender will probably require a lender policy.

5. Discounts on premiums are sometimes available if the home has been bought within only a few years since not as much work is required to check the title. Ask the title company if this discount is available.

The neighborhood you choose can have a big impact on your lifestyle—safety, available amenities, and convenience all play their part.

1. Be picky, but don’t be unrealistic.  There is no perfect home.

2. Do your homework before you start looking.  Decide specifically what features you want in a home and which are most important to you.

3. Get your finances in order.  Review your credit report and be sure you have enough money to cover your downpayment and your closing costs.

4. Don’t wait to get a loan.  Talk to a lender and get prequalified for a mortgage before you start looking.

5. Don’t ask too many people for opinions.  It will drive you crazy. Select one or two people to turn to if you feel you need a second opinion.

6. Decide when you could move. When is your lease up? Are you allowed to sublet? How tight is the rental market in your area?

7. Think long-term.  Are you looking for a starter house with the idea of moving up in a few years or do you hope to stay in this home longer? This decision may dictate what type of home you’ll buy as well as the type of mortgage terms that suit you best.

8. Don’t let yourself be “house poor”.  If you max yourself out to buy the biggest home you can afford, you’ll have no money left for maintenance or decoration or to save money for other financial goals.

9. Don’t be naïve.  Insist on a home inspection and, if possible, get a warranty from the seller to cover defects within one year.

10. Get help. Consider hiring a REALTOR as a buyer’s representative.  Unlike a listing agent, whose first duty is to the seller, a buyer’s representative is working only for you.And often, buyer’s reps are paid out of the seller’s commission payment.

  ® Magazine Online by permission of the NATIONAL ASSOCIATION OF REALTORS®Copyright 2005. All rights reserved. www.REALTOR.org/realtormag

Reprinted from REALTOR

1. Find a real estate professional who’s simpatico. Homebuying is not only a big financial
commitment, but also an emotional one. It’s critical that the practitioner you choose is
both skilled and a good fit with your personality.

2. Remember, there’s no “right” time to buy, any more than there’s a right time to sell. If
you find a home now, don’t try to second-guess the interest rates or the housing market
by waiting. Changes don’t usually occur fast enough to make that much difference in
price, and a good home won’t stay on the market long.

3. Don’t ask for too many opinions. It’s natural to want reassurance for such a big decision,
but too many ideas will make it much harder to make a decision.

4. Accept that no house is ever perfect. Focus in on the things that are most important to you
and let the minor ones go.

5. Don’t try to be a killer negotiator. Negotiation is definitely a part of the real estate
process, but trying to “win” by getting an extra-low price may lose you the home you
love.

6. Remember your home doesn’t exist in a vacuum. Don’t get so caught up in the physical
aspects of the house itself—room size, kitchen—that you forget such issues as amenities,
noise level, etc., that have a big impact on what it’s like to live in your new home.

7. Don’t wait until you’ve found a home and made an offer to get approved for a mortgage,
investigate insurance availability, and consider a schedule for moving. Presenting an
offer contingent on a lot of unresolved issues will make your bid much less attractive to
sellers.

8. Factor in maintenance and repair costs in your post-homebuying budget. Even if you buy
a new home, there will be some costs. Don’t leave yourself short and let your home
deteriorate.

9. Accept that a little buyer’s remorse is inevitable and will probably pass. Buying a home,
especially for the first time, is a big commitment, but it also yields big benefits.

10. Choose a home first because you love it; then think about appreciation. While U.S.
homes have appreciated an average of 5.4 percent annually from 1998 to 2002, a home’s
most important role is as a comfortable, safe place to live.

Reprinted from REALTOR® Magazine Online by permission of the NATIONAL ASSOCIATION OF REALTORS® Copyright 2005. All rights reserved.

1. They don’t ask enough questions of their lender and miss out on the best deal.

2. They don’t act quickly enough to make a decision and someone else buys the house.

3. They don’t find the right real estate professional who is willing to help you through the
homebuying process.

4. They don’t do enough to make their offer look good to a seller.

5. They don’t think about resale before they buy. The average first-time buyer only stays in
a home for four years.

Reprinted from REALTOR® Magazine Online by permission of the NATIONAL ASSOCIATION OF REALTORS® Copyright 2005. All rights reserved.