If you are evaluating buying a unit in a condominium, you may be uncertain about what type of condo and HOA inspection you should do on the property.

Before we get into the types and scopes of home inspections for condos, let’s take a moment to understand how condominiums work and identify your areas of most risk. 

We have put some of the condo-specific vocabulary to better prepare you for the process of buying and inspecting a condo.

In addition, the definitions for some of these terms have a hyperlink for further information.

The most important thing to understand about a condominium is the homeowners association (HOA). The HOA is responsible for maintaining the parts of the building outside the walls of your unit.

It most likely has no assets other than the money you collect as a member of the collective building – the dues you pay to maintain the condo.

If you buy a condo with little cash reserves left over, low monthly fees, and a maintenance backlog, you may be acquiring a maintenance liability.

HOAs typically make up unfunded maintenance liabilities by assessing each condo unit owner. The special assessment is a one-time charge so that the HOA can perform necessary building maintenance.

If there is maintenance is necessary, the fees can be expensive. They can even be a significant percentage of the value of each unit.

However, when you buy a condo, your risk is usually the overall condition of the building in combination with the “health” of the HOA and not the unit insides.

 

What to Look For Before You Buy Your Condo

When you make an offer on a condominium, you will have an opportunity to review a resale certificate. Therefore, now is your moment to try and assess the overall health of the HOA.

Whiting this mountain of paperwork, there is some important information. Look for the reserve study. 

That is the document where the HOA projects the costs associated with capital improvements necessary for the building. Try and understand how thorough this reserve study is and if the maintenance budget is well-funded.

HOAs that have not done a reserve study or disclosed little information about building maintenance are often at greater risk for an assessment.

HOAs that demonstrate a proactive approach to building maintenance generally present lower risks of a special assessment. You can even look for an envelope study; this is when the HOA has hired an engineering firm to perform a full inspection of the outer skin of the building.

An envelope study shows a proactive effort to understand the extent of exterior maintenance necessary for costly building systems such as siding, decks, roofs, and windows.

Before closing on your condo, here is a condo inspection checklist of things to be on the lookout for:

• Mold (spots on the walls or windows)
• Cracked walls
• Water damage, including warped or sloping floors and walls
• Strange or unpleasant smells
• Adequate water pressure
• Check to make sure the electrical systems are all working properly
• Ensure that the A/C and other HVAC systems are functioning
• Check for gaps in the caulking in the shower and bathtub area, as well as the kitchen
• Get local insights at a free Home Buying class

 

Condo Inspections: Complete vs. Interior 

Most home inspectors offer two home inspection services on condominiums: complete inspections or interior only inspections. Interior-only does not include attics, crawl spaces, exteriors, roofs, parking garages, or other common areas.

Interior-only inspections are best suitable to large towers where it can be difficult for a home inspector to contribute much to the knowledge of building maintenance; there is too much that is inaccessible in these towers.

In most other cases, complete inspections are recommended. This inspection includes any attics or crawls spaces that attach to your unit.

The inspector will also walk around the exterior, get onto the roof if possible and walk through parking garages and basements.

Complete inspections are not as comprehensive as commercial inspections, but they will give you a pretty general sense of the overall condition of the building(s).

You can then take the information from a complete condo inspection and the HOA and try and assess the overall health of the condo.

You are probably wondering about the costs of home inspections. That can vary in the type of inspection you opt for, where your condo is situated, and how large it is. The average home inspection costs about $315.

 

A Note About Special Assessments

Just because a building is at risk of special assessment does not mean it is terrible to buy a unit there. However, some HOAs prefer low dues and periodic evaluations to maintain.

One way to visualize it is this: Imagine you are buying a condo that you feel is worth $200,000, and you anticipate a special assessment of $20,000 per unit, but you end up paying $160,000 for the condo. Good, right?

Special assessments are not the end of the world, but they make it complex to gauge the value of what you are buying.

Your objective when buying a condo is to team up to gather information with your real estate professional and your home inspector and then read the resale certificate to make your best estimate on the overall health of the condo you are buying.

To do this thoroughly, it is often advisable to do a full condo and HOA inspection. 

 

It’s your turn to be a homeowner in New Jersey

If you are interested in acquiring your new home, do not hesitate to contact our EXP Realty consultants. We guarantee quality attention and the best homes in the area, with personalized marketing strategies to achieve the most significant benefit.

You will not regret working with us because we seek your best interests. Our clients certify them.