- Find latent sellers. In this buyer’s market, many would-be sellers are holding back. If the units you’re most interested in are not officially on the market…ask! Their owners might be delighted to strike a deal with you.
- Work the built-in social network. Condo associations have newsletters, intranets and social gatherings that you can leverage to get the word out about your interest in buying.
- If you’ve got particular units in mind, mine public records to find out who owns them. Then contact the owners directly to open a conversation, recommends Jaime Uziel, a San Francisco attorney with Sheppard, Rosen, Uziel & Sussman who specializes in by-owner sales. He says he has handled numerous transactions that stemmed from buyers reaching out directly to owners.
- Make sure you understand the underlying dynamics inherent in the size and complexity of the condo association. Yes, politics abound in larger condo associations, but the downside of very small associations is the inability to break stalemates. “When you have a smaller group, the personalities come into play more,” says Uziel. “With two-unit buildings, there is no way to break a deadlock. If one unit votes yes and one votes no, you have a problem.”
- Inspection of the unit should include both the traditional inspection of the physical condition plus a pest control inspection.
- Inspection of the common areas should include not only the building that includes your potential unit, but all buildings owned by the condo association: garages, club houses, pools, sports facilities, parks and all other grounds.
- Expect it will take your real estate attorney 15 to 25 hours to help you with negotiations and to review the contract and related paperwork.
- Scrutinize the association papers not just for current reserves, liens, and lawsuits, but also for pending complaints that could turn into lawsuits, special assessments and other financially draining problems.
The seller should provide you with these essential documents:
- Copies of the legal description, including parking & storage spaces
- CC&R – Covenants, Conditions and Restrictions
- Articles of Incorporation
- Rules and regulations currently enforced
- Most recent financial statements of the homeowners’ association
- Current operating budget
- One year’s minutes of HOA meetings