Condo and Loft Homebuyer's Guide

Find out if these urban abodes are right for you to buy, live in.

If you're looking for amenities, attractive prices and a low-maintenance lifestyle in the city, a condo or loft may be right for you, Phoenix Condo's & Lofts

A condo is generally an individual unit in a larger building or structure that was built as housing. A typical condo complex may look like an apartment building, but each unit is (owned), not rented. A homeowners association (HOA) governs the condo community, collects dues and maintains the common areas.

A loft is a living space carved out of a building that wasn't built as a living unit. Many lofts are built out of converted warehouses or old factory buildings in a city's urban center, making them an appealing alternative for professionals who work downtown. Lofts typically do not have interior walls, have more open space and higher ceilings than other homes, and require minimal maintenance. Loft developers will sell them as move-in-ready units or as empty "shells" for buyers interested in designing the space themselves. An HOA also governs the loft building.

"There's an interesting phenomenon happening today in Phoenix urban centers. People are moving back into the cities. "They're realizing it's much more cost-effective to live and work in the city center."

If you're considering buying a condo or loft, follow these six steps to guide you through the process.

•Step 1: Weigh the Pros and Cons
The condo lifestyle can be an attractive choice for a variety of buyers, such as families who like to be near parks and schools or the empty-Nester looking to downsize. Advantages of living in a condo or loft building include:

•Sense of safety;
•Minimal exterior maintenance;
•Convenience;
•Sense of community;
•Resort like amenities, such as concierge service, pools, fitness facilities, tennis courts, roof deck with views and valet service.
But expect to sacrifice some freedom.

"It can be a bigger process to get approval for renovations, and sometimes personal hobbies and entertaining may be curtailed, depending on building rules.

•Step 2: Find a Real Estate Agent Who Knows the Market (Linda Wieczorek 602-391-8246)
A knowledgeable real estate agent can help in your property search and is especially key if you're a first-time buyer. Most people who are buying condos are entry-level buyers. It's important for these buyers to find someone who has a lot of experience with condos and lofts and who can explain the process well. Transactions usually go sour when the buyer isn't aware of how the process works.

•Step 3: Know What to Look For
•How many units are owner-occupied?
"If a large percentage are owned by investors as second homes or rented out, it can have a negative effect on the value of your property.

•How is the building maintained?
"When you buy a condo, you own the common areas," she says. "Badly maintained common areas can be a red flag that perhaps the homeowners association is not running the building as well as it should."

•Is there an application process?
Sawyer says in Manhattan this step is becoming more common because it protects the owners by making sure others are financially qualified to live in the building.

•Who is the developer/builder?
Check reputations and other developments. "Remember, you are in essence buying a building.

•Step 4: Get to Know the HOA
Before you buy a condo or loft and join the HOA:

•Find out what the monthly dues are and if an automatic debit system is available;
•Ask for a copy of the HOA's covenants, conditions and restrictions (CC&Rs) as these rules can limit improvements or alterations you can make to how many pets you can have;
•Ask for a copy of the HOA by laws, which dictate in fine detail how the association should operate;
•Ask about any special assessments that were made in the past three years;
•Meet the HOA president and ask any questions you may have about the community;
•Find out when and where meetings are held;
•Ask for a copy of the latest budget and meeting minutes. Review them to see how dues are being spent.

•Step 5: Consider Insurance
With a single-family property, a homeowner must insure the building, its contents and even the land and landscaping. With condos and lofts, the HOA collects monthly dues from members that cover the cost of insuring the building.

Even though the building is insured, condo and loft owners should buy policies to cover their belongings inside the building."It's highly recommended that buyers also purchase a separate homeowner policy to insure the contents of the home, similar to renter's insurance," says Leslie Williamson, executive vice president of The Condo Store, a nationwide real estate service specializing in sales of condos and lofts.

•Step 6: Do the Research
Before you sign on the dotted line, make sure you find out the nitty-gritty on the community you're considering. Dig into the HOA's books, ask neighbors about their experiences and talk to the real estate agent on-site to see if it's a good fit for you.

Don't forget to research the community's management system. Is it managed by a small, local firm? Or is it a large company that manages several properties in the city or region? What is the grievance procedure? Who is the on-site manager and how well does he or she respond to day-to-day issues?

What You Need to Know About HOAs Get the lowdown on how a community is managed before you buy

Talk to anyone who owns a condo or a home in a planned unit development, and they'll warn you about the homeowners association (HOA). You shouldn't be scared, but realize it does wield a lot of power in the community it governs. So before you buy a home in a particular neighborhood, research the HOA.

When a developer builds a condo building or townhome complex, it creates a legal entity known as the HOA, which allows the developer to transfer ownership and management of the community to the homeowners after it has sold a predetermined number of units or lots.

