Purchasing a condominium in Baltimore
Buying a condominium in Baltimore is a lot like buying any other property - but there are a few differences of which you should be aware.
- CONDOMINIUM DOCUMENTATION -
First of all, when purchasing a condominium, you should be aware of the building or community rules and policies on different subjects. These include building and altering your personal residence, leasing, pet policies, fees, the reputation, authority and management style of the condominium board and many other factors.
Each building has a specific set of rules that was established prior to the initial sale of the condominium units. These rules may have been altered over time by the condominium board and you should be aware of all of these rules and specifications prior to buying ( or leasing) a condominium in Baltimore.
Fortunately, Maryland law specifically addresses these concerns. When purchasing a condominium anywhere in Maryland, the Seller must provide the Buyer with a complete set of condominium documents. These documents can be as small as a few dozen pages or as large as a Yellow Pages Directory. The size and complexity will vary by building, but ALL MUST include a current budget, the monthly condominium fees, a compete set of bi-laws, and much more. A copy of the Maryland Association of Realtors Condominium Resale Notification containing ALL requirements can be viewed, downloaded and printed here. A qualified Realtor with experience in condominium sales and leasing can be invaluable when it comes to helping you understand these crucial factors.
Condominium documents must be provided AT LEAST 15 days prior to settlement, and the Buyer has 7 days in which to review the documents and determine if there are any items to which he does not agree. In the event that the Buyer is unsatisfied with any aspect of the condominium documents provided, he (within the 7 day right of rescission period) has the right to cancel the contract and receive a refund of his deposit, with no further obligation.
If the condominium under contract is new construction and is the initial sale (from the developer) the Developer must provide the same information, but the Buyer has 15 days in which to review the documents for unsatisfactory provisions.
- NEW CONSTRUCTION TAX CREDITS -
A few of the properties presented on our site qualify for Baltimore City's New Construction Tax Credit. It is essentially a phase in of the property tax amount over a 6 year period. Qualified individuals will receive a credit for the property taxes in the following increments:
Full documentation on the tax credit can be viewed and downloaded here. Please note .. this tax credit is applicable ONLY if this home is your PRIMARY residence. It will not apply if this is a second home or investment property.
- SHORT SALES AND FORECLOSURES -
Short sales and foreclosures have become a large part of our current real estate market. Although far more prevalent today than most of us had ever expected, there is still a great deal of confusion surrounding these sales. In brief there are three types of DISTRESSED sales in the market today:
SHORT SALES - In this scenario, the Seller of a property owes more on his current mortgage(s) than the property is currently worth. In lieu of foreclosing on the property, the bank - or mortgage holder - agrees to allow the owner to sell the property for LESS than the current mortgage amount. The bank is agreeing to "eat" the shortage. In this case, the contract of sale is between the Buyer and the Owner but the bank needs to approve the sale amount. In theory, this is a simple process - and in some cases it is. However, there can be long delays in response from the bank due to the sheer volume of these transactions the banks are currently dealing with. It is not unheard of to wait months for an answer - although in recent months, the process does seem to be getting a bit more efficient. For the most part, a short sale is like any other transaction including home inspections, and typical Buyer requests of the Seller during negotiations, simply requiring a bank officials approval, and the property may or may not be sold "as is". This will depend on the bank. There are a number of additional documents and conditions that must be understood when writing an offer on a short sale. Make sure your Realtor is aware of these. Great deals have been made on the purchase of short sales, but be prepared to be patient.
FORECLOSURES - In this scenario, the bank has initiated foreclosure proceedings and is exercising its right as the note holder to sell the property in order to collect the money currently owed. Here, the Buyer negotiating with the bank directly, not the owner. The owner may still be in possession of the property, which can be cause for some uncomfortable circumstances, but the owner of the property is not involved in the negotiations. Unlike many states, Maryland does NOT offer a redemption period in which the Owner has the right to pay back the amount owed and retain the property. The owner (or Tenant if rented) may, however, still be in possession of the property and removal of the owners / current residents becomes the RESPONSIBILITY OF THE PURCHASER ! Also VERY IMPORTANT - this sale is strictly "as is". The Buyer is responsible for any defects in the property. You may do an inspection of the property (at your expense) but the SELLER WILL MAKE NO REPAIRS or modifications as part of negotiation. You may be able to make the sale contingent on you being able to obtain financing - but not always. Make sure you ask FIRST!
BANK OWNED PROPERTY - In this scenario, the bank (or mortgage company) has already foreclosed on the property and taken possession. They will offer the property for sale through an auction house or local Real Estate Broker. Although this can be a extended process (the Seller is a bank and this property has been assigned to an already overloaded bank employee), there is no emotion involved on the part of the Seller. Either the numbers work or they don't. Again, this sale is strictly "as is". You can inspect all you want - but do it BEFORE you go into contract. And as with a FORCLOSURE sale, you may be able to include a financing contingency (especially if it is listed with a Broker) but you may not. Many auctions do not allow for ANY contingency. Once the hammer is down, you must settle - or lose your deposit. Again, ASK FIRST!
