When selling a condominium, there are several things that are important to keep in mind. While selling a condo is not all that much different than selling a single family home, there are some distinctions that should be made at the very beginning of the sales process. Your Realtor should be outlining expectations for you from the beginning in order to avoid any confusion in the midst of the transaction.
In contrast to single family homes, you will be gaining a large demographic of investors when selling a condominium. Condos are typically viewed as a better, more “worry free”, investment than a single family house and are often pretty highly sought after. Condominiums are especially hot right now with the baby boomer generation retiring. These are all great factors that will play a positive role in marketing your listing.
It is also important to keep in mind that mortgage qualifications are going to be a bit more stringent on buyers purchasing a condominium. For FHA financing, the complexes will have to be FHA approved. A sound Realtor should be explaining exactly what this means and whether it applies to you. If your HOA is not financially sound, or is having budget issues, it could pose a financing risk and banks will require 10% down even with conventional financing. Typically, the banks will want to see 10% of your HOA’s annual budget being held in reserves to be deemed acceptable. Most frequently, homeowners’ associations are in good financial order. It is still important to ensure you have an experience on your side to make sure that these issues do not arise in hindsight.
Before you list your condo, you are going to want to make note of a number of details regarding how your homeowners’ association works. You will want to make your Realtor aware of who the management company is, what the HOA fees are, what the HOA fees include, any pet restrictions, rental restrictions, and various other details that will undoubtedly be asked by potential buyers and their agents. If you happen to have a copy of the bylaws on hand, then it never hurts to have them available for questions. You will not be expected to furnish a copy of the resale package (includes newest bylaws, resale certificate, HOA financials, etc.) until you have a signed contract with a buyer. I typically recommend waiting until after the inspection contingency has been satisfied before ordering the resale package, as it does typically cost $150-200 or so on the part of the seller.
To get a better understanding of what selling your particular condominium might look like, reach out to us at any time for an interview!
Thomas Cody, Realtor, C-REPS