When purchasing a property, how do you know for sure if it’s a condo? Maybe the better question is: When should you know if it’s a condo? That answer is much easier: Immediately.
One of the comments I get all the time from Realtors is “I thought this was a condo” when actually it turns out to be an attached PUD which changes the ball game pretty significantly. Some lenders treat attached PUDs as condos, some don’t…either way you’ll cut out the heartache if you know the ownership type from the giddy up. Basically, the type of property makes a HUGE difference in the approval process and most of that is due to the level of complexity in terms of the underwriter’s investigation of the property. (Actually, if you are a seller, the best tactic would be to have your listing agent get the condo questionnaire filled out when they take the listing to remove the guesswork and facilitate the lending process once your buyer is found.) For you buyers out there, it is really essential that you know exactly what you’re buying as soon as possible as condominiums present specific “trials” that are best met head on. The definition for a condominium according to MortgageCurrentcy.com is: ‘A form of ownership where units are owned by individuals but the land and common areas are owned jointly with all owners.’ Sounds deceptively simple, doesn’t it? At the end of the day here are a couple of down and dirty things to be on the lookout for:
- Do not rely on what it says in the MLS or based on what the seller says; get a copy of the legal description. A quick tip off would be the inclusion of the lot in the legal description; condo ownership does not extend to the lot it’s constructed on.
- Don’t let the name fool you. The subdivision can call itself anything it wants, but it doesn’t matter what the brochure says if those are condos behind the wrought iron gates.
- Do rely on the tax appraiser as a good resource, they are sure to charge you appropriately for your ownership, so they will know the classification of the property.
At the end of the day, the purchase of a home has gotten more complicated, but a little homework and a lot of disclosure will enable success.