Kris sent me a text in early November saying that she wanted to start looking for a condo. The end of the year isn’t always the most opportune time to go house shopping because there are less homes on the market. Both because people don’t want a bunch of potential buyers tromping through their home in the winter time, and they don’t want to disrupt the flow of their holiday celebrations.
Buying a condominium requires a bunch more patience than purchasing a home to begin with, because there are several other layers of complication. The largest of which is finding a condominium complex that has a good homeowners association (HOA) that is well run, well financed and free of any current, or upcoming assessments that require big outlays of cash by the owners, new or old. To increase our challenge, Kris was buying using an FHA loan. The Federal Housing Authority requires that for buyers to purchase a condominium, the complex must be an FHA approved complex. This narrows the field of options quite a bit as many condominiums don’t want to, or don’t qualify to go through the process to get “FHA certification“.
Undaunted and full of patience we started our search with realistic expectations. At the time, there were only four condominiums available that were FHA approved, and only 3 that were within her desired price range. We visited all 3 and 2 were immediately ruled out for condition and/or guest parking situations that were completely inconvenient.
There was one possible contender that was well-maintained, had some recent updates, and had a layout that she liked. However, it backed right up to a freeway, and also not only had a situation where guest parking was less than ideal, it also was a huge complex that was half used as rentals that were managed by a separate management company. In reading the reviews of the apartments it seemed like it could be a place full of challenges.
Kris was just about to ask me to write an offer on it anyway when another condominium, in a different area, had a serendipitous price drop. The price was still slightly outside her comfort level, but after we assessed the benefits of a quieter, prettier complex with convenient guest parking and the likelihood that these features would increase the ability to resell should the time ever come, Kris was convinced that we should go for it.
As often happens in a market like this, once a property experiences a price drop, it can suddenly become one that several buyers are interested in. As such, we entered into a competitive offer situation, but emerged, triumphant and began the transaction process!!
As mentioned before, on top of the typical hurdles of buyers inspections and the property needing to appraise at value, usually the biggest challenge in purchasing a condominium is the research and analysis of the homeowners association, and how well it is run. There’s a special time period in real estate transactions for the buyer to do their due diligence and thoroughly investigate all aspects of how the HOA is run. Fortunately, in this case, once the seller provided us with the piles of documents required (meeting minutes, bylaws, reserve study & CC&Rs, etc) Kris’ analysis showed that the HOA was very solid, well funded and run well. On top of that, the property inspected well and the appraisal came in above sales price!
Just a few short weeks later, I was privileged to be able to give Kris the keys to her new condo just in time for the holidays!
