To understand why real estate agents actually know very little about condominiums, it’s first important to understand what a condominium actually is.
A condominium is a form of ownership – a common interest ownership, more precisely. Condo ownership is one that contrasts with fee simple ownership. Fee simple ownership is an undivided interest, meaning you own it all yourself, which is the case with most single-family homes.
In addition to condominium ownership, there are other types of co-ownership with other people like timeshares (fractional ownership) and co-op (stock ownership). Condominiums, however, are the most common means by which property is jointly owned among multiple individuals.
When it comes to real estate agents, the reality is that these important distinctions are rarely understood by them. It’s hardly their own fault, too. Some fault lies with the fact that their brokers, who are ultimately responsible for the actions of the agent, provide little to no training regarding the specific dynamics of buying and selling condominiums. Thus, they’re blissfully ignorant of the pitfalls and trapdoors that often exist for their clients.
The second reason for why agents know so little about condominium ownership is due to the fact that only 14% of the sales of residential properties within the United States are condominium sales. As such, condominium purchases or sales for the average agent only occur once every few years. This shrinks to an even smaller amount in particularly rural areas of the country, or even areas that are more suburban and dominated by single-family homes.
In his book, Outliers, author Malcolm Gladwell argues that one cannot be an expert in anything until they’ve accumulated ten thousand hours of experience in the subject matter. Given the average agent’s infrequent involvement with condominium properties, it would take a near lifetime to achieve the level of expert to really understand the ins and outs.
On top of it all, the average agent’s naivete is exacerbated by the existence of the state condominium law – an overburdensome and voluminous body of state law that governs condominiums, their associations, and their residents. The depth of these laws and the infrequency of the sales of condominiums means most agents simply aren’t familiar with condominium governorship.
Unfortunately, the cross of these three factors meets at the intersection of confusion, naivete, and misunderstanding, all to the burden of the buyer rather than the agent. They ultimately deprive the buyer of the chance to investigate and truly understand the non-profit corporation that he or she is buying into, and how well that corporation confirms to state law and good practice.
Most buyers’ agents lack the knowledge of what to look for, what to ask about, or what to investigate, which means that then falls upon the buyer, as well. Such a dilemma is precisely what occurred to many of the buyers in the Champlain Towers properties, where a simple yet thorough review would have revealed the depth of problems present. This would not only have given them the opportunity to renegotiate a sale, but would have informed them of potential reasons to back out of a sale, as well.
Regardless of the type of property and type of ownership, knowledge and expertise simply provide the buyer, seller, and association with the information needed to make a safe, sound, and reliable purchase.