I am currently working with a buyer on a condo sale where everything appeared to be fine. The HOA had no litigation happening, most of the condos were owner occupied, and the HOA indicated the complex should qualify for conventional financing…yet 3 weeks in to the sale, we discovered the budget for the complex did not meet Fannie Mae’s standards (10% needs to be budgeted for reserves/maintenance). This nearly blew up the sale and is causing a 2 month delay, as we are now waiting for the HOA to revise the budget so the condo can qualify.
This is just one example of an issue that can arise, but there is a number of concerns to consider when buying a condo. In Bellingham.

Most condo associations have rental restrictions and are not allowing any more rentals. If you are an investor or even just want the option to rent your condo in the future, this is information you need upfront.

Here are the 6 questions I consider the most important:

1) Monthly dues amount? And what do the dues cover?
*Almost all include maintenance/landscaping/garbage/building insurance, but some include water/sewer and/or cable TV. Many have amenities such as a clubhouse, common areas, etc.

2) Do they allow rentals?
*Side note, if you are a parent with a student at WWU looking for a condo, almost all associations consider it owner occupied if your family member resides in the condo.

3) What is the current owner occupancy rate?

4) Is there any litigation happening with developer? Has there been litigation in recent years?

5) Is there any changes to dues or assessments being considered this year?

You can ask your buyers agent or the listing agent, or you can go directly to the HOA contact yourself to get these questions answered. Most condo associations in Bellingham and Whatcom County work with a property management company.

Most complexes are well run, and often times if the budget is done right, the monthly dues can pencil out very reasonably in your favor over costs of owning a single family home: (sharing the costs of water/sewer/garbage/recycle/exterior power/insurance and building maintenance). But there is many condos that have major issues that will affect your ability to finance or re-sell the condo.

Bottom line, it’s very important to do your homework before even going out to look at condos.