Do the Research

The HOA manages the common areas and amenities, and it enforces what are called covenants, conditions and restrictions (CC&Rs), which all homeowners in the development must follow. Review each of these documents before buying:

•CC&Rs. These rules can limit anything from what kind of improvements or alterations you can make to how many pets you can have;
•Homeowners association bylaws. These dictate in fine detail how the association should operate;
•HOA budget and financial statements. The budget should cover day-to-day operating expenses, such as maintenance costs, staff salaries and utilities. At least 3 percent to 5 percent of its gross operating budget should go into a reserve for occasional repairs, such as paint jobs or new roofs. If the budget is unrealistically low, you're at risk for increased dues or special assessments. Study operating budgets and financial statements for the past several years to look for signs of poor monetary management;
•HOA meeting minutes. Get up to speed on what the HOA is working on.

See What You Get

When you buy a unit or lot in the development, you become a member of the HOA and must pay monthly dues. A portion goes toward upkeep of common areas, and the rest goes into a reserve for potential repairs. Dues typically range from $150 a month to $600 a month, depending on the amenities you get.

Access to amenities makes up one of the most appealing reasons for buying an HOA-governed home. You'll get luxuries you wouldn't be able to afford on your own, such as swimming pools, tennis courts and fitness centers. Potential savings in home-related expenses holds another advantage over single-family homes. Condos, for instance, are usually cheaper to maintain as homeowners share the cost of upkeep and repairs. Since the HOA handles maintenance, not having to clean the pool or fix broken exercise equipment becomes another perk.

Know Your Restrictions

You've probably already heard the biggest complaint about HOAs: the CC&Rs. These rules are meant for the good of the community, but for some, they may seem too restrictive. CC&Rs and bylaws are extremely difficult to get around, so be sure to review these documents carefully before you buy a home. Be prepared for special assessments, especially in older buildings. If the roof needs to be replaced, the HOA will collect money from each homeowner to cover the cost.

10 Steps to Happy House Hunting - STEP 2

Step 2: Choose a type of house

The type of house you choose (single-family detached, condo, townhouse, duplex, co-op, etc.) depends on how much "common interest" you want to share with your neighbors. For example, condo residents share walls and common public areas such as a roof deck or courtyard. Residents don't have to maintain these areas, because a management company and the homeowners association (HOA) take care of them through monthly fees collected from residents. $$$$

Each type of building and ownership comes with its own pros and cons, so choose one that fits your lifestyle.
Decide which home features are most important to you. Ask yourself these questions:
Do you have pets? You may want to narrow the field to homes with big enough backyards.
Is your family growing? Make sure there are enough bedrooms for today and five years from now.
Be shrewd about storage space. Houses with cavernous rooms may be impressive to look at, but they sometimes compromise storage space to achieve that effect. Would you rather have a place to hang your crystal chandelier or a place to hang your coats?
Will any remodeling be required to make the home move-in ready for you? If so, are you handy with a hammer or would you prefer to find a home that needs little work?
Find out what you need to know about HOAs.
Get tips on buying a condo or loft.
Another type of home is "manufactured," meaning it's constructed in sections in a factory and then shipped and assembled on the home's site. Also referred to as prefabricated or modular homes, they can range from your typical low-end mobile home to an ultra luxury prefab home to even a green home.

10 Steps to Happy House Hunting - STEP 1

STEP 1.
Location, location, location. You've heard this time and time again, and it's never been truer than in real estate. The most important aspect of a home's value is the neighborhood it's in. What good is a beautiful, 2,500-square-foot restored Victorian if it's in a declining part of town?


As you look at neighborhoods, ask yourself these questions:
What's your job commute going to be like? Is the traffic heavy or light when you'll be on the road?
How's the school district? Even if you don't have kids, the quality of the school district affects your home's value, so it pays to find out.
How much crime is there?
How accessible are shopping centers, libraries, churches and other necessary destinations?
Do you prefer urban living or country living?
If you're priced outside of the neighborhood you want to be in, look for the area's fixer-uppers. These houses will need work, but at least you'll have built-in property value. You can also find bargains if you're willing to go outside popular neighborhoods and scout up-and-coming ones.

$8,000 to first-time home buyers CREDIT

For information on the $8,000 TAX CREDIT call Linda 602-391-8246

As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed legislation that grants a tax credit of up to $8,000 to first-time home buyers.

Here is more information about how the 2009 First-Time Home Buyer Tax Credit can help prospective home buyers become part of the American dream.

Breaking news: Tax Credit Can Be Used on Closing Costs.

Who Qualifies?
First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009.

To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

Which Properties Are Eligible?
The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

How Much Will the Credit Be?
The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:

The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000.

The buyer's income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.

If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit.


The credit decreases for buyers who earn between $75,000 and $95,000 for single buyers and between $150,000 and $170,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $95,000 for singles and over $170,000 for couples are not eligible for the credit.

Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during the three-year period, the credit will be recouped on the sale.