Thinking about buying a condo??

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The costs associated with buying a condo before you even make it to the closing table. 
Shane Jarmin, Jarmin and Jones Real Estate Group
Often I speak with condo buyers about the strategy on how to purchase a condo. There are hidden fees that you usually don’t hear about that you should be well aware of. What many don’t realize are the costs associated with that purchase prior to the closing. These additional costs are 100% necessary and being informed will make the process easier as well as make you more confident in your transaction. Below are list of the 4 major costs that you can expect on any condo transaction prior to closing.  
#1: Earnest Money:  Usually 1% of the Purchase Price – Goes towards your down payment
·       This is your ‘good faith’ money and shows the seller your motivation to purchase.  The more money you put down the greater negotiating strength you have.  I typically find this to be the most underutilized negotiating tool. 
·       Earnest money is not required, but is customary and I have never worked a transaction that did not have earnest money involved. 
#2: Inspection:  $250 – $400 – Prices vary depending on the time, size, and inspector.
·       YES!! Even condos need inspections.  It doesn’t matter how new and nice everything looks you should always get an inspection done.  I have never been to a condo inspection where there was not something that needed to be corrected.   Even on new construction!!!  
·       Inspections are not required, but highly advised.
#3: Appraisal:  $300 – $500 – Prices vary depending on the time, size, and appraiser.
·       If you are financing a purchase through a bank then the bank will require you to have an appraisal done. 
·       An appraisal will be required by your lender. 
#4: Condo Questionnaire: $80 – $150 – Prices vary depending on the property management company.
·       When your bank gives you a loan to purchase a condo they want to make sure that you are investing their money into a secure property.  The condo questionnaire is sent by your lender to the property manager and it will go into great detail regarding the financial position of the HOA, any current litigation, owner occupied vs. investor owned units, number of distressed properties, upcoming assessments, etc.   If your lender feels the property is too great of a risk they will not give you the loan. 
·       One situation in which you may not be required to pay for a condo questionnaire is if the condominium is self-managed.  Typically condos that are self-managed and not run by property management companies do not charge condo questionnaire fees.
·       Condo questionnaires are required by your lender.  
Keep in mind that the appraisal, condo questionnaire, and inspection are non-refundable costs.  Once you have spent the money it is VERY unlikely that you are going to get it back.  After all, this is how the appraiser and/ or Inspector makes a living.
Earnest money is refundable assuming you terminate the contract within your due diligence period or within one of your contingencies.  However, it is ONLY refunded to the buyer or given to the seller when all parties sign the termination and release agreement.  If one party (buyer or seller) does not sign the termination and release agreement the funds cannot be distributed.
So we hope that this will help you be more prepared when buying an attached home in the Atlanta area or any market for that matter. For more information on purchasing a home in the Atlanta area feel free to reach out to The Jarmin and Jones Real Estate Group.
Edited by: Albert Jones
Jarmin and Jones Real Estate Group 

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