Buying a Condominium?
Buying a Condominium takes forethought.
If you are considering buying a condominium in Rhode Island there is information you need to know. Have all the information at hand when making a decision to purchase in a particular condo complex.
Are you sure you want a condo or a single family house in RI coastal real estate? Explore your options.
As part of the Purchase & Sales agreement, the seller must provide the buyer of a condo the following:
- Copy of the Condominium Declaration
- Copy of the Condominium Bylaws
- Copy of the Rules and Regulations of the Condominium Association
These documents should be received after signing the purchase & sales agreement and received from the listing agent.
A copy of the Master Insurance Policy and the Resale Certificate is usually requested from the sellers just prior to closing. It is obtained from the Homeowners Condo Association or Management Company.
RI law allows the buyer ten (10) days to review and accept them. If during this period the buyer does not accept the documents, a written notice to the seller giving notice of this non-acceptance will require the seller to return all deposits to the buyer and the sales agreement is terminated.
So why is this important?
Well there are a number of things to be aware of as far as how the condo complex is being managed. Looking at the budget and upon reviewing documents one can determine whether the condominium complex is involved in any litigation or any special assessments for improvements to the building and services may become your responsibility too. Also, is the Homeowner’s Association (HOA) financially sound. You want to ensure that they have an adequate capital reserve fund for any problems that arise for the units.
When buy a condominium is the condo complex FHA approved?
Very important to determine if you are obtaining financing through FHA. Without having gone through the FHA approval process for the condominium complex, a borrower will not be able to get FHA financing. However, a buyer can purchase a RI condo with a conventional loan and putting 10-20% down to secure a mortgage.
Also, a buyer wants to know if there are any or how many of the condos in a complex may be in foreclosure, behind on
their HOA fees or investor owned. Remember when other condo owners are not paying their monthly share of monthly condo fees that burden can fall on the remaining condo owners. The documents should provide you with the number of condominiums that are in foreclosure status. A resale certificate is required by lenders from the sellers which will tell them most of the information mentioned here. The lender wants to ensure that the complex is sound financially.
I usually do not recommend buying into a smaller condo (6 units or less) complex for some of the prior reasons. Just consider your options carefully and talk with a North Kingstown Realtor that can guide you well.
You want to be sure you have an adequate base of owners to draw funds from when large capital improvements are necessary (maintenance is needed on all condos just like a home). When buying a condominium in a condo complex it needs to be well maintained by its owners to uphold its value. Plus peoples personalities in smaller complexes can impact the ‘joy of living’ in some smaller complexes.
Condominium Rules and Regulations are important to review in case there are items in there that were not disclosed to you earlier.
Such as having multiple or no animals (impacts later re-sale potential) or putting plants or grills on your deck, etc. Knowing that you have a monthly condo fee to pay and when it is due is important too. Living in the condo means that the condo association is the higher power here so learn to get involved so you have a greater say in the operation of the complex. Plan to be an active member of the condo association.
Your Realtor should review the documents too but if you are unsure of some of the items and want a legal review, your real estate attorney will be of great assistance to you.
The last piece of documentation needed when you are buying a condominium is the resale certificate…
The Resale Certificate is requested by the listing agent about a week prior to closing (depends upon the condo complex rules) and is needed for closing for the real estate attorney. The resale certificate should be reviewed thoroughly for any pending litigation, financial health against the condo. Ensure the capital reserves are ever present in the complex you are buying into. If all the documents provided are to your satisfaction, you will proceed to closing and have a new condo unit to move into.
Condo living provides less personal day to day maintenance and may be an option of living that truly appeals to you especially if you travel a lot, are in your senior years, live alone or just don’t want to take care of house maintenance any longer.
Give me a call and I will sort out the condo complex complexities with you in your condo search at 401.529.7849 or email me at RiByTheBay@gmail.com.
Are you Considering Buying a Rhode Island Condominium? Buying a Condominium?
Ginny Lacey Gorman is your go to North Kingstown Realtor® for real estate in waterfront RI real estate and beyond…knowing the geographic area, schools, happenings, important tidbits of information and businesses well. As a North Kingstown short sale agent, if you are having trouble paying your mortgage contact Ginny to help you through the short sale process successfully.
Waterfront, oceanfront, luxury and coastal RI real estate are her specialty but all of RI is her backyard. So feel free to search for RI Homes for Sale. When you are in need of a good professional for your buying and selling needs and an internet savvy Realtor® who sells RI houses in this real estate market - call Ginny at 401.529.7849.
North Kingstown, South Kingstown, East Greenwich, Narragansett, Jamestown, Exeter and Charlestown RI Homes for Sale – water front homes, ocean front homes, luxury, coastal and vacation homes…I service all of Rhode Island ‘One Property at at Time!”