While buying a condo in Chicago is similar to purchasing a home or apartment, there are many distinctive differences that are crucial to understand. Buyers should never sign on the dotted line without first getting the answers they need.
Condo Management
It is critical to know whether or not the condo is managed by an actual manager or self-managed by residents. There are advantages and disadvantages of each style and it is advisable to weigh these prior to purchasing. At the same time, it is recommended to review the insurance policy for the condo association to ensure that it is up to date and that estimates for repairs and rebuilding have been adjusted for inflation if it is an older condo. In particular, buyers need to know what repairs they may be liable for including repairs to common areas, easements, balconies/patios, etc. This can help the buyer determine whether they should purchase additional insurance to protect themselves against potential future repair expenses such as replacing a balcony, repairing a shelter, damaged lighting, etc.
Condo buyers should also understand how decisions are made regarding expenses and use of funds. While most condos allow residents to vote, not all residents have equal voting rights. Indeed, it is common for those who have the largest condos to have a greater say in how funds are spent throughout the year.
Check the Fees
Condo fees add up quickly and it is essential to know what they are before purchasing a unit. Typical fees include maintenance for clubhouses, swimming pools, fitness centers, etc. They can also include fixed heating/air condition, water, and electricity bills. It is also recommended to examine the repair fund. For newer condos, the condo association should dedicate at least 10% of revenue for repairs. For older condos, 25-50% should be budgeted. If the repair fund is not adequately funded, this can create enormous financial hardships for buyers if major repairs are required and it can reduce the value of the property as time moves on.
Check the Legal Records
People should always investigate the legal history of a condo community with the assistance of a real estate lawyer. It is advisable to research whether the association has been sued in the past and whether there is any pending litigation. These records can signal problems that buyers are better off avoiding.
