Avoid HOA Horrors: 25 Questions to Ask When Buying a Condo
A condo may be the perfect way of life for you, but how do you know? Here are 25 questions to ask when buying a condo to make sure you find the right place.
You’ve done your research, crunched your numbers, and laid out what you’re looking for in a home. It’s all led you straight to condo living, and you can’t wait for the maintenance-free lifestyle and simple conveniences that come along with it. The only problem: You’ve heard one too many horror stories about controlling homeowner associations and excessive monthly fees.
Condominiums can be low maintenance, offer luxury amenities, and provide the easy living you might want. For many first-time buyers, a condo may be the manageable first home you need or, for retirees, the best option for downsizing. But they also come with different considerations you might not be aware of, especially if you’re used to single-family homes. Most HOAs have strict monthly fees and rules for your unit that, for some buyers, might cause more headaches than happy nights.
So, how do you know you’re finding the right condo for you? With the help of a veteran real estate agent, we’ve compiled a list of 25 questions to ask when buying a condo. With these answers in hand, you should be able to find the perfect condo that matches your needs and provides more conveniences than hassles.
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1. Does your condo qualify for the type of financing you need?
It’s imperative to find out right off the bat if your condo qualifies for the type of financing you need, according to Colorado real estate agent Robert Hryniewich. Some buildings might not be approved by the U.S. Department of Housing and Development (HUD) and might not work with FHA, VA, or even USDA loans. Hryniewich, a HomeLight Elite Agent who has sold 87 more condos than the average agent in his area, estimates around 50% of condo properties aren’t HUD-approved and won’t qualify for an FHA loan. HUD wants to make sure an HOA has sufficient funds, is well-managed, and has an acceptable renter-to-owner ratio.
Check with the HUD website to see if your condo meets their requirements or ask the condo’s HOA board. Ensuring your condo meets your financing requirements early on will save you plenty of time and stress.
If your condo doesn’t qualify under HUD’s guidelines, you still may be able to find financing under a conventional program, but you’ll want to talk to your lender early to ensure it will qualify under their guidelines as well. Asking these questions in advance can help you find the lender and loan that will work for you.
2. What are the HOA fees?
It’s also best to know early on what extra money you’ll have to budget for on top of your mortgage. Most HOAs require a monthly fee, ranging from a couple of hundred dollars to over $1,000, in order to cover communal expenses. The average monthly cost for an HOA fee is between $150 and $300, but the exact amount will depend on your location and what the HOA provides.
3. What do the HOA fees cover?
Of course, this will vary between every association, but generally, HOA fees will cover:
- Utilities in the common areas
- Building maintenance
- Repairs in common areas
- Landscaping
- Building security
- Trash
- Amenities on the property
In some cases, they might also cover water, utilities in your unit, and cable/internet costs. Confirm with your HOA precisely what your dues provide.
4. What are the association rules?
No one wants to settle into your new condo unit only to find out you can’t hang all of your cherished Christmas decorations up. So, before you complete your purchase, ask for a copy of the Declaration of Covenants, Conditions, and Restrictions (CC&R), bylaws, and rules and regulations set forth by the condo association. These all might sound like the same document, but they’re different, and they each outline specific rules for the building. They also contain the legally binding regulations every homeowner needs to follow.
These rules might include what you’re allowed to have on your balcony or patio, pet restrictions, how much noise you can make, or even what holiday decorations you can put up.
5. How are the HOA and building managed?
If you’re in a larger building, the HOA association might oversee a professional management company. If you’re in a smaller building, all the individual unit owners might make up the entirety of the HOA board and have an equal say in the daily operations of the condo association. Either way, it’s good to know precisely how your HOA is managed and how the day-to-day operations work.
6. Do I need to attend condo meetings?
Almost every condo association will have regular meetings for owners to attend. You might feel it’s important to participate in every one of them to ensure you know what’s going on. Or you might think it’s best just to let the board do their thing. Either way, find out the requirements (if any) for condo meetings, so you know how much involvement you’re expected to have.
7. Can I see the condo board’s meeting minutes?
A condo association’s meeting minutes can tell you a lot about the HOA and the organization of the building. The minutes will usually include information on the association’s budget, upcoming projects, and if the owners have any complaints with the property or association.
8. Can I see the association’s latest financial report and annual budget?
Hryniewich believes the biggest misconception around condos is that HOAs are just there to take your hard-earned money. But he emphasizes that’s not the case, and the proof is in the financial reports. Take a look at whatever financial documents are available, including the annual budget, to see how much it costs to manage the property and how your HOA fees will be used. These financial reports will also show you how well-managed the property is and if you can expect any financial issues in the future.
