When buying a condominium – or any property type for that matter – there are a number of due diligence processes that a buyer needs to complete. This due diligence process ensures a buyer has the full and complete picture of any property or HOA before completing a purchase.
So why does this matter? IT matters because this process protects both the buyer and the seller from unexpected problems, delays, or unexpected financial burdens.
Before a sale, the condition of the property is assessed with an inspection. Plus, the value is inspected with an appraisal, the title is investigated with a title report, and the seller has to disclose all known problems (both past and present) to the buyer via their disclosures. However, none of these reports or disclosures delves into the HOA itself, exposing their finances, their operations, their history, or their compliance under the state condominium laws.
This is why it is essential to order the Condofax report at the earliest possible time in the buying process! It should be done even before the expenditures of money for any of the aforementioned processes happen. As a potential buyer into an HOA, it’s your right to know what goes on within that HOA. Recent events have shown more importance than ever into the inner workings of HOAs, especially when it comes to condominiums.
In a majority of cases, the appraisal, inspection, and title report findings do not result in information that leads a buyer wanting to cancel a transaction. However, since most HOA’s in the United States are mismanaged and in poor financial shape, a majority of the Condofax reports will inform a buyer as to any potential problems they may be inheriting by moving into that specific HOA.
In turn, this knowledge offers the seller with the negotiating power to seek out a price reduction from the seller based on the shortcomings of the HOA. If a buyer is unable to negotiate a price reduction with the seller and decides the problems they’re inheriting are too great to move forward with the purchase, spending money on the appraisal and inspection first is a waste.
With Condofax, buyers have the power to know exactly what they’re buying into when it comes to an HOA.