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Monthly Archives: May 2016

Take These Advantage Using Home Inspection

home inspectionIf you are considering investing in a home and realizing your home buying dream, then first it is advisable to get a home inspection done. A home inspection report is of great value to home buyers.

If you are new to this, don’t you worry! In today’s post we’ll be providing you quality information on how to use home inspection to your advantage.

Home Inspection Checklist for Home buyers
First off, if you discover something about a home during the inspection that makes you uncomfortable about purchasing this home, make sure this matter is resolved in some fashion before signing your life away. However, once all that paperwork at closing has been finalized, now is the time to take care of all the small problems listed in the home inspection report.

The best time to handle these projects is before you move in and while you are moving and setting up your new home. Once you are settled and old routines are in place, you are less likely to pursue projects that are potentially disruptive to your daily flow, and some issues on that report require immediate attention.

Interior Home
Electrical: If the inspection report says that you need more load to handle the tvs, computers, printers, and other electrical items, do this as soon as possible, especially if this is an older home.

Heating & Air: Have the filters changed on both systems. It’s not a bad idea to do this twice a season, but they each need to be changed once a year at minimum. If the heating unit is nearing or past 15 years old, its efficiency is likely to be terrible. Make sure to replace this before the height of the season so that you won’t be left in the cold.

Water Heater: The limit on a hot water heater is around 15 years. If yours is reaching or past this age, have it replaced. If you are looking to save money over the long haul, consider an energy efficient model.

Ducts & Vents: Have the ducts cleaned at least every other year, but this process is inexpensive enough that it won’t hurt to have it done every year.

Make sure that the attic has proper ventilation. This is a key element to good energy flow through the house. If heat is escaping into the attic during the winter, you are losing expensive energy and reducing the life of your roof.

Insulation: Proper insulation matters most in the attic, since poor insulation can also damage your roof. Insulation can always stand to be added, and definitely should be added if it has been more than 6-7 years since insulation was last added or you have seen a steady rise in your energy bills over the last few years.

Exterior Home

Windows: If the windows haven’t been replaced in more than 20 years, they likely need to be replaced. If they are younger, they need to be caulked before winter hits every year to keep them running at the highest efficiency. Think about window tinting or other window treatments to help cool your home from the sun’s rays. Treatments will also preserve the color of the floors and furniture.

Roof & Gutters: Your roof needs to be in good shape to keep out the elements and keep your energy in. If it rains and snows heavily in your area and this roof is more than 10 years old, a new roof is in order. The energy savings will help to offset the cost.

Siding: If you have siding that requires painting, take care of this during the summer. If you have natural wood siding, it needs to be treated every 4-6 years. If there is any loose or hanging siding, have it repaired before the weather affects it any more.

Foundation: Are there cracks? Is this because of settling or some more serious problem with the soil or the structure? You might need to have an engineer shore up sags in the foundation or steps.

If your gutters are clogged, your gutters and part of the roof might come down. Make sure that the gutters and downspouts are securely attached and free of debris. We have gutter cleaning contractors across the country that can help with this.

This home inspection checklist also works for sellers to prepare their homes. So rather than having egg on your face when an inspector reports on obvious problems, you should tackle these problems head on. A home inspector in Denver once said “I’ve inspected over 5000 houses, and I’ve yet to find a perfect one.” So by no means do you have to spend thousands to get a clean bill from the inspector, but these are some key points you’ll want to address before anyone shows up with a clipboard.

About Condominiums

A condominium development can take the form of apartment-style complexes, townhouses or converted multi-family dwellings. What distinguishes it from other multi-tenant buildings is that the developer has legally declared it a condominium, and individuals can purchase units in the building or complex. In most states, this means that the development falls under specially designated laws and regulations applied to condominiums.

When purchasing a condo, the owner buys the title to his or her individual unit, up to the walls, but not including them. A common description of a condominium is a “box in the air.”

Common areas of the development, such as stairwells, dividing and outer walls, fitness centers and rooftop gardens, are under shared ownership. Each unit owner holds an interest in these spaces. In order to manage the maintenance and repair of the shared common areas, every condo development has a condominium association, also known as a unit-owners’ association. The association is elected by condo owners and makes communal decisions in the interest of the community.

