2010 Mar 23rd

The Top 10 Questions to Ask When You’re Buying a Hoboken Condo

1.  Is this property in a flood zone?questionmark

If so, you may need extra insurance to get a mortgage.  You can confirm it with City Hall.  Being in a flood zone does not mean that the property necessarily floods.  Just that it is within the bounds of a designated flood zone.

2.  What did the seller pay?

This gives you a pretty good clue to how negotiable they may be.

3.  Is the seller “underwater”?

If he or she is going to have to bring some money to the closing table you should know that going in.

4.  Is the building professionally managed?

If not, who takes care of the finances, maintenance, trash and snow removal?

5.  Are there any special assessments or have there been any in the recent past?

If the building isn’t being run according to its budget or there were physical problems or repairs needed you would want to know.

6.  How much is in reserves?

Enough to run the building and replace items like the roof that have a limited useful life?

7.  What other units sold recently in the building?

Knowing what they sold for will be invaluable information when it comes to pricing yours.

8.  How many tenants are there as opposed to owner occupants?

This may matter for your mortgage but also may give you an indication as to how much the residents care about the upkeep of the building and it’s management.

9.  Are there any lawsuits or arbitration actions pending against the developer?

Pretty obvious that if there are, there must be an underlying problem.  It may be addressed and cured but what’s the cost?

10.  Who lives upstairs?

Unless you’re on the top floor, no matter how well built the building, noise can be an issue.  It doesn’t hurt to know who would be on either side of you, too.

Posted by Lori Turoff | Currently 17 Comments »

2009 Jun 23rd

When You Buy a Hoboken Condo You Buy More Than Just the Condo.

What is a Condominium?

condominium, or condo, is the form of ownership of real property.  When you own a condo in a residentail building, typically you exclusively own your particular unit from the walls in.  The ownership of the common elements such as hallways, heating system, elevators, exterior areas, the basement and the roof is jointly owned by all of the unit owners and controlled by the condo association.  The condo association is made up of all the unit owners.  

The association elects a condo board that governs the association and runs the building.  Unit owners typically have voting rights that correspond to their unit ownership.  Sometimes is it one vote per unit, other buildings allocate voting based on percentage.  The percentage is determined by the square footage of the unit so people with the biggest units have a bigger vote.  Sometimes the condo board will hire a management company to assist in running the day-to-day affairs of the condo, like collecting the monthly maintenance fee from the unit owners and doing the banking, paying the utility bills, arranging for cleaning of the hallways and shoveling of snow.  The management company should not make major decisions that affect the unit owners – that is the job of the condo board.  After all, the board was elected by the unit owners.  So major expenditures like deciding to replace the roof or repair the boiler, and financial matters such as whether to increase the maintenance fees, whether to allow pets are all up to the condo board.  If there is no management company the board or other unit owners have to take care of everything in their spare time.  

Why Does The Condo Association Matter?

When buyers shop for a unit, very often they are very focused on features of the unit itself and don’t pay much attention to the association.  It is crucially important for the buyer to recognize that they are not buying just the condo unit.  When you purchase a condo, you are also buying into the condo association.  A well-run condo association has made provisions so that it has money in the bank for future maintenance and repairs.  That is why you, as a unit owner, pay monthly maintenance.  Your maintenance is used to build up the reserve fund gradually over time so that when repairs are needed the association has the funds to pay for them.  If a condo does not have sufficient reserves, the board will often decide to impose a “special assessment” on the current unit owners.  Since most of us like to know what our monthly expenses will be, getting his with a special assessment is not a welcome event.  This is especially important in older buildings – and many Hoboken condos are in buildings that were constructed 100 years ago.  If a building has not been well maintained over the years, the chances of problems arising are even greater than in a brand new building.

What Is the Hoboken Condo Buyer To Do?

