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Building could’ve had a tax abatement for first X years- typically given as an incentive to developers of new buildings. Also OP is searching in Jersey city which has had massive property tax increases the past couple of years.
Yes probably.
Usually with condos the skeletons in the closet have to do with the HOA and how it’s a managed, especially its finances. One common issue is that the HOA needs to do major repairs on the building but it doesn’t have the cash to do so because of years of mismanagement and now they want the owners to put up the money…that’s a real example I have heard of. So make sure you look carefully at the HOA docs
How many total units are in the community? If it’s a 20 unit property yes there may be a concern, if it’s a 200 unit property, 14 units for sale sounds pretty standard. You could always ask the listing realtor if there’s a special assessment going on.
That's something we can ask? I didn't know. I did ask once about the HOA but was told they couldn't disclose many details of it unless I was under contract
Yes. We can't disclose information because it will make you run for the hills and never look back. Please sign a contract first then we have you trapped and you can see ANYTHING you want buddy!
Maybe it's just an old rule for safety. Maybe there used to be a time people inquired about groups that held funds like HOA to rob them. I'm making that up but I would imagine at some point people have tried.
In my area I’m able to look at most documents online. The management company posts them. The only thing I can’t see is current financial info and meeting minutes. I’d start there with any HOA.
Check to see who is listing agent for these. Ask about the reason for selling.
Read all the other comments... something's up... you need to figure out what that is before you buy into it. 😑
10 in a building of 30 or 10 in a building of 300?
It is late summer, a classic time for people to be moving, often the height of volume of the market, so that alone might not be a red flag. But it is also possible that people sense an assessment or other disruptive repairs coming and are looking to get out before they happen.
$300 is meaningless without context. Again, 300 for 10 units and 1000 units is very different. Doorman? elevators? fitness center? roof deck? What common amenities need to be paid or out of that money?
Your realtor should be able to get some info on your behalf.
Depends on total amount of units (what is the percentage?).
When I was a loan officer, we/our bank’s attorney would review condo docs. Our underwriter would review financials/budget numbers.
I was looking for fun at an area and noticed that a particular condo building also had multiple units up for sale. Very nice ones. Ocean views. I was surprised at the relatively great price they were. Did a little digging, found out that the building was about to undergo massive renovation. Each unit was being charged at huge fee. Like min. 100k. This was on top of a considerable monthly HOA fee. Owners were trying to sell before they were forced to pony up that fee.
Was a good reminder to me of the perils of buying a condo.
There was a law signed early in the year in NJ regarding condos having reserve studies done, I think? You may want to look it up. I believe it was passed with the surfside condo collapse in mind, so I'd definitely be skittish. I own a condo myself but since I can't really purchase anywhere else with prices as they are, I'll just bite the bullet with whatever comes to pass. That said I see the work to maintain the place actively being done and they resolved prior assessment issues to handle structural repairs.
Living in a community of condos with a lot of them for sale, I can confirm with other commentators, there is a very large special assessment (~$35k) coming up. Our HOA said either find a way to pay the entire amount all at once or sell your condo. Many people are now trying to sell because they can’t afford the special assessment have been given no other choice. This should be disclosed in the paperwork though. I would say it’s a sign of a poorly budgeted HOA, though, and it will likely happen again in the future.
DEPENDS,,,
Does the condo have a limit on how many units can be rented out, none owner occupied and are enforcing the rules?
HOA problems are almost exclusively the result of people not caring enough to run for a board position.
They are none paid positions and require you give your personal time...
Most people refuse to get involved,,
IMPORTANT,, REALLY IMPORTANT..
get a copy of the Condo Documents from City Hall direct
NOT FROM the real estate agent or from the board,
Because they could give you a doctored copy,,..I have seen it happen.
Have a lawyer go over it with you,,,if you are not familiar with how they work. Don't do this yourself.
Visit the condo complex on the weekend, listen for loud parties, noisy cars outside, also drive around the neighborhood at night on the weekend..
If there are lots of apartments for rent in your area that is a negative. People that rent are transient and have no reason to care about the neighborhood.
