Important Questions to Ask When Buying an Atlanta Condo or Loft
Taking the time to ask the right questions when you are in the process of shopping around for an Atlanta condo, loft or townhome can help you to make an informed decision and protect your investment down the road. To follow are six important questions to ask:
1) How much are the monthly HOA fees… and what is included? The HOA (Homeowners Assn) fee can vary from complex to complex, as well as the coverage. For example, one complex may pay for your water bill, while another may not. Those complexes with pools or other amenities often have a higher HOA fee.
2) How many renters reside in the complex in comparison to owners? Try to avoid complexes where there are more than 25% of residents comprised of renters. Some lenders do require that the ratio is 25% or less in order to secure financing. PLUS, as a homeowner, you want to ensure that other condominium owners are interested in maintaining their property so that your investment is protected.
3) How many of the units have been sold? If you are considering a newly constructed condo or townhome, this is a critical question for two reasons: One, your lender may require that at least 25 – 50% have sold (or are “under contract”) to ensure that the value of the property is stable and two, you don’t want your property value to go down if the builder deeply discounts the remaining 20% of the units just to get them sold.
4) How is the condo association managed? A professionally managed association should have a third-party property manager unless it is a small condo building or complex. Don’t be afraid to ask the seller or the neighbors how they feel about the association/management company.
5) Are there any current or pending Special Assessments? The Seller will have to disclose to both you and your lender if there is a current special assessment and/or if they know if one is coming up. Special Assessments are used to make significant repairs or enhancements to a building — when the Homeowner’s Association Reserve Fund does not have enough to pay for it. Special Assessments can cost hundreds if not thousands of dollars, so it is critical that you do your research. As a Buyer’s Agent, I always do a lot of research to ensure that my clients are protected, including asking for a copy of the HOA Budget and also requesting the last 12 months of HOA meeting minutes. Why? Sometimes the sellers do not regularly attend the monthly HOA meetings, so they are not even aware that a special assessment is being considered by the Homeowners Association.
6) Is the Condo or Loft Complex FHA Approved? If you are getting an FHA mortgage loan (requiring only a 3.5% down payment), it is very important to confirm that the entire condo complex or building has been pre-approved for FHA Financing. Certain criteria must be met (i.e. at least 75% are owner-occupied, no or low HOA delinquencies, etc) in order for the building to qualify for FHA approval. This criteria is intended to protect both your investment and the lender.
In today’s real estate market, there are some fantastic deals on Atlanta lofts and condos, but you need to do your due diligence to make sure that your investment is protected and you are truly ENJOY your new home!
If you are thinking of buying a loft or condo in Atlanta, please contact the Urban Nest Atlanta team at eXp Realty or you can start your search for a loft or condo right here!