How to Qualify a Building Before Buying
When buying a condo there are many things you should look at besides the particular unit. You should be aware of the condition of the building, the financials, and who is managing the building on the day-to-day.
Here is a list of what you should look out for:
1. Building Reserves/Financials
Ideally, the building should have at least 10% or more of its budget set aside for reserves. If you are financing, this is especially important because the banks will look into this and possibly not lend to you if the building does not have the required reserves.
2. No Litigations
Make sure there are no open litigations or lawsuits against the building or the association. It'll be more difficult to get a loan from a bank if there is a lawsuit against the building.
Are there any open or upcoming assessments?
Make sure you are aware if there is an assessment, how much it is and how long it is for. Make it clear if the seller will pay for the whole assessment or if you, the buyer, will assume the payments once purchased.
How responsive are the people in management?
How involved and helpful are the people in management?
It goes a long way to have good management. After all, those are the people running the building that you’re buying into.
5. Overall Maintenance
See that the amenities and overall building are well maintained.
6. Renters vs. Owners
What is the percentage of owners vs tenants?
Ideally, you want to live in a building that has more owners living in it than tenants. Tenants never take the same care as an owner.
With more owners living in the building, the less transient the building will feel. There will be a less turnover of people.
7. Flood Insurance
If in a flood zone, make sure the building has a reasonable deductible for flood insurance. You don't want a high deductible. This is something banks look into when they are lending.