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Q. What is a condo?
A. A condo is a form of ownership that allows for ownership in a shared environment. For example, there is a unit of space (normally contained by walls) that is owned solely by an owner and then the remaining structural and exterior components are shared in common with the other community members. A condo can come in many forms, such as high-rise, townhouse; garden-style, marina & mobile home condos are all different examples of condos. Suggestion: Do not take a glance and guess, make sure what you are looking at before the wrong assumptions are made.
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Q. What does the cover fee cover?
A. The answer to this question is it depends. The exact answer will ultimately come from the Governing Documents. Condo fees vary, in large part, because each community has a unique set of Governing Documents. Items such as lawn mowing, building maintenance and insurance for the buildings & general liability are common for most condos. In other circumstances, utilities such as water, sewer, garbage, cable and heat may be included in other condos. Amenities like sprinkler systems, fountains, clubhouses, pools, tennis courts and cleaning services may also be included. Suggestion: Take time to evaluate the fee compared to the services provided and be sure to read the Governing Documents that will layout the answer.
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Q. Are Pets Allowed?
A. The answer to this question is it depends. The exact answer will ultimately come from the Governing Documents. Should the Governing Documents not have language addressing this issue, consult with the Board of Directors directly to get approval to ensure compliance with any regulations. Where pets are allowed, some restrictions may still apply so be sure to be informed of all assumed responsibilities. Suggestion: To guarantee no hassles with your pets, get prior written approval. Also, if pets are allowed, be courteous and pick up after, leash and contain the activity of your pet so as to not interfere with others enjoyment of the commonly owned grounds.
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Q. Is the community age restrictive?
A. As with pets, the answer to this question is it depends. The exact answer will ultimately come from the Governing Documents. Should the Governing Documents not have language addressing this issue, consult with the Board of Directors directly to get approval to ensure compliance with any regulations. Where age restrictions apply, some exceptions may be allowed. Suggestion: First, read the Governing Documents to determine the eligibility. If there is concern, get prior written acceptance.
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Q. What changes can I make to a condo?
A. This answer will come from the Governing Documents of the community. Typically, the interior space of the condo is up to the owner to paint, carpet & decorate as the owner sees fit. Structurally, any items that an owner would like to alter should at minimum need the approval of the Board of Directors and possibly overseen with approved contractors for the protection of the building(s). On the outside, most items will need Board approval. Things such as landscaping, decks, fences, satellite dishes, windows, doors and painting are all things that the community may have specific rules to keep up the uniformity and property values. Suggestion: Do not act without asking for approval. It is better to be safe than sorry. As with other things, if you wish to make changes and it would affect your decision to reside in the community, get written approval by the Board before purchasing.
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Q. What is the difference between a condo and a townhouse?
A. The architecture of condos can easily cause confusion as to whether a home is either a condo or a townhouse. Typically, townhouses are only connected at the sidewalls not creating a situation of having anyone above or below. Condos can also have this same design, but also come in other various forms ranging from high-rise buildings to boating communities. Other than the physical differences between condos and townhouses, the main difference is lifestyle. In a townhouse the ownership responsibilities are often times the same as a traditional single-family home. For example in a townhouse the owner would be fully responsible for roof leaks, basement leaks, lawn mowing and other routine maintenance. Further, owners of the connected townhouses may need to work cooperatively to have roofs and other projects done concurrently. In contrast, the maintenance and upkeep of condos is split solely between the owner and the Association. Due to this scenario, the fees for condos tend to be higher because of the increased services provided to condo owners compared to the services provided owners in a townhouse community. Suggestion: Be aware that condos and townhouses can look similar but have much different maintenance responsibilities associated with each. Try to match the level of responsibility for what best fits your lifestyle.
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Q. What is a cooperative or co-op?
