In this fast paced real estate market, there will occasionally be a condominium unit or community that seems to languish on the market. While condition and location are obvious elements that impact value and buyer desirability, there are other factors that owners have little control over that may impact resale value.
- Overly Restrictive Pet Rules – many HOAs permit pets with realistic restrictions on the number of pets per home, size/weight and sometimes breeds. If your HOA bans all pets, or just dogs, that can narrow the window of buyers. Be up front about pet policies when listing your home for sale.
- Parking – a condo with no assigned parking or that is difficult to access, is unsecured or uncovered,may have a more difficult time competing in the market. Your condo may have a better view or higher quality upgrades, but if there’s no parking the value may need to be adjusted to overcome parking objections. Sometimes there are owner spaces available for rent – be sure potential buyers know about that option.
- Unusually High HOA Dues – unlike a house, when buyers apply for a loan to purchase a condo, the lender includes the monthly HODs in the buyer’s loan qualification calculations. The buyer may qualify to purchase the condo, but not qualify for the mortgage plus monthly HOA dues. If the monthly dues are on the high side, and there aren’t amenities or upgrade plans to justify the figure, it may take longer to find the right buyer. Provide detail of all the amenities and services included in the HODs as well as any future capital improvements planned.
- High Non-Owner Occupancy Percentage – buyers, especially those planning to occupy the condo, prefer to invest in a community where there is stability with more owners than renters occupying the homes. And though rental caps are more difficult to enforce, lenders also like to see at least a 50% owner occupancy, or higher, in communities where they’re planning to lend.
- HOA Litigation – just about any condo community built in Washington State since July 1990 has gone through litigation with the developer over defects or warranty issues.That process can take years to resolve, leaving unanswered questions regarding defects, repairs or future special assessments. Buyers are less likely to assume the risk and few lenders will approve a loan in a community until the HOA resolves the litigation.
Its difficult for sellers to control or change some elements that can impact their home’s value. As a seller its important to be educated about what’s happening in your community and how the HOA and Board are handling issues that impact all owners. Before you list your home for sale, know what’s happening in your community. The more you know, the more information you can provide to buyers and real estate brokers, potentially eliminating or resolving perceived negative issues that could impact a sale or market value.