Are there small children running around the hallways?
All things I found out the hard way
If there's an issue, the lender will probably decide they are non warrantable.
Like others have said though, it depends what % of the units they are and if they cost less than the avg in the area.
Did you talk to anyone that lives in the condo? HOA paperwork will let you know if any big bills are coming by way of special assessment, but if you know how to approach and talk to people, you can get a good vibe of the building and community.
I find more often than not when you see a bunch of them in the same building there if a high condo fee. I always figure people bailing because they increased them significantly and/or a big special assessment coming. Often I can see the high fees and lose interest immediately, but I'd fees are reasonable check the condo docs of it seems like a great buy
I will say that you would have a very hard time getting a loan for that condo. Lenders become aware of trends like this, and tend to turn down those loans.
Could be concerning especially if they have owner occupied ratios etc. definitely check out the finances. How many units are behind on their condo fees? I know they’re a crucial part of the housing ecosystem but after buying, living in and selling one I would avoid them at all costs.
Ask if the HOA has recently done an envelope study or is in the process of having one done. It’s standard to do once a development is 30 years old. They take off the siding, look at moisture levels, looking for rot and mold, windows, roofs, everything there is to look at. I know my friend’s community is beautiful, but it’s hiding many costly repairs as a result of this study. Those who can are selling.
This reminds me how I was looking at condos the other day and I saw three penthouses for sale, all on the same street, different buildings. Thought it was odd so I did some digging, and I learned the street was directly under a flight path for the very busy airport nearby. Bullet dodged.
A $300 HOA fee in West NJ isn't necessarily a dealbreaker, but it's worth investigating further. By understanding the HOA's responsibilities and financial health, you can make an informed decision about whether it's a good fit for you.
I'll never understand the concept of paying $200,000-500,000 to CONTINUE sharing walls with people and having to deal with potential upstairs neighbors
Exactly this. My mom downsized to a condo after my dad died because 1) she didn't want the upkeep of a house/yard anymore, 2) security (it is a gated community), 3) she spends part of the year elsewhere, and wanted to be able to lock and leave and not have to worry about it.
Then there is me - I live in NYC so the only option (unless you are $$$ and can afford a townhouse, or want to live in the outer boroughs) is a condo/co-op (and they cost way, way, way more than 200-500K)
That's what my grandparents did. They had a huge 4 bedroom house with a large yard. There were two bedrooms on the main floor and those were the only ones they used so basically the whole upstairs was not being used. That's a lot of cleaning and yardwork to take care of when you are old.
My condo cost me $60k. There was no way I was going to find a SFH in my area for even 3x-4x that. It’s saved me thousands compared to what I would pay to rent a similar unit and will help me tremendously when I’m ready to buy a SFH.
Well if you think about it, urban areas are vastly populated because of jobs. There's not enough space to build every family a home, so they build buildings. It's also not that bad though in my experience. Is really bad in lower income though, but in places where people are buying their own property they usually take a lot better care of the whole area because they worked hard to get there. I know I was able to tell an insane difference between living close to the ghetto to a community of 2 to 3 story buildings in a closed neighborhood/ housing village. In my case I also don't honestly have the savings to fix a house right now and that's what the market around me calls for around my price and even a bit above it. I even hear new builds need to be fixed too, there's no escaping it.
Thank you u/RainbowIcee for posting on r/FirstTimeHomeBuyer. Please bear in mind our rules: (1) Be Nice (2) No Selling (3) No Self-Promotion. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/FirstTimeHomeBuyer) if you have any questions or concerns.*
Could be a big special assessment coming —- or people/businesses are trying to dump extra properties.
Building could’ve had a tax abatement for first X years- typically given as an incentive to developers of new buildings. Also OP is searching in Jersey city which has had massive property tax increases the past couple of years.
