Tips on finding a condo you can sell quickly if you need to
Some of the best bargains in the current housing market involve condominiums. Though a singlefamily house remains the top choice for many, the simplicity of condo living is preferred by a growing segment of the older population. Also, more young adults are downsizing to cut housing costs. But real estate specialists caution condo buyers — at all points along the income spectrum — about the critical importance of choosing a unit carefully. Doing so will help to ensure its salability when you want or need to move.
“People who buy the wrong condo can find selling tough. That’s because market demand for condos is less than for detached houses,” said John Rygiol, a real estate broker affiliated with the National Association of Exclusive Buyer Agents.
Your emotional response to a building can be telling, noted Fred Meyer, a real estate broker who has sold homes since 1963: “If you love it wholeheartedly, chances are good that others will love it, too. That means that when you put it on the market years fromnow, it should be easier to sell.”
Here are a few pointers for those planning to buy a condo unit:
• Look for a community with a strong job base. It’s no secret that the vitality of a local real estate market is tied closely to the employment strength of the area. But, Meyer advised, buyers of condos shouldn’t count on a single employer to keep the local economy afloat: “You don’t want to buy in a onefactory town that would be badly hurt if that single employer closes. Look for multiple employers.”
How can you investigate the strength of the local economy? “If you want to get sophisticated in your research, go to the local chamber of commerce and ask what’s happening to jobs in the area,” Meyer explained.
• Check statistics to validate your hunches about the right condo building. Your emotional reaction to a condo building can be helpful. But you, along with your real estate agent, will also want to search out data that help you analyze the pros and cons of buying in a particular building.
“Look at the resale history for the building — going back for as long as four years. Notice especially the median number of days that it takes to sell units in the building. The more days it typically takes to go fromlisting to sale, the less liquid the building,” Meyer noted.
Also, he said that you should check the “reserves” of the building. Reserves are the amount of money that owners there have set aside for major repairs and renovations.
“If the building needs a new roof but there’s no money for this, all the owners could be hit with a big special assessment. A poorly financed building can become run-down, making it less desirable for future owners,” Meyer warned.
• Resist the temptation to buy in a building with very low association fees. Nearly all condo buildings impose monthly or quarterly association fees on all residents. These charges cover the cost of routine upkeep on a building and its grounds, along with support services such as a doorperson at the front entrance.
Rygiol said that some wouldbe condo buyers, to help reduce expenditures, sometimes shop for a building with the lowest possible monthly fees. But doing so could be a mistake, he said: “A building with very low fees might actually decline in value, due to poor maintenance. That could make your unit hard to sell in the future.”
• Try to avoid buying in a building with a large portion of renters. Home-buyer advocates are wary of buildings in which a large percentage of units have been rented out by their owners.
“Owner-occupants feel a natural pressure to ensure that a building is adequately maintained and has plenty of money set aside in reserves for future repairs and improvements. Renters feel no such natural pressure,” Meyer noted.
What percentage of owneroccupants is sufficient? That depends on the location of the building. In most cases, Meyer said, you’ll want to see more than half the units occupied by owners. However, this rule might not hold true in a resort community where seasonal rentals are the norm.
Even though it’s not wise to choose a building with a large number of renters, Meyer explained that it’s also important to avoid a building that prohibits owners from renting out their units if they wish to do so.
• Choose your unit wisely. Meyer said that it’s usually unwise to buy one of the most expensive condos in a building, such as a penthouse unit, unless history shows that, in the past, penthouse apartments with commanding views there have sold readily and for respectable prices.
He noted, “Buying one of the least expensive condos in a building with much larger and fancier units will help hold up the value of your property over time.”
Ellen James Martin is a Universal Syndicate columnist.
Condos present some of the best buying — and selling — opportunities in the real estate market.