Critical Factors when Buying a Condo, Loft or Townhome
By: Laura Tracy
Number of Units
Question: Why is the number of units important? Answer: resale competition!
When you go to sell the condo, you need to be aware of the amount of competition you may have from other sellers in the development. Buying in a building where the only difference between 200 units is the hardwood floor color, the type of counters and the view usually means the lowest priced condo is going to be the one to sell. That’s not always a bad thing if you bought at a steal below others and if the building overall appreciates… or if there’s simply not that many units in the development, but it can be a difficult sale in a buyers market (of course, you can get a great deal when buying in this situation! There’s some developments out there now with these bargains).
HOA Fees
One of the best ways to decide if HOA fees are reasonable is to figure out the HOA fees per square feet of the home. Then, compare this amount to other condos with comparable amenities. In Midtown fees in buildings with pools and concierges generally average 27 cents per square feet and go up to 33 or 34cents. Some are that same cost but offer no amenities while some buildings are off the charts when it comes to HOA fees. If HOA fees are too high or are on the rise, this can cause loads of trouble at resale, from deterring buyers completely to pushing the overall selling price down to compensate for the fees. And of course low condo fees are a huge bonus when buying or selling! Some of the best HOA deals intown are Glen Iris Lofts, The Dakota, Peachtree Lofts, and Morningside Place.
Legal Entity: Fee Simple or Condominium
A fee simple home does not share common areas or ownership in the property, and associations are not responsible for any part of the home. Condos by their structure share walls and part ownership in the common areas (lobbies, elevators, etc). Fee simple many times is also defined as homes where you legally own all the land under the property and all the air space above. In a condo this isn’t possible as other units are above and below. Some townhomes are ‘fee simple’ and some aren’t. Those that aren’t have associations that usually take care of all exterior maintenance, many times even the roofs of the units. With Fee Simple townhomes owners are responsible for lawn maintenance and all other exterior property maintenance with their unit.
7 Day Right of Recession
When buying a new construction Condominium you have a 7 day right of recession (to cancel the contract entirely) from the time that the condo covenants, conditions, and restrictions are provided to you as the Buyer. Covenants, Condotions, and Restrictions (CCRs) contain all the rules, budgets, and vendor contracts for the Association. If you don’t like anything in the CCRs, you can cancel the contract. In the event you buy a resale condo (not new construction), we'll craft the contract such that you will still have a chance to review the documents as well as the condo budget with the option to cancel within a few days of receipt of the information. Note: if a townhome is legally Fee Simple, and therefore not a ‘condo’ legally, this Right of Recession does not apply.
Stability of the Association and Fees
I also suggest we write our contract with a special stipulation requesting the condominium association meeting minutes for the last 6 months and latest financials as part of the contract. This is so that we can review the latest events within the association and catch any pending large issues that may impact the you and the fees once you own. If there are issues, we can cancel the contract. I also request name and number of the president of the HOA and/or management company so you as the potential Buyer can speak directly and candidly with those over the association, to gain additional insight on any issues.
Each property has pros and cons. We’ll assess and compare the different spaces from each of these angles as we go! Call today to get started: 404-371-5841.
www.LauraTracy.com