About the Purchasing Process
There are several questions you’ll need to ask before finalizing any papers. Be sure you ask at each property if the developer or builder is taking reservations, or if they are going straight to contract. What are the deposit requirements and does your deposit earn interest? Does your due diligence need to be performed by a specific date? If so, what is the date? What about the timeframe for a rescission period and for close of escrow? This section will address some of the things that you’ll need to think about before closing the deal on your high rise dream.
Determine whether the property will be signed in the name of an LLC or a trust versus an individual. Additionally, ask questions about whether you can close your property the same way that it was signed. To properly budget your closing costs in advance, get an estimate on Homeowners’ Association (HOA) dues, additional assessments, and estimated taxes. Your Realtor® will be invaluable in navigating you through these steps.
When considering properties, find out what the assessment covers and what it doesn’t. Typically, assessments will cover expenses for items such as maintenance of common areas, trash collection, recreational facilities and other amenities. In some communities, assessments only cover exterior maintenance to units while in others, assessments also cover interior maintenance.
Managing Your Expectations
You’ve identified your ideal home, you’ve done your homework, and you’re ready to buy. There’s one more thing on your checklist, though: Resolve to manage your own expectations! Like any endeavor involving people, community association living is not a utopia. With all their inherent advantages, community associations are not unlike any human enterprise.
For those new to high rise home search process, HOA agreements are probably the least understood. It’s important to know that typical HOA fees cover the cost of the swimming pool, insurance for the exterior of the property and your maintenance manager’s salary, for instance. But the question to ask is how much is in the reserve fund?
A percentage of the HOA fee is placed into the reserve fund to cover current and future building expenses. As a potential buyer, you should be sure there is enough money in that fund especially if you’re planning to buy a home in an existing building. If it’s an old building, ask about the amount of reserve for making repairs. If the roof is old, needs replacing, and there isn’t enough money to replace it, then a special assessment is made to the homeowners to replace it. It can result in thousands of dollars that were not covered by the HOA.