Selling a condominium in Baltimore
Selling a condominium in Baltimore City requires far more in-depth knowledge than selling a typical home in the area. As you know, condominiums are as much (if not more) about lifestyle as they are about a specific condominium residence.
Knowing real estate law and contracts will only get you so far in this arena. If you choose to use a Real Estate Broker (which I naturally recommend - especially in these economic times), make sure your Broker and or Realtor knows how to sell the condominium lifestyle. This is something we have done since 1989. We were marketing condominiums in Baltimore before the majority of these buildings were even on the drawing board. As Baltimore's only condominium brokerage, we've sold hundreds of millions of dollars worth of these properties over the past twenty years. We have an incredibly broad network of referrals, and professional relationships with Human Resource directors for the area's leading employers .. and we've lived in a number of the condominiums we sell and lease.
Okay, enough of the sales pitch !! The point here is - you are selling not only your condominium residence, you are selling the building, the area, the lifestyle and so much more. Please keep that in mind.
If you are considering a short sale or foreclosure sale, please contact us. We have handled a number of short sales and foreclosures over the past few years. We have also helped clients avoid the necessity for short sales and foreclosures through one of our affiliates who works with the bank on your behalf in order to modify your existing loan in order to avoid such unpleasant situations. We may be able to help.
Leasing a condominium in Baltimore
Leasing a condominium in Baltimore City differs from leasing a townhome or single family home. It also differs from leasing in a management run apartment building.
Here are a few examples:
Condominium living can be wonderful - filled with amenities and services you will never find when leasing a single family or townhome. These may include on-site fitness centers, restaurants, 24 hour front desk staff, security, parking, concierge services, guest suits, etc. These amenities and features will vary by building, so be sure to ask your Realtor what services are offered by each building you are viewing.
There are a few differences of which you should be made aware, so there are no potential problems down the road - AFTER you've signed your lease.
If you are leasing in a privately owned condominium, although in a few cases you may be in contact with a management company regarding your rent, repairs, etc - typically once you have signed the lease prepared by your Realtor, you will be dealing directly with the owner of the individual condo (similar to leasing a single family or townhome.) Your rent payments and all correspondence will be sent to the owner of the unit, not the management company of the condominium, the condominium board, or your Realtor.
You will also need to acknowledge (in writing) that you recognize that the residence you are leasing is part of a condominium regime and you (as a Tenant) agree to abide by all of the rules and regulations imposed by the building's management and board of directors. Typically, the owner may be fined if she (or her Tenant) is in violation of any of the regime's rules. Each condominium regime has varying degrees of rules and regulations. Please be sure to ask your Realtor to clarify any specific concerns you may have - BEFORE moving forward with a lease.
There may also be additional fees associated with the move in and out process when leasing a condominium. Typically, buildings charge either a move in fee, elevator use fee, or both when a new resident (Owner or Tenant) moves in or out. This is not true for ALL buildings, and fees vary by building - so ask. You don't want to be shocked by an extra $250 fee when you schedule your move in.
Also, many condominium buildings have requirements concerning move in and out times - typically 9 am to 5 pm or similar, although again, they will vary by building.
Pet policies - Pet policies vary not only from building to building, but also from owner to owner. Although a condominium regime may allow an eighty pound dog, an individual owner may not. Be sure to ask.
My main point here is to ASK QUESTIONS !! If your Realtor is familiar with luxury condominiums in Baltimore, you should be well equipped with the right information when you are ready to sign a lease.
Leasing a condominium can be far more enjoyable than living in a single family or townhome due to the many additional services, features and location offered by the condo.
Every condo owner is unique - just as every tenant is unique. Enjoy condo life in Baltimore !
Financing your new condominium
Financing has become a very important factor in the choice of a condominium residence. Each set of financing critearia (FHA / FNMA / VA / Portfolio) has a specific set of requirements that a complex must meet before qualifying for certain programs. A few developments qualify for FHA financing allowing Buyers to purchase with as little as 3.5% down payment plus closing costs. Others qualify for FNMA financing and may be financed with as little as 5% - 10% down payment. Others however will require portfolio financing requiring as much as 30% down payment. Often these are are a reflection of the investor ratios in the building as well s other factors. At other times it may be due to preliminary sales of a new construction project.
An experienced condominium specialist will be able to help you from the start, by knowing your financial parameters and those of the building in which you are interested.
For any other condominium specific question or concern, please contact us. |
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