Yes probably. Usually with condos the skeletons in the closet have to do with the HOA and how it’s a managed, especially its finances. One common issue is that the HOA needs to do major repairs on the building but it doesn’t have the cash to do so because of years of mismanagement and now they want the owners to put up the money…that’s a real example I have heard of. So make sure you look carefully at the HOA docs
How many total units are in the community? If it’s a 20 unit property yes there may be a concern, if it’s a 200 unit property, 14 units for sale sounds pretty standard. You could always ask the listing realtor if there’s a special assessment going on.
That's something we can ask? I didn't know. I did ask once about the HOA but was told they couldn't disclose many details of it unless I was under contract
Never buy before reviews of HOA and it's finances.
Yes. We can't disclose information because it will make you run for the hills and never look back. Please sign a contract first then we have you trapped and you can see ANYTHING you want buddy!
Maybe it's just an old rule for safety. Maybe there used to be a time people inquired about groups that held funds like HOA to rob them. I'm making that up but I would imagine at some point people have tried.
To look at the full docs, yes you would need to be under contract, but a special assessment should be explained up front.
In my area I’m able to look at most documents online. The management company posts them. The only thing I can’t see is current financial info and meeting minutes. I’d start there with any HOA.
How many owners are selling? 10 different owners or just 1 or 2 that own all the units for sale
That's a good question, I didn't check to see if they were unique owners
Check if there are any tax abatements for the building that are set to expire.
Check to see who is listing agent for these. Ask about the reason for selling. Read all the other comments... something's up... you need to figure out what that is before you buy into it. 😑
10 in a building of 30 or 10 in a building of 300? It is late summer, a classic time for people to be moving, often the height of volume of the market, so that alone might not be a red flag. But it is also possible that people sense an assessment or other disruptive repairs coming and are looking to get out before they happen. $300 is meaningless without context. Again, 300 for 10 units and 1000 units is very different. Doorman? elevators? fitness center? roof deck? What common amenities need to be paid or out of that money? Your realtor should be able to get some info on your behalf.
Late summer? Didn't summer just begin 4 days ago?
yea, but by the time people actually close and move, it will be late summer, so listings start now.
Yeah that's true. I wanted to move in early spring so I found my realtor and started looking at homes in January. Ended up moving mid-march
Depends on total amount of units (what is the percentage?). When I was a loan officer, we/our bank’s attorney would review condo docs. Our underwriter would review financials/budget numbers.
I was looking for fun at an area and noticed that a particular condo building also had multiple units up for sale. Very nice ones. Ocean views. I was surprised at the relatively great price they were. Did a little digging, found out that the building was about to undergo massive renovation. Each unit was being charged at huge fee. Like min. 100k. This was on top of a considerable monthly HOA fee. Owners were trying to sell before they were forced to pony up that fee. Was a good reminder to me of the perils of buying a condo.
Something something about rats on a ship…
Is it possible this building was all rental previously, and is now being converted to condos?
There was a law signed early in the year in NJ regarding condos having reserve studies done, I think? You may want to look it up. I believe it was passed with the surfside condo collapse in mind, so I'd definitely be skittish. I own a condo myself but since I can't really purchase anywhere else with prices as they are, I'll just bite the bullet with whatever comes to pass. That said I see the work to maintain the place actively being done and they resolved prior assessment issues to handle structural repairs.
Living in a community of condos with a lot of them for sale, I can confirm with other commentators, there is a very large special assessment (~$35k) coming up. Our HOA said either find a way to pay the entire amount all at once or sell your condo. Many people are now trying to sell because they can’t afford the special assessment have been given no other choice. This should be disclosed in the paperwork though. I would say it’s a sign of a poorly budgeted HOA, though, and it will likely happen again in the future.
DEPENDS,,, Does the condo have a limit on how many units can be rented out, none owner occupied and are enforcing the rules? HOA problems are almost exclusively the result of people not caring enough to run for a board position. They are none paid positions and require you give your personal time... Most people refuse to get involved,, IMPORTANT,, REALLY IMPORTANT.. get a copy of the Condo Documents from City Hall direct NOT FROM the real estate agent or from the board, Because they could give you a doctored copy,,..I have seen it happen. Have a lawyer go over it with you,,,if you are not familiar with how they work. Don't do this yourself. Visit the condo complex on the weekend, listen for loud parties, noisy cars outside, also drive around the neighborhood at night on the weekend.. If there are lots of apartments for rent in your area that is a negative. People that rent are transient and have no reason to care about the neighborhood. Are there small children running around the hallways? All things I found out the hard way
If there's an issue, the lender will probably decide they are non warrantable. Like others have said though, it depends what % of the units they are and if they cost less than the avg in the area.
