If you are thinking of buying or selling a condo in greater Fairfield County, it is exceptionally important to work with a listing or buyer’s agent who is familiar with the ins and outs of condo selling and purchasing.
The condo market has been flourishing in many areas of Fairfield County in 2013. Statistically, from January to July 2012 there were 1,039 closed condominium sales; in 2013 there were 1,302 closed sales for the same period — a 25% increase — along with closed sales averages on the rise 4%.
Condo ownership is very appealing to first-time buyers, (can be a lot cheaper to buy than rent), those who are downsizing from a single family home and those who might be looking for a maintenance-free second home that will be used for vacationing or part-time use.
What you own
A condominium can be an apartment styled complex, townhouse, converted multi-family house, or single family house that a developer has legally declared as a condominium. Each complex has specifically designed rules and regulations called CCR’s (Covenants, Conditions and Restrictions) which are publicly recorded deed restrictions and/or bylaws which are the rules for management and administration.
It is very important to understand that while you own the unit, the rules and regulations will have information on items like usage of common areas, number of pets and sizes, noise levels and how you may — or may not — be able to modify the exterior of your unit or surrounding common area plus a whole lot more.
A condo unit owner has ownership of his unit from the walls in. Then there are common areas of the complex including but not limited to outer walls, roofing, walkways, stairways, grounds, pool, tennis courts, clubhouse, roads and trails.
So, who manages the condo complex? It can either be a group of actual unit owners who run everything (typical with small complexes), or it can be a professional management company which oversees the entire complex. It is important to know who “governs” the complex and how good a job they are doing keeping financials and maintaining units and the whole complex in general.
Before you buy
When purchasing a condo, here are some important questions that a buyer must get answers to before making a decision to purchase:
• What is the monthly fee, or common charge, and what does it cover?
The fee and coverage will vary from complex to complex, but generally covers exterior building maintenance, upkeep of grounds and amenities, snow plowing of streets, garbage/recycling removal and master insurance policy. If purchasing, this is the first fee a buyer should inquire about since it could affect affordability and financing.
• Are there any pending or planned special assessments?
Special assessments are a one-time charge usually for a capital improvement like roof replacements, siding or paving that is payable by every unit owner. This assessment can be quite costly and add considerably to your monthly budget if payments are made over time. Investigate the history of past assessments.
• Every HOA should have a capital reserve fund to fund repairs that come up unexpectedly or even the capital improvements as mentioned in the previous bullet.
The general rule is the reserve fund should contain at least 10% of the annual revenue budget. If the condo is older, then this reserve should be even higher. Lenders financing a condo purchase look at this reserve fund to gauge the financial health of the association.
• Is there any pending litigation against the association?
Lenders again may look at this as a high risk factor or deny funding a loan due to the nature of any litigation.
• What is the percentage of owner-occupied units in the complex? What is the complex rental policy?
Many buyers do buy with the intention of living there for a few years then keeping the unit as an investment and renting it out. Having a high number of renters can spell trouble for resales as well as financing.
Step into the market
Condos are a wonderful way to get into the real estate market. It is a great segue into single family home ownership. Condos are also the perfect place to live for those who don’t want to do outside work or simply do not have the time to do so.
Provided you read and understand what the rules and regulations are for the complex you are buying into, and do a little research using the tips above, condo living can be the perfect fit. Your buyer’s agent should provide expert assistance in acquiring all the right information.
Just one reiteration on pets. If you do have a pet — or pets — make absolutely sure you check the rules on pet ownership. The last thing you want to find out is that you purchased a condo and your beloved pets, perhaps size or number, are not allowed.
Fairfield County has an abundance of condo complexes from ranches, to townhouses, to free-standing homes in all price ranges. As an example, Shelton has more than 30 complexes. There are plenty to choose from and, as the chart statistics show, condos have been very popular with buyers in recent months and have become the perfect choice for many buyers in Fairfield County.
A final word to the wise — If you are thinking of buying or selling a condo in greater Fairfield County, it is exceptionally important to work with a listing or buyer’s agent who is familiar with the ins and outs of condo selling and purchasing.
For more information, contact Barbara Altieri, Realtor, RealtyQuest, 30 Huntington Street, Shelton; 203-929-1752 or Barbara.Altieri@realtyquest.com.