Condo costs include :

  • Down payment, mortgage and property tax
  • Special assessment fees. These fees may be requested when an unexpected repair or planned modification exceeds the cost of the condo fees collected
  • Condo fees, otherwise known as maintenance fees. Condo fees are paid by every resident to help with the maintenance of the building, pay the salaries of groundskeepers, concierges or handymen, and provide luxury facilities such as a pool, gym or rooftop garden. Condo fees are paid monthly and are subject to change

Condo Associations and Fees :

The condominium association budgets and determines the condo fees for all units. Condo fees are typically determined by the size of your unit, how many units are currently occupied, and the projected expenses for building maintenance and repair.

Condo associations vary in their organization and expertise. Some questions you may want to look into are:

  • Does the association maintain a reserve of funds to pay for unexpected and potentially expensive repairs? This will help you determine whether you are likely to get hit with special assessment fees.
  • Does the development have any pending legal actions? Are there any disputes between owners, with developers or with the association that you should know about?
  • What is the association’s reputation in the building? Talk to other owners for comments or complaints about the association’s activities.
  • Has the association maintained the building in good repair? Do they handle repairs and maintenance before they become big problems? Before buying, it’s a good idea to get an inspection done on the unit you’re interested in, as well as the entire structure, to identify any potential problems.
  • Does the association have plans to add any facilities, such as a pool installation or gym, in the near future? This could cause a sudden increase in your fees. Ask to see the minutes of the last few condo association meetings, which should reveal any such plans.

Here are tips to use when buying  condo :

Determine Whether a Condo is the “Right Fit”
It’s very important to ask yourself before buying your first condo, “Should I Buy a Condo?”  As mentioned above, owning a condo is much different than owning a single family residence.  Weighing the pro’s and con’s is a must!

One major difference between a condo and a single family residence is the proximity to your neighbors.  It’s very possible you may have multiple neighbors condos attached to yours instead of your own, free-standing residence.  Can you envision yourself living that close to your neighbors?

Another important consideration in determining whether a condo is the “right fit” or not, relates to the maintenance that is usually included in the association fees.  If you enjoy cutting the grass and planting your own flowers, than likely a condo is not going to be the right fit.  Most condo communities include the lawn maintenance, snow removal (if applicable), and exterior maintenance.

Research Maintenance and Management Company
Knowing who maintains the property is extremely important!  Who is in charge of cleaning the common areas?  Is the work completed by an outside company or are the residents of the community encouraged to help with the upkeep?  A condo community that is not well maintained can be very frustrating and can also effect the resale of the condo in the future!

Most condo communities have a management company.  The management company is normally in charge of day-to-day operations.  This can include enforcing the association rules and regulations, handling questions from residents, and handling the condos finances.  When buying your first condo or tenth condo, if you have questions regarding the community rules, regulations, or fees, the management company is whom you should speak with.  As you can see, the management company plays a vital part in whether a condo community is successful or not.  If the management company is non-responsive or has a bad reputation, this is something that you should consider prior to purchasing!

Obtain Financing
Financing of a condo is not the same as a single family residence.  Just like purchasing a single family home it’s critical to get pre-approved prior to looking at condos as well as determining whether it is the “right fit.”  Obtaining financing can be tricky when it comes to purchasing a condo, as many lenders and loan products do not allow condo purchases.

Condos are very often purchased with cash due to the regulations of lenders and programs.  If you’re planning on obtaining a FHA (Federal Housing Administration) Loan, the first step is to make sure the condo community is on their approved community list.  Normally FHA requires that 80% of the units in the building are owner-occupied, so make sure the community is on their approved list, before falling in love with a property!

A buyer still can obtain a private mortgage for a condo purchase.  This often comes at a much higher cost, as many private lenders will require a minimum of 20% down on a condo purchase.  Purchasing a condo may not be the best fit if you do not have a substantial amount of money saved for a down payment.

Hire a Real Estate Agent Who Has Experience Selling Condos
Selling a condo is much different than selling a single family, multi family, or vacant land!  The purchase contract for a condo is not the same as it is for other types of residences.  There are different contingencies than the common contingencies that are in a residential purchase and sale contract.

