Condo Shopping: Does My Agent Warn Me About HOA Red Flags?

Many of today’s buyers want condos. They’re compact and low-maintenance. Condos are cheaper, typically, than standalone homes. Still, it’s entirely possible to make a costly mistake by missing condo warning signs.

Sometimes, a real estate agent notices things the buyer won’t. A good agent becomes that extra pair of eyes, extra ears and nose…

Alert real estate agents save buyers money in the long run. Know what they look for. You’ll be better prepared to protect your best interests — long after the deed is yours.

Things a Real Estate Agent Notices

The buyer’s agent notices pricing. Granted, there’s so much online data that the typical buyer can tell if a condo property is more expensive than comparable properties. Ditto for the condo that’s spent an abnormal length of time on the market. Or perhaps the condo is back up for sale after another buyer backed out. A real estate agent can discuss these things with buyers, and help determine what they actually mean.

An agent will notice if either the grounds or the unit itself aren’t well kept, but buyers usually notice that, too.

So let’s go over a few things buyers can miss, but a pro should find.

Looking inside the unit, your agent may point out things like…

Staging or photography that doesn’t check out. Real estate agents can spot a cover-up! If sellers have oddly placed carpets, furnishings, or wall hangings, count on a buyer’s agent to check the surface underneath.

Quick updates for quick sales. How about that spiffy wood laminate flooring throughout the place? Yes, and that new, perfectly uniform coat of paint. The seller’s agent spruced it up nicely, but the systems and appliances are from the 1980s. The buyer’s agent knows — and tells. Because buyers should know if they’ll have to pay for major upgrades.

Repairs and maintenance in the unit done by unlicensed DIY buffs. Interior decorating is one thing. But what if someone has worked on plumbing, outlets, or — heaven forbid — any weight-bearing walls?

The agent can ask the home inspection expert to comment on many of the above points. That’ll give the buyer critical information to decide: Is this condo a reasonable, safe investment?

When looking around the building’s exterior, your agent may point out…

Engineering issues. These can include infrastructure breakdown, due to construction flaws or the building’s age. Concerns? An agent should help the client make a contingent offer, based on an engineer’s inspection and report.

Costly outdoor work to be done. Is there a potential for outdoor maintenance, or any issues with trees, sewers, etc. to fall on individual unit owners? The agent (or buyer) is wise to seek out the on-site maintenance chief, and learn what unexpected costs have actually fallen upon individual unit owners in recent times.

Sloping. A unit might be farther down the ground’s natural slopes than others. If stormwater rushes into that cozy little space (without a decent drainage system to redirect it), there could be troublesome water table and even flood issues. Aware of the growing potential for flooding, an agent might recommend picking a different unit for this reason.

Of course, most agents have only basic knowledge in these areas. If necessary, an agent should show the client where to find good experts.

There’s more about flood risk which your agent might not know. Read: Safe or Sorry? The Evolving Law of Disclosing Flood Risk (and How to Look Up Your Own Home’s Risk of Flooding)

When perusing the property’s documents, your agent may point out…

Errors in the listing. If the listing doesn’t match the legal description and the property itself, the agent should notice. A well-prepared agent comes in with measuring tape. All the better to check the unit’s actual dimensions against the seller’s writeup.

Unexpected costs. What are the monthly HOA fees? What about special assessments? While we’re at it, condo boards should make sure the property as a whole is sufficiently insured, averting surprise expenses for individual unit owners. An agent can guide a buyer to check on this. (Condo unit owners’ insurance only covers what’s within the unit’s walls.)

Dealbreaker rules. Condo unit buyers are entering into agreements with homeowners’ associations (HOAs) that manage the properties. A buyer should check for deed restrictions. Review the Covenants, Conditions, and Restrictions (CC&Rs) before buying. Otherwise, there can be conflict, fines, and even liens (for unpaid fees) in the buyer’s future. Who needs to buy into that?

An agent will tell you the pros you want to hear, and the cons you don’t. For example, a property with low monthly HOA fees looks appealing upfront, but the association must support the property’s needs. The association shouldn’t skimp on maintenance just to keep unit owners from complaining.

How can you detect such skimping? Ask the property office for a copy of the budget and master insurance policy. Your agent or mortgage consultant can help you check for an appropriate stash of reserve funds. Otherwise, look out for “special assessments” in the future. Most buyers would agree that paying several hundred dollars a month to the association makes sense, to avert large but preventable expenses later.

Why Your Agent Will Inform You

Hiring an agent means having someone who represents your best interest when you buy the unit — someone who has fiduciary duties.

This raises the question of how agents differ from transaction brokers. Briefly: A broker typically prepares the paperwork, relays offers, and keeps everything moving. An agent does all that, while focusing on one specific client they’re representing to the best of their professional ability.

Check out some facts about your real estate agent’s fiduciary duties, on Deeds.com.

Your agent, as opposed to a broker, is working for you. An agent may not rush to close a deal without filling you in on things you’d want to know about your investment. That’s why your real estate agent clues you in if they detect signs of past flooding or current moisture issues, for example, or sinkholes in the parking area.

So, be sure your broker is also your agent. Check your contract.

Takeaway: Experienced Agents Help Clients Avert Mistakes

Condos are hot today, given their relative affordability. Unit buyers can enjoy living in a low-maintenance setting, building equity along the way. Yet condos can come with their own costly issues—especially if the property isn’t run right.

Possibly the best way to avert unnecessary surprises is to hire an agent who (a) has experience; (b) understands condos; and (c) won’t hesitate to look under those rugs.

Note: This article is for general information only. It is not legal or financial advice. Buyers who hire real estate agents must speak directly with the agents about their professional abilities, duties, services, and generally what to expect from a specific agent-client relationship.

Supporting References

BuzzFeed via Yahoo.com: Real Estate Agents Are Revealing the Subtle Red Flags to Look Out for When Buying a House (Jan. 24, 2024).

Association Reserves^TM: Reserve Study Services.

American Financing, via AmericanFinancing.net: Home Purchase – Red Flags When Buying a Condo.

Deeds.com: What Does a Condo Deed Give You? Can You Be Forced to Sell? (Mar. 27, 2023).

Deeds.com: Condos and Special Assessments (Jun. 24, 2022).

And as linked.