investing in texas real estate

Want to buy a condo?

Adapted from “Going condo” by Scott Williams, which appeared in the August 2005 Texas Realtor magazine.

Buying a condo makes sense for many people. Maybe you’re single or newly married and don’t want the responsibility of maintaining a home. Or, perhaps, you’ve done the homeownership thing and now that you’ve retired and the kids have moved away, you want to downsize. No matter how much you know—or think you know—about the real estate market in your area, consider hiring a Texas Realtor who has experience helping clients buy condos.

You’re special
Not every real estate agent specializes in condos. Don’t assume that the agent who helped your friends buy a single-family home is the best person to assist you in your quest for a condominium. The legal requirements and contracts involved in buying a condo differ from those for other types of dwellings.

Find a Texas Realtor who’s done her homework on your area’s market. The agent should have researched condos in your community and should know people at the management companies in your area. It’s important for your agent to be current with condominium association rules and to be familiar with association management fees. Ask prospective agents the difference between condos, townhomes, and patio homes. Many Texas Realtors who specialize in first-time buyers have experience with condos.

Also, before you settle on the place of your dreams, talk to your mortgage lender; some lenders set different rates and fees for condo sales.

Be ready for layers
When buying a condo, you may be dealing with a management company instead of a selling consumer. While it’s usually easy to get an answer from a person selling a house, a company can be entirely different.

You may have to contact two or three people in the management company before you reach the person who can answer your question. Also, any requests for information or repairs during negotiations might pass through several hands—and will certainly take much longer to fulfill than similar requests made of a consumer.

Ask the tough questions
Your Realtor should ask the management company for a copy of its bylaws and for a resale certificate. Again, these requests take longer than many agents realize; a Texas Realtor familiar with purchasing condos will know to write in extra time to the contract.

Joie Laney, a San Antonio Realtor, says your Texas Realtor should submit a Condominium Information Statement to the management company and make sure it’s returned to her in 10 to 12 days. The document requires the management company to disclose lawsuits pending against the association, repairs that need to be made, and how much the association has budgeted to make repairs that year. She also says the Realtor should make sure the contract clearly identifies the buyer’s parking spots and whether those spots are permanent.

“You can buy a condo and find out later, ‘Oh, there’s no assigned parking,’” says Laney.

Make it legal
Laney says buyers and their Texas Realtors need to understand the legal differences between buying a single-family home and a condo. For instance, mortgage companies do not require condo buyers to buy homeowners insurance.

“You may have an upstairs condo and your dishwasher leaks and destroys the guy’s apartment downstairs,” Laney says, “and if you don’t have any coverage he has to sue you.” The management company, which collects fees from condo owners and is responsible for maintenance, isn’t responsible for repairing damage that occurs inside.

Daryl Mauldin, owner of the Daryl Mauldin Company in Houston, says contracts put together by developers of condo communities tend to be longer than the contracts Realtors use. The knock on such contracts is they’re designed to protect the developer rather than the buyer.

“It’s good to have an attorney review the contract for you,” he says.

So, whether you’re a first-time buyer or a real estate veteran, find a Texas Realtor who’s experienced with condominium sales. The time and effort you spend choosing the agent right for your purchase will be well worth it when you locate the perfect condo and enjoy a smooth transaction.