Some prospective buyers feel that a condo inspection is unnecessary since their homeowners association (HOA) will cover many issues. Unfortunately, this is a common misconception that can leaves new owners on the hook for additional costs.
An inspector can help identify issues before you make a commitment. When choosing a condo inspection, though, you’ll need to decide between an interior only or full assessment. A full inspection may sound superior, but it’s not necessary or advised in all situations. You’ll be able to make a better decision on this matter after reviewing the following information.
Do I Need a Condo Inspection?
The great part about buying a condo is that it usually requires less maintenance, and when it actually is necessary, the cost responsibility is usually divided up among individual owners. The HOA has the responsibility of handling maintenance outside of your unit’s walls. Of course, these costs still get handed off to owners via special assessments.
Additionally, there are many potential problems that can occur within the walls of your unit. The responsibility of your flooring, internal systems, ceiling and even shared walls rests squarely on your shoulders. Some units also have individual HVAC units and even their own attics, so condo inspections can be very similar to those performed on single-family households.
This makes the question of whether you need a condo inspection or not a no-brainer. While these units may seem more affordable than a traditional housing unit, they can become money pits if you don’t know what you’re jumping into.
Keep in mind that you should ensure your inspector is trained to assess condos. Only 8 percent of mortgages from the last few years have been for condos, so the chance exists that some inspectors may have no experience in this area.
Interior Only vs Full Condo Inspections
Finding an experienced professional is an integral part to purchasing a condo, but you’ll need to decide whether to get a full or interior only condo inspection. The latter option will focus solely on your unit. Even though it’s less comprehensive than a full inspection, it will discover most of the issues you’ll have to deal with on your own. With a well-run HOA, this may assuage any concerns.
A full condo inspection, on the other hand, will include crawl spaces and attics that attach directly to your unit. The inspector will also assess basements, garages, common-use zones and the roof if possible. Although these common areas may not always directly affect your property, you can still end up paying for them through special assessments.
When it comes to condo inspections, a full assessment is typically in your best interest. You can use this information along with HOA documentation to make a more informed decision about a property’s value and health. Interior only inspections should be reserved for high-rise condominiums. This type of real estate has too many inaccessible areas for an inspector to contribute much.
What do Condo Inspectors Look For?
There are a variety of issues that an assessor will look for during a condo inspection. These will vary dependent on the type of assessment you choose, and the work necessary can differ based on the type of condominium being examined. Understanding what condo inspectors look for may allow you to spot any potential issues when you’re first viewing a property.
In some instances, this can save you the cost of an inspection entirely. If it’s obvious that a property is uncared for, making an investment may prove costly. Here is what you can expect from most condo inspections:
Interior Only Inspections
- Cracked walls in unit.
- Warped walls, sloping floors and other signs of water damage.
- Properly functioning smoke alarms.
- Unpleasant smells in the unit which can signify bigger issues.
- Checking for adequate water pressure.
- Furnace, water heater and other appliance issues.
- Potential problems with the ceiling and floor.
- Caulking gaps in the kitchen and bathroom.
- Door and window inspection that can identify larger problems.
- Ensure that all electrical systems are properly functioning.
- Attic inspection (if unit has dedicated attic).
- Mold inspection (evidenced by spotting on windows or walls).
Only about half of condo owners have individual insurance for their unit. It’s ideal to invest in a policy in case any of these interior issues arise in the future.
- Includes assessment of all interior only issues listed above.
- Check shared walls for damage.
- Inspect HVAC systems (interior and exterior if both exist).
- Do a visual inspection of roof (gain roof access if possible).
- Check siding for wear or damage.
- Look for water infiltration and other water damage.
- Spot poor maintenance and repairs from previous issues.
- Damage/disrepair to handrails/staircases.
- Wear and tear on parking lots and walkways.
- Damage to patios or shared decks.
- Damaged flooring in common hallways and lobby.
- Radon testing (particularly important for high-rise condos).
This is just a basic outline of what you can likely expect from your condo inspection. Differing state laws could mean an assessor needs to inspect even more. If you’re seeking an FHA loan for a condominium, the Department of Housing and Urban Development (HUD) has its own set of rules.
While this condo inspection checklist isn’t exhaustive, it provides a good starting point for understanding the process.
Before Getting a Condo Inspection
When you’re purchasing a single-family home, the seller or real estate agent often cover the cost of an assessment. When it comes to condo inspections, though, the buyer is often left with the bill. This means a bit of research before investing in an inspector can save you money.
If you identify issues prior to seeking a condo inspection, it may be a red flag that needs further investigation. Following these tips can help you avoid a bad investment in a subpar community.
Ask if Technical Audit Exists
Condominiums that want FHA loans to be accepted must meet vigorous criteria. One requirement is a full inspection throughout the entirety of the building. This audit will help identify any problems that could result in additional repair costs in the near future. If this technical audit has been performed, ask for a copy.
Do not get discouraged if the condominium cannot accept FHA loans. This doesn’t necessarily mean the community is substandard. As mentioned, HUD criteria is very stringent. By reviewing these documents, though, you can identify potential issues even before seeking out a condo inspection. You should also have your inspector review any recent status certificates.
If you previously wanted a condo in a certain community but it didn’t qualify for FHA loans, it may also be worth it to contact the HOA again. The government recently loosened regulations, and it's expected that up to 60,000 more condo units will qualify for funding.
Review Condo Documents
When condominium meetings take place, minutes are recorded for posterity’s sake. Request the past year of these minutes and review every meeting. Exterior problems and maintenance issues are discussed during these gatherings, so you’ll be able to identify any major issues that arose prior to your arrival.
When you encounter discussions over community problems in the minutes, ask for proof that they’ve been handled. You should also look for the fees that were incurred during the repair. Finally, check common areas for signs of poor maintenance. This may mean the HOA is running low on funds.
In the same vein, ask if there is any pending or ongoing litigation. This could be a sign of future liabilities and even problems with former owners.
Consider All HOA Funding Issues
A homeowners association typically only has assets in the form of dues collected from condo owners. It’s this money that goes towards proper maintenance and repair of issues outside of your unit’s walls. Low monthly dues may seem like an awesome benefit, but when combined with other financial aspects, they can be a red flag.
If the HOA has a low amount of money saved in reserves, low monthly dues can be a big issue. How will they pay for major repairs? You’ll also want to check into deferred maintenance. If all these issues exist, you may be investing in a liability. Your condo inspection professional will know for sure, but you should always watch out for these warning signs.
Ask for a recent reserve study. This will show a recommended reserve that your community should have. If they have at least 70 percent of these funds, the HOA is typically in good shape.
Contact a Condo Inspection Expert Today
Purchasing a condo without an inspection opens you to a variety of liabilities. By reviewing the appropriate documents and choosing a professional skilled in these assessments, though, you can ensure that your real estate investment is an informed one.
For more information on condo inspections and how they affect your purchase, find a WIN Home Inspection expert near you by clicking here. We can also be reached at firstname.lastname@example.org or by calling one of our inspection professionals directly at (800) 309-6753