The decision of whether or not to purchase a condominium is much easier when you have a more thorough understanding of what you would be purchasing. At closing, the buyer receives title to the new living unit along with a percentage of ownership in the common areas of the remainder of the complex. Shared space may include hallways, basements, green space, community rooms, recreation areas and anything outside the actual walls of your living space. This joint ownership is shared by all owners who automatically become members of the association.
An association typically has a governing body elected from the membership who is charged to carry out the bylaws of the organization. An individual can choose to be involved in the regular meetings or to just stay abreast of developments via newsletters or written notification if they prefer. This type of regular communication is customary with many of these living arrangements. Many associations will also contract with a management company who will take responsibility for the day to day affairs associated with maintaining the physical plant such as cutting the lawn, removing snow, cleaning the hallways, helping with transfer of title and maintaining the financial accounts. Outside audit of financial statements by a certified public accounting firm is also typical.
Every association charges a monthly fee that frequently is paid directly to the management entity. This covers the array of services needed to both maintain the property and provide amenities for the residents. A master insurance policy and the basic maintenance mentioned above are the norm. Additional amenities may also include a clubhouse, tennis courts and in ground pools. In some cases, water and sewer charges and cable television can be paid out of the group’s fees. It’s noteworthy to mention that a properly managed association will earmark an adequate portion of the monthly fee for reserves in the event roofs, driveways or other major improvements become necessary.
The first task at hand when you start thinking a condominium purchase might be for you is to locate all of those developments in the general geographic area where you want to live. The next step is to sort through the approximate pricing of communities you have identified and select those that fit your budget. Experienced realtors that are familiar with the towns under consideration can help you walk through these first two steps in under an hour. From here, the next thing is to walk through some units to experience what they have to offer. It’s my opinion that a simple drive by isn’t enough to truly experience what is being offered. You’ll need to keep in mind if you are scaling down that everything is going to look smaller when you are coming out of a house. For many, it is a bit of shock at first to attempt to envision your furniture in a smaller living space. Identifying what you must have and what you can live without in your new living situation is critical in order to make a sound decision. Do I need a dining room? Is a large kitchen critical? Would I prefer an upper or a lower level unit? Is a laundry in the unit essential? When you are moving from a house to a condominium, concessions are needed to make the transition to the lower cost and maintenance life style. The key is identifying what will work for you.
The American Planning Association through its Great Spaces in America program has named the Village of Kenmore to its top ten list of communities for 2009. Neighborhoods are judged on several criteria including architectural features, functionality, accessibility to services and community integration. The ten communities listed alphabetically by state are:
Bungalow Heaven, Pasedena, CA
Faubourg Marigny, New Orleans, LA
The Haymarket, Lincoln, NB
Village of Kenmore, Tonawanda, NY
Ladd’s Addition, Portland, OR
Franklin Historic District, Frankln, TN
Montrose, Houston, TX
Historic Hilton Village, Newport News, VA
Browne’s Addition, Spokane, WA
The American Planning Association had this to say about Kenmore:
“Buffalo’s first bedroom community and streetcar suburb, Kenmore is a quaint village with its own mayor, trustees, and police and fire departments. Here you’ll find tree-lined streets and exceptional views of the Queen City’s skyline. Sidewalks line both sides of every street making this compact neighborhood — one of the 100 most dense incorporated places in the U.S. (2000 Census) — a pedestrian’s delight. Nearly every residence is within a quarter-mile walk of a bus stop and low traffic volumes bring bicyclists to neighborhood streets.”
Service enriched condominium and co-op projects are beginning to surface in large markets in Illinois, Texas, Virginia and California with a particularly high concentration in the Chicago area. We have come to expect a monthly fee associated with a condominium that pays for capital improvements, exterior maintenance and common insurance, however, in this newly developed model an array of additional services are also included on an optional basis at an additional cost. These extra services could include meals, housekeeping, transportation, case management and personal care services such as an on-site beautician or massage therapist. According to Michael Hargrave, research director at The National Investment Center for Seniors Housing and Care Industry (ww.nic.org) about 30 to 40 such projects have been implemented or are currently under construction. The underlying concept driving this innovation in the real estate market is that “baby boomers”, more so than their prior generation, would rather own than rent thus making this living arrangement more appealing than assisted living as the service enriched condo can be sold when it is time to move elsewhere.
Two distinct types of these living units appear to be evolving – the simpler model includes only meals and housekeeping, whereas the “full-service” program includes nursing, medication monitoring, personal care services and various therapies. Similar to assisted living, an individual’s capacity to walk a certain distance is required in order to live at these properties. Developers are experimenting with both a pay-as-you go approach to the additional services as well as various meal plans. In some cases residents pay one monthly fee and then have a certain amount of points to use toward any of the aforementioned services they wish to purchase.
This type of development is not available in Western New York at this point, however, it’s likely that this and other innovative approaches to housing o accommodate the baby boomer generation are in our near future.
Why would you want to rent back a house you are trying to sell? Well, there are actually a couple of very good reasons. If you are selling and buying or perhaps even selling and then renting, the rent back or “post-closing occupancy” as it is also called, gives you flexibility. A major dilemma faced by someone who is both selling and buying is that the contract calls for you to be out of the property as of the date of closing. This means out of the property – literally packed and loaded at the time that money is exchanged. This can be a tall order particularly if you have kids, pets or any amount of furniture and the person you are buying from is not letting you in the property early which is the case about 98% of the time. It makes sense to build in a week or two of occupancy after the closing to reduce the stress that is generated by the situation.
The other advantage of the rent back for the person that is both selling and buying is that you can perhaps even negotiate an extended rent back of say, 45 – 60 days, to allow you sufficient time to identify your replacement residence. One of the hardest things about selling and buying is that you are not really free to buy in most cases until you have a buyer for your property. If you sell with the stipulation that you are allowed to rent back for an extended period of time, it gives you the freedom to go out and hunt for a property just like someone who has no contingency of selling. Your negotiating position is significantly stronger and you can buy with confidence that your efforts are not being wasted. You are quite likely to secure your next property at a lower price because you can promise contractually to complete the deal as written.
How does this work? The person who is renting back from the new owner typically pays the amount of the new owner’s mortgage payment, taxes and hazard insurance. It is typically broken to a “per diem” or daily cost. This amount is frequently collected at the time of closing. The renter usually converts their homeowner’s insurance to a renter’s policy for the time period and also pays for the utilities at the property until the agreed upon vacancy date. In some situations, there is a security deposit. If I was the new owner, I would want one in the event a wall I damaged by a mover.
Rent backs can make it all a little more complicated when you are negotiating a deal but that is the time to work it out. If you don’t ask the person buying your home if you can stay over for a week after closing until the deal is nearly consummated, the likely answer is “no”. Most people not only have their own plans in place, but their willingness to budge on a perceived benefit for the other party at that time is less likely. A little more complex, but handled diplomatically up front, this can be a tremendous benefit at virtually no cost to the home seller.