One main difference when purchasing a condo is that most communities will require a contract to be signed in addition to the typical sales contract prior to closing.  The contract that a community will make you sign usually will state that you understand and agree to the association rules and regulations.

Due to these differences, it’s important you work with a real estate agent who has experience selling condos!  A real estate agent who has experience selling condos, will know how to guide you through the process and ensure important documents are not overlooked.

Know What the Condo Includes
This may sound like a silly tip, but it’s important to know exactly what the condo includes.  When purchasing your first condo, make sure you find out if the condo includes a reserved parking spot or additional storage!  Does the condo community offer additional parking for your guests who visit you?  Is the parking spot in a covered garage?

During a recent condo sale in Rochester, NY, the seller rented her parking spot out to one of her fellow community residents.  Fortunately, there was no long-term agreement between the seller and their neighbor!  It’s important you know that the parking spaces and/or additional storage areas are going to be available at the time of closing before you purchase the condo!  The last thing you want to find out is you have no where to park your car a week prior to closing.

Know What the Association Fees Are
In most condo communities, there is a monthly, quarterly, bi-annual, or annual fee that is required by each resident.  The association fees are used to cover common expenses such as insurance and maintenance.

A well-run condo community will be happy to share their financial statements to a potential purchaser.  It’s important to know when buying a condo that the community has a large amount of reserve funds in the event a major repair is required, such as a roof replacement.  Ask the community how the association fees are divided and where they are distributed too.

Association fees can also impact whether a buyer can afford the condo or not.  When approving a buyer, a lender is going to add the association fee into the monthly debts of the buyer.  If a condo community has a very high monthly fee, it’s possible a buyer cannot afford it, due to the high fee!

Know What the Association Fees Include
How much the condo community association fees are is a very important piece of information to know when buying your first condo.  Equally as important is knowing what the association fees include.  As mentioned above, the fees generally include insurance and maintenance.  Know exactly what the association fees include and what, if any exclusions apply.

In addition to the insurance and maintenance, association fees also commonly include lawn maintenance, snow removal (if applicable), landscaping, water, sewer services, road maintenance, and trash pickup.  In some cases, the association fees can even include the heating and electric!

If a condo community has additional amenities such as pools, fitness centers, tennis courts, or a clubhouse, these are able to be kept up from a portion of the association fee.  If these additional amenities are not something that interest you, than it is important to understand you are still paying for these amenities to be offered to other residents.

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Ask About Special Assessments
First it’s important to understand what a special assessment is.  A special assessment is typically a large fee that is charged to cover a significant project within the community.  An example of a significant project that would be considered a special assessment, is a structural repair to the condo.

Why is this an important tip for a first time condo buyer?  If a special assessment is in the future plans, it’s possible that the association fees can raise for a specific period of time.  For example, a condo with a monthly association fee of $400 could increase to $500 for a year to cover the expense of a roof replacement.  Any planned special assessments should be provided to a potential purchaser with full disclosure.

Review Association Rules
Seeing as most condos are in close proximity to one another, the communities association will have rules and regulations. Due to this, many associations will have lots of different rules and regulations, in order to “keep the peace” in the community!  It’s important to understand that unlike a single family home, you cannot make your own rules and do whatever you want.  In many cases, buyers don’t care to review the association rules and have their attorney review on their behalf instead.

Many communities will restrict the type of pets or if any pets are allowed period.  The last thing you want to find out is your animal is not allowed in the community!  Other common rules in many condo communities relate to whether a unit can be rented or not or whether there are quiet hours.  If you have ever had to deal with a bad neighbor in the past, you can understand why these rules are such an important part of a condo community!

Predict Your Future Plans
Predict the future?  Foolish, I know!  It’s impossible to know exactly what is going to occur in the future, but most people have a plan for their future.  This should be no different when buying your first condo!

A condos value typically will not appreciate as much as a single family residence.  This is why it’s important to have a good idea what your future plans are.  If you plan on remaining in the condo for ten years, then the rate of appreciation is not as important if you plan on moving in a year or two.  Just like knowing what  the future will hold for you, it’s impossible to know what will happen to market values in the coming years.