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Answers (8)
- Ofe Polack, "Ofe Polack"
- Contributions:1418
When you write the offer request the condo docs and last minutes of the HOA
- John Taylor, "JohnATaylor"
- Contributions:17
You can request the hoa notes and what and where the funds are used. The financial reports are usually sent to all owners. Do your homework. Request that you get a hoa reprt while in the neog. process.
Contact your local Realtor
John Taylor
www.kingthompson.com/john.taylor
Contact your local Realtor
John Taylor
www.kingthompson.com/john.taylor
- Alma Kee, "Realtor Alma"
- Contributions:133
Write your contract so that your client will be given a copy of the most recent financials by the Seller along with the Condo Docs and at least 3 days after receipt to let her CPA/Accountant review and cancel if she so desires.
If what you're considering is an REO then you may have a problem getting your hands on the Financials. You might try writing in the contract that the Seller authorizes the Condo Association to release a copy of the financials to the buyer at the buyer's expense. Condo Docs are normally available online at your County Clerk's website but not the financials. If you're not familiar with how to search, contact your favorite title company and they may be able to assist you.
Here is a very helpful website about buying in a Condo or HOA:
www.ccfj.net
All the best,
Alma Kee
If what you're considering is an REO then you may have a problem getting your hands on the Financials. You might try writing in the contract that the Seller authorizes the Condo Association to release a copy of the financials to the buyer at the buyer's expense. Condo Docs are normally available online at your County Clerk's website but not the financials. If you're not familiar with how to search, contact your favorite title company and they may be able to assist you.
Here is a very helpful website about buying in a Condo or HOA:
www.ccfj.net
All the best,
Alma Kee
- Dave Matthews, "Dave Matthews"
- Contributions:14
As others have said, review the docs, financials, and BOD minutes. I like to review the BOD minutes from several meetings not just the most recent one.
- Kelly Adams, "Adamsami"
- Contributions:106
Melvin, I have two suggestions: 1. have the loan officer for your client check to see if the condo association is FHA approved. Pretty tight guidelines by FHA - if yes, it has at least got their blessing as it pertains to number of vacancies, foreclosures, and rentals and 2. attend the next board meeting.
- Wes Black
- Contributions:509
Buyer needs to request both condo documents and most recent year to date financial statements of the condo Asso .
- ProfessorBaron
- Contributions:303
Hi Melvin,
Ok, I am one of the Zillow Bloggers and recently wrote a post on this issue. You can read it here: http://www.zillow.com/blog/2011-08-19/risks-of-buying-into-an-hoa-community-–-buyer-beware/
and this one too will help clarify how HOAs work: http://www.zillow.com/blog/2011-07-25/demystifying-hoa-fees-and-special-assessments/
There are all kinds of issues with HOAs and if your client already suspects there is a problem...there probably is a problem. Underfunded reserves are the biggest problem, as are litigation, special assessments, vacant units/delinquent fees, etc. The issues can be ascertained by reviewing the BOD meeting notes, the audited financial statements, reserve study, lender condominium certification, and other docs. It's a challenging and time consuming process even for someone like myself. And I would consider myself a top expert at understanding the risks and issues from HOAs.
You get the docs, as you probably know, once you get the property into escrow. Rarely do you get all the documents you need from escrow, so you have to push hard to get what you need. I can email you a checklist and documents list if you like, it's a daunting list that I created...but it's the buyer's money at risk so they need to do as much as they can to understand the HOA risks and conditions....
Does she have the property under contract yet, or is she just looking? What causes her to believe it is in financial trouble.
Realize that no HOAs are in good shape but you need to avoid disasters...and many these days are in disaster condition.
Reply with answers and we'll go from there. Thanks!
Ok, I am one of the Zillow Bloggers and recently wrote a post on this issue. You can read it here: http://www.zillow.com/blog/2011-08-19/risks-of-buying-into-an-hoa-community-–-buyer-beware/
and this one too will help clarify how HOAs work: http://www.zillow.com/blog/2011-07-25/demystifying-hoa-fees-and-special-assessments/
There are all kinds of issues with HOAs and if your client already suspects there is a problem...there probably is a problem. Underfunded reserves are the biggest problem, as are litigation, special assessments, vacant units/delinquent fees, etc. The issues can be ascertained by reviewing the BOD meeting notes, the audited financial statements, reserve study, lender condominium certification, and other docs. It's a challenging and time consuming process even for someone like myself. And I would consider myself a top expert at understanding the risks and issues from HOAs.
You get the docs, as you probably know, once you get the property into escrow. Rarely do you get all the documents you need from escrow, so you have to push hard to get what you need. I can email you a checklist and documents list if you like, it's a daunting list that I created...but it's the buyer's money at risk so they need to do as much as they can to understand the HOA risks and conditions....
Does she have the property under contract yet, or is she just looking? What causes her to believe it is in financial trouble.
Realize that no HOAs are in good shape but you need to avoid disasters...and many these days are in disaster condition.
Reply with answers and we'll go from there. Thanks!
- David Barr, "dpbarr2000"
- Contributions:280
The association management should give you the financial statement if you ask for them along with the condo docs.
How do I check the financial health of a Condo Association
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- 5.0/5.0
- (5 reviews)
Contributions:56I have a Buyer interested in a condo however she is worrying about the possibility of the association folding. How can she find out what kind of financial shape the condo association is in?
Thanks in advance for your help
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