Dues and Don’ts

Monthly assessments, better known as Homeowner Dues to condominium owners, are made up of a number of combined costs necessary for the upkeep and smooth running of your condominium complex. Many buyers – especially first time condo buyers – are somewhat mystified by how their individual unit’s assessment is determined.

In general, your dues cover the upkeep of everything outside your “four walls”, i.e.: common areas, maintenance of amenities, exterior and roofs, insurance of various kinds and repairs when needed. When an unforeseen cost arises that hasn’t been budgeted for, homeowner associations may vote to impose a “special assessment” to cover these expenses if there isn’t enough in the reserves. While most well run complexes keep a healthy reserve fund for planned expenses, special assessments are usually implemented for unplanned occurrences.

Buyers sometimes ask why three similarly sized units of a similar age in different condominiums have widely varying dues. This is usually due to the type and number of amenities. A complex with no amenities will have far lower dues than one with 24hr. concierge, pool, exercise facility, onsite manager, etc.

It’s important to remember that the higher the dues, the lower the buying power for those obtaining financing. Depending upon current interest rates, a buyer may have $10,000-15,000+/- extra buying power for a $300,000 condo if the monthly dues are $100-150 less than another $300,000 condo with higher dues. This means that the buyer could likely qualify for a higher priced unit with dues of $200/mo. or only a lower priced unit with dues of $350/mo.

Each unit is designated a percentage of common ownership by the original developer based primarily on size and sometimes height, view, etc. This percentage governs not only what your dues are (compared to others in the complex) but the weight of your vote when voting for Board of Directors positions or a proposed rule or amendment to the existing CC&R’s. Carefully reading the resale documents, recent homeowner association meeting minutes, reviewing the current budget and the Reserve Study for the complex is the best way to understand how the dues are being allocated and if the finances are being handled in a fiscally responsible manner.

Shh… My Condo’s For Sale

Every now and then, I am contacted by a potential seller who is dead-set against advertising that their home is for sale or having any kind of signage to alert passers by of the availability of the property. This is especially true of some “high-end” condominium complexes. Some even prohibit a generic “Contact Your Broker” sign!

The scripts for this rationale are amazingly similar and usually fall into one or more of several categories:

 

• “If you know of any buyers looking for a property like mine, I’ll pay you a % of the sales price – but I don’t want to put it on the market.”
• “I don’t want the neighbors to know I’m selling and have them traipse through my home during an Open House.”
• “I don’t want the hassle of having my home ‘picture perfect’ for showing every day.”
• “Having no ‘for sale’ signage of any kind is a mark of exclusivity for a high-end condo community.”

If this sounds like you or someone you know, it’s time to get on board with 21st century marketing! With the reach of all the real estate oriented websites, as well as real estate company and individual agent websites, the number of potential, serious buyers who have access to your property’s information is hundreds if not thousands of times more than the number of people who may pass by a “For Sale” sign or actually be working with an individual agent.

As for letting the neighbors see that your home is for sale, they are often the best ambassadors for a seller since they know the neighborhood and may know people who are looking to move into the area or condo complex!

In the age of the Internet, most buyers start their search online and the main marketing tool that engages them enough to call a REALTOR and go see the home is the quality of the PICTURES! Yes, it may be a hassle to prep your home for sale and keep it looking “picture perfect” for showings, but it will take much less time to find your buyer than just waiting for the right buyer to drive down your street by accident or contact your “agent friend” whom you’ve asked to bring any clients they may have that are looking for a property like yours.

Last but not least, exclusivity may sound attractive however everyone will be a seller at some point. The more buyers that are exposed to your listing, the better chance you have of getting the very highest price. Even the wealthiest among us can appreciate that!