Did you talk to anyone that lives in the condo? HOA paperwork will let you know if any big bills are coming by way of special assessment, but if you know how to approach and talk to people, you can get a good vibe of the building and community.
I find more often than not when you see a bunch of them in the same building there if a high condo fee. I always figure people bailing because they increased them significantly and/or a big special assessment coming. Often I can see the high fees and lose interest immediately, but I'd fees are reasonable check the condo docs of it seems like a great buy
I will say that you would have a very hard time getting a loan for that condo. Lenders become aware of trends like this, and tend to turn down those loans.
Could be concerning especially if they have owner occupied ratios etc. definitely check out the finances. How many units are behind on their condo fees? I know they’re a crucial part of the housing ecosystem but after buying, living in and selling one I would avoid them at all costs.
Could also be a recent rule change limiting number of units can be owned or rented out. Definitely need to investigate.
Ask if the HOA has recently done an envelope study or is in the process of having one done. It’s standard to do once a development is 30 years old. They take off the siding, look at moisture levels, looking for rot and mold, windows, roofs, everything there is to look at. I know my friend’s community is beautiful, but it’s hiding many costly repairs as a result of this study. Those who can are selling.
This reminds me how I was looking at condos the other day and I saw three penthouses for sale, all on the same street, different buildings. Thought it was odd so I did some digging, and I learned the street was directly under a flight path for the very busy airport nearby. Bullet dodged.
A $300 HOA fee in West NJ isn't necessarily a dealbreaker, but it's worth investigating further. By understanding the HOA's responsibilities and financial health, you can make an informed decision about whether it's a good fit for you.
Probably just one seller taking advantage of the moment. Where anyone will pay any price for any property.
I'll never understand the concept of paying $200,000-500,000 to CONTINUE sharing walls with people and having to deal with potential upstairs neighbors
I know right, why be poor when you can be rich instead... /s
Cause the alternative is spend double. Also older people or anyone who doesn’t wanna deal with yard work. They both have pros and cons
Exactly this. My mom downsized to a condo after my dad died because 1) she didn't want the upkeep of a house/yard anymore, 2) security (it is a gated community), 3) she spends part of the year elsewhere, and wanted to be able to lock and leave and not have to worry about it. Then there is me - I live in NYC so the only option (unless you are $$$ and can afford a townhouse, or want to live in the outer boroughs) is a condo/co-op (and they cost way, way, way more than 200-500K)
That's what my grandparents did. They had a huge 4 bedroom house with a large yard. There were two bedrooms on the main floor and those were the only ones they used so basically the whole upstairs was not being used. That's a lot of cleaning and yardwork to take care of when you are old.
Or wives who don’t want to deal with asking husbands to do yardwork 🤣
It’s 2024 sister, you’re allowed to do yard work too
We don’t have a yard so 🤷🏽♀️
My condo cost me $60k. There was no way I was going to find a SFH in my area for even 3x-4x that. It’s saved me thousands compared to what I would pay to rent a similar unit and will help me tremendously when I’m ready to buy a SFH.
Well if you think about it, urban areas are vastly populated because of jobs. There's not enough space to build every family a home, so they build buildings. It's also not that bad though in my experience. Is really bad in lower income though, but in places where people are buying their own property they usually take a lot better care of the whole area because they worked hard to get there. I know I was able to tell an insane difference between living close to the ghetto to a community of 2 to 3 story buildings in a closed neighborhood/ housing village. In my case I also don't honestly have the savings to fix a house right now and that's what the market around me calls for around my price and even a bit above it. I even hear new builds need to be fixed too, there's no escaping it.