I
got a call from a seller on
Saturday wanting to sell their home and move in to a condo to save
money. They
found the perfect condo and were ready for me to come over and list
their home
and put an offer on this condo. (This was a cold call, I had never meet
them
until that day.)
So, I went over to their
property and they were ready, they had done
their
homework and this was the plan and they were sticking to it.
You see
they had a
home that was worth about $225,000 and they owed only about $110,000.
(Perfect
so far) They had planned for commissions, they had planned for taxes
and the
condo they wanted to buy was only $75,000, so they would have nothing
left, but
they wouldn’t have a mortgage payment.
I pulled the comps on the property they were looking at, called a friend who lived in the condos and asked about the HOA and that is when I got hit with the news that I was going to have to share with this couple, that I’m sure they didn’t calculate in to their purchase. (THE HOA AND THE SPECIAL ASSESMENT)
I sat down with them and asked them all the important questions, like “Why are you moving?” Their house was the same square footage as the condo, the payments were only about $800 a month with taxes and insurance. So, why would you want to move in to this condo? So, their answer was good up front, but the news that I gave them stopped that sale right quick.
They wanted to move because they would no longer have yard work and very little payment because the taxes were so much lower and they were buying for cash. What they didn’t calculate was for the HOA and the special assessment that was coming up in December and that is why it was priced so low. The present owner couldn’t afford the special assessment and was being forced to sell.
You
see, come this December,
the HOA is doing a special assessment of $15,000 and the HOA will be
$650 a
month for the next 2 years! Their payments on something
they owned
outright
were going to be close to the $800 they were paying now and the only
benefit
they would have had was the yard work was being done for them.
Don’t get me wrong, condo
living can be great, I’ve owned one for a
couple
years now while my primary residence is being remodeled.
But, you need
to be
careful and make sure you read the HOA minutes and know how much the
dues are
before you put an offer in on one.
For more information about purchasing a condo in the Beaverton / Tigard areas, please don’t hesitate to call or email me anything, I would love to help you.
Todd
Clark - Broker / Sales Coach
Palazzo Realty Group
Phone: (503)524-9494
Fax: (503)622-8739
©2009 Todd Clark - Beaverton Oregon Real Estate and more: Down sizing from a house to a condo as a way to save money... May not be the best choice!
Todd Clark and the Friendly Home Team
Knipe Realty
Todd@IFoundYourNewHome.com
Phone: (503)524-9494
Fax: (503)622-8739
I am a licensed Realtor who specializes in Washington County, Oregon and also work in both Clackamas and Multnomah Counties including the cities of Aloha, Beaverton, Canby, Clackamas, Gladstone, Gresham, Happy Valley, Hillsboro, Milwaukie, Oregon City, Sherwood and Tigard.
All information contained in these posts are copyrighted and cannot be used without prior written approval authorization from the author me Todd Clark. If you are looking for an outstanding agent please give me a call I would love to help you with all your real estate needs.
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Todd, there is a lot of information buyers need to know when buying a condo - good for you for investigating. There can be law suits and if the developer hasn't paid contractors, liens against the property and lawsuits to pay them. There need to be reserves set aside for repairs/replacements. Who is on the Board of the Condo? Who is the Management Company? What is their reputation? How easy are they to reach? Condos can be great, but definitely do your homework!
Todd,
Wow -- that's some monthly assessment! What are they doing that costs $15,000 per tenant? Amazing.
Todd, Home owners dues are such a stumbling point for so many Buyers. I just testified in front of a HOA meeting for the Tenants, who have become clients. The board had an artificial 10% raise in the dues each year to raise their reserves above $200k. When the board passed out a spreadsheet, all of it was in red ink. They were not building on reserve, they were spending like crazy. Be very careful to make sure the HOA is on solid ground...
Thank-you for making me think this Monday,
Paul
Todd,
You're a good man! You did the right thing despite losing a listing and a sale. I believe and my experience bares me out that this sort of thing will reward you way beyond the short term loses. Referrals and the good will that this story will generate will last a very long time!
Well done!
Bill
Todd - Great detective work. Had it not been for your friend being a resident, finding out about that special assessment might not have been so easy. However, if a price seems to good to be true, there is usually a reason why.
I see this issue with condo's all too often...it is even something to consider for a condo that does not have current problems. A special assessment like that would make a property virtually impossible to sell to any informed buyer.
Todd, They really dodged a bullet. I wrote a post just last week about the importance of getting not only the decs and bylaws for a condo, but a current financial statement. So important!
We have looked a condos for us and decided staying here and having someone come in to do the yard maintenance and snow removal was just as manageable here as the condo and we didn't have to move.
I was thinking the same thing - what are they doing at the condos??? that is a heavy duty HOA fee! Yikes. ~Rita
Don't get me started. There are so many issues with Condos....it's just ridiculous. Good info for the consumer.
Kudos on the footwork and letting them know upfront what you found out. Paying $650 on something you owned, seems a little high.
I am amazed at how mis-managed a lot of these HOAs are. I think they are run a lot like government, they see the money they feel they have to spend it to get their own agenda passed and then when their is no money and something major happens they resign and sell their stock before the big assessment hits!