A. A condo and co-op have some similarities. The big distinction is that in a co-op you do not own any real estate, rather you are buying corporate stock in the co-op community. The right to reside in a certain home within a co-op community is governed by a proprietary lease. Or put plainly, in a co-op you are leasing the right to reside in the community while in a condo you are a Co-Owner with the other members. There are many other differences, but due to the fact that co-ops have not caught on other than in certain geographic areas, we will go into further explanation. Suggestion: Due your homework and know what you are buying.
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Q. Are condos good investments?
A. According to statistics reported from the National Association of Realtors (NAR), the appreciation of prices of condos has outpaced the appreciation of single-family homes for several years in a row. Although return on investment is not guaranteed, condos have proven to be a solid real estate investment. Please review the following article for more info: (more). Suggestion: Ask your Real Estate Agent to provide the sale results over the past five years to get an idea as to where the prices have been going.
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Q. How do you finance a condo?
A. Some exceptions may apply, but the financing for a condo is the same as a single-family home. Suggestion: Get Pre-Approved before going to look for condos. This will reduce the amount of time spent looking by focusing on the condos in the correct price range as well as point out any potential credit issues. Also, request a copy of a Good Faith Estimate (GFE) from your Lender to fully discover all expected costs of closing as well as to obtain the estimated monthly expenses after closing. (More from Grand Oak Mortgage Company)
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Q. What are the rules of the community?
A. The Governing Documents or CC&R’s outline all of the restrictions that the community members are to follow. In order to fully answer this question, the documents must be reviewed for each community, as the restrictions will vary from one Association to the next. Suggestion: Ask your real estate agent to get a copy of the Governing Documents for your review and make any purchase agreement subject to your review and acceptance of the documents. In addition, an attorney would be beneficial in assisting a Purchaser with a review of the Governing Documents.
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Q. Where are the condos located?
A. Condos are now mainstream enough that most metropolitan and surrounding suburban areas have many selections to choose from. Suggestion: Consult your real estate agent to locate all of the locations of the condos in your desired price range.
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Q. What is a conversion?
A. A conversion is a space that was something other than a condo and was “converted” to a condo. For example, a past retail space or apartment building could now be a divided up to individual condo units due to conversion. This process leads to condos coming in all shapes and sizes. Suggestion: Not all condos look the same, to locate all of the condo options be sure to consult with your real estate agent to see all options.
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Q. What is a Site-Condo?
A. A site condo is a variation of the traditional condo. Generally speaking Site-Condos offer less service than traditional condos. For example, a Site-Condo Association may maintain the lawns and landscape but the building maintenance would fall entirely on the owner to cover (this is not the only example of possible difference). To add to confusion, Site-Condos may look similar to traditional condos. Due to the lesser services provided, a Site-Condo often times has a lesser monthly fee. Suggestion: The variations of Site-Condos are wide spread so be sure to review the Governing Documents for complete explanations. Being educated about your responsibilities will help you in selecting the condo that is right for you.
^ up Q. What type of Insurance and how much do I need for a condo?
A. The type of insurance for a condo is called a HO-6 policy. How much coverage is needed to be adequate to be covered for a loss will depend on what the Governing Documents detail. At a bare minimum, a condo policy should include coverage for all personal possessions. Typically the cost of a HO-6 policy is far less than the cost of the traditional single-family home policy. (more information pertaining to HO-6 policies) Suggestion: Provide to your insurance agent a copy of the Governing Documents in order for the amount of your coverage to be determined. Also, allowing the agent who could insure the condo review the Association’s policy will further prevent any inadequacies in the event of a loss.
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Q. Can I buy a condo and then rent it?
A. Yes, with restrictions. Commonly the length of the term rental may be dictated in the Governing Documents or even with local ordinances. Be sure to read the Governing Documents and contact the municipality in which the condo resides to determine the restrictions. In addition, the renters will be subject to all of the rules & restrictions laid out by the Governing Documents. Suggestion: If you intend to rent your condo, be aware of all of the restrictions and make the renters aware of the rules they need to abide by.
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If you have a question that we have not answered here please contact our office for more information.
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