When you are shopping for a condo you should focus on more than just the physical condo unit.  While it is your lawyer’s job to find out certain information during the attorney review period, after you’ve made an offer, it’s been accepted, you’ve agreed on a price and hired a lawyer, there is nothing that prevents you from asking some important questions of the seller  much earlier in the process while you are still shopping.  Some things you might want to know are:

I’m not suggesting that you put the cart before the horse and demand to see all the condo documents and financial statements before you make an offer (although in New York City that is quite common).  There is no reason a seller should object to answering these basic questions.  If they do, that just may be a red flag and you might want to consider other options.  With so many properties on the market in Hoboken today, there is no need to settle on buying a condo in a mismanaged building or one that is in financial trouble.

Posted by Lori Turoff | Currently 20 Comments »

2008 Mar 10th

The 3 Most Important Reasons to Pay Condo Maintenance Fees

Where Does My Maintenance Fee Money Go?

This is a common question I’m asked when working with buyers searching for a new Hoboken condo, especially when they are first time home buyers. Almost every condo association has the right to and requires the unit owners to pay a monthy fee, the maintenance fee. These fees typically range from $100 to $250 for smaller units and can be as high as $300 to $600 or more for units that are larger, or in more luxurious condo buildings like the Shipyard or Maxwell Place. So what is the fee, what determines how large it should be and where does the money go? Here are the three main uses of these very necessary funds:

1. Maintenance of the common areas of the building & grounds

2. To build up a reserve fund for future capital account item repairs

3. To the management company that manages the condo.

Condo Lobbies Cannot Be Left in the DarkHoboken Condo Hallway

You pay to heat and light your own unit but someone has to pay the utility bills for the common areas. The lobby and hallways of any condo building need lights and heat. Your condo maintenance fee pays the gas and electric bill. Some condo buildings in Hoboken even have a heated garage. Other regular maintenace items may include cleaning the hallways, taking out the trash and recycling, servicing the elevators, shoveling snow, landscaping, pool care, the doorman’s salary, and more. The fancier the building, like the Shipyard, the more it costs for things like pools, health clubs and elevators, security systems and doormen.

Every condo also needs insurance. Most Hoboken condos also need flood insurance. This is in addition to each unit owners homeowners insurance. Unfortunatly, Hoboken has had its share of floods and fires. What if your condo building were to be destroyed? Or the UPS guy trips and falls on the front steps of the building and sues the condo association? Insurance is important.

Roofs Cannot Leak and Bricks Cannot Fall

Beyond the day-to-day maintenance of the building (and grounds) there are certain big-ticket items in every building, especially in the Hoboken condos in 100+ year old buildings, that need to be repaired and replaced over time. Things like leaking roofs and crumbling brick facades. There are two ways to pay for this. The right way is to plan ahead and make a budget. The wrong way is by special assessment – the subject of another post.

Every capital item (roofs, furnaces, elevators) has a useful life. If you know your roof is going to last 10 years and you know about what it will cost to replace it you can figure out how much to put aside today so that the association will have money to install a new roof. This budgeting process should be done for each capital item. Add it all up and now you know how much has to go into the condo association reserve fund each year. There are rules about what can be done with the reserve money. It’s not supposed to be used for the day-to-day stuff. It’s for capital items only.

Who Has Time to Deal With This Condo Association Stuff?

Most of us are pretty busy and don’t want to deal with cleaning hallways, shoveling snow, figuring out useful lives and worse. Someone has to collect the maintenance fee from each unit owner, do the banking and pay the bills. For a fee, a condo association can hire a management company to handle these tasks. Of course the management company has to be paid from the condo maintenance fees, too. Some smaller condo buildings do choose to ‘self-manage’ but it can be a time consuming and thankless job. There are management companies that will, for a very reasonable fee, manage a smaller condo. When it comes to sell your condo in Hoboken, having a unit in a professionally managed condo building may be very attractive to potential buyers.

Posted by Lori Turoff | Currently 2 Comments »

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