12 Questions You Must Answer B
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Buyer’s Want To Know… If Only Buyers Knew to Ask |
“...Any personal property that does remain is of NO VALUE for appraisal and mortgage loan purposes…” |
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| Most buyers are from out of town and therefore from a totally different market place. What are condos worth ? What are you getting yourself into ? What are these monthly maintenance fees ?
Don’t let these questions scare you. They are sensible questions that everyone should ask. Get the answers first and then decide. Owning a condo at the beach is not just for the rich and famous. It is a treat and a reward for yourself. You must first ask yourself “Why am I buying? This often times will dictate the number of bedrooms, baths and amenities. Whether strictly for investment or a getaway for the family, everyone has their own motivation. If you are planning for retirement then think of this like buying your first home. In reality you probably will not retire in the condo you choose. However, like your first home, you have started the hedge against inflation. And if history is any indication of the future “waterfront” inflation is good if you own and not good if you don’t.
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12 Questions You
1) Re-Sale vs. Pre-Construction
Each has its pros and cons. With a re-sale you can see, feel, and touch your unit today. You know exactly what the view and property looks like. There are various ages of property with varying degrees of wear and tear. These factors must be satisfactory to you. The advantage is you can occupy a re-sale today and there are actual rental histories available to review. There are more risks and rewards associated with pre-construction. You get to decorate your unit exactly the way you want. You just are not sure exactly what the quality of construction or view will be. Also, it may be one year, two years or longer before the condo is built and you can occupy it.
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2) How much down payment? Purchasers with good income and credit can usually borrow as much as ninety percent of the purchase price. “I just want the rental income to break-even.” No problem, every unit will break-even if you put enough money down. Ask your real estate agent to see actual rental histories. 3) New vs. old ? Price will probably be a little lower and the square footage a little larger for the condos built in the 1980-1986 time frame. The trade off is the wear. 4) What is this Monthly Maintenance Fee ? This fee covers expenses which are common to all owners. It usually includes water & sewer, common area maintenance of any amenities, landscaping, common area taxes, flood insurance and basic cable TV . Also, a reserve is usually established for future maintenance of the building. The age of the building, type of construction and type of amenities plays a big part in the amount of this fee. |
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5) What other expenses ? The good news is most expenses are covered in the monthly maintenance fee above. Other expenses include:
6) Read the Minutes, but not for every complex you consider. Wait until you have narrowed your choices down to one or two complexes . When you submit your offer include a contingency to review the minutes and annual budget. Your agent should know what language to include. 7) Understand the insurance because all insurance is not always the same. Some policies are replacement cost and some will replace to the stud wall only leaving the sheetrock, flooring and appliances for your contents insurance. You need to know the difference to set the limits for your contents coverage. The difference in premium is not that significant but you should know who is covering what. If possible use the same carrier for your contents insurance that was chosen by the homeowners association for the building. This way one carrier cannot deny coverage and point the finger at the other carrier. |
insurance that was chosen by the homeowners association for the building. This way one carrier cannot deny coverage and point the finger at the other carrier. 8.) What VIEW do YOU want ? Are you more sensitive to price than your view? You can save twenty five thousand dollars ($25,000) or more if choose a complex across the street from the beach. If you have to be on the beach side of the highway you can still save twenty five thousand if you go with a Gulf 9.)Do you like high or low? Most complexes are either three stories or a high rise (eight to sixteen stories). The low rise are usually wood frame construction whereas the high rise are concrete or a combination of concrete and steel. 10.) Which amenities are a must ? Substantially all complexes will have outdoor pools. The next level of amenities include indoor pools, tennis courts and exercise room. Most upscale developments will offer all of these. A few even offer boat dockage. The choice is yours.
View (this is when your unit and balcony are on the side of the building perpendicular to the beach) instead of a Direct Gulf Front (facing the beach from your balcony with no obstruction. Just remember price is determined by location – location– location. |
11.)What about appraisals ?
99% of all re-sales will be sold furnished. However, the preprinted language in the Board of Realtors Purchase Agreement specifically states “...Any personal property that does remain is of NO VALUE for appraisal and mortgage loan purposes…” This is due to banking regulations against making loans for furniture. The reality is the bank appraisal may not be as much as the sales price but this is not uncommon. 12.) Should you get a property inspection ? There is a risk in any property regardless of age. This is the risk and reward scenario. Most inspections will cost about $250. That’s your risk and if required is paid by you. Inspections for brand new pre-construction is probably not necessary since all appliances will be under warranty by the manufacturer and the building by the developer. Next are re-sales which are either rented or not rented. If rented there is a better chance that everything is in working order because the renters will let the management company know otherwise whereas a non-rental has a little more exposure. Use your better judgment. For more information about about our exclusive Buyer Profile Program call Mike Mitchum at 948-1230 (800)375-2115 RE/MAX of Gulf Shoresã 2006 Not intended to solicit properties currently listed for sale Copyright
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