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What a better time to own a condo than now, particularly, with the low interest rates and availability of affordable housing in beautiful Miami Fl. If you are considering buying a condo or condos in Miami Brickell, Coral Gables, Coconut Grove, Kendall, Downtown Miami, SoBe, or in any other Miami Fl neighborhood, the following questions, are what you need to ask  before you do.

Miami Condo Buyers FAQ

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1. What is the most important thing I need to know before buying a condo?
2. What is a condo?
3. What is a Homeowners Association (HOA)?
4. What is an HOA fee?
5. How much is the HOA fee and how is it calculated? 
   
6. Is the condo financially stable?
7. Does the Association or members have the Right of First Refusal?
8. Is there at least 10 percent of the condominium budget set aside for cash reserves?
9. What is the owner's delinquency rate with HOA fees payments after 30 days? 
10. What percentage of the condos is owner-occupied?
11. How do I check which condos for sale in Miami, Florida are Fannie Mae or FHA approved?
12. Is the association pending litigation?
13. Does the condo permit pets?
14. Is the condominium professionally managed?
15. How many parking spaces are provided?
16. Is the boat dock deeded with the condo unit?
17. Will I forfeit my down payment if I don't go through with the sale?
18. How much are the property taxes?
19. How do I know that my purchase price offer is fair and competitive?
20. Can I lease out my condo and have you manage or rent my property?

1) What is the most important thing I need to know before buying a condo?

It's all about location, location, and location! Regardless of market conditions, there are always neighborhoods that tend to ride the real estate value rollercoaster better than others.

2)  What is a condo?
A condo is an individual unit that is privately owned within a multi-unit complex. When you buy a Miami condo, you own the interior space between the walls, floor and ceiling of your unit and share fractional ownership of the common areas with other condominium owners.

A common area is communal space you share with other residents such as hallways, roof, landscape, elevators, stairs, lobby, security and recreational facilities. As an owner, you are a member of the condominium homeowners association (HOA). The HOA members elect a Board of Directors to oversee and manage the common areas, enforce association by-laws and regulations, and maintain the quality and value of the property.

3)  What is a Homeowners Association (HOA)?
A Homeowners Association is a mandatory membership organization of condo owners whose sole purpose is to maintain and improve the real property they own in common

4)  What is an HOA fee?
An HOA fee is a fixed amount that you will pay monthly, quarterly or annually. The amount is determined by the home owners association board to cover the cost of the upkeep of the common areas and amenities.

5)  How much is the HOA fee and how is it calculated?
Condos for sale in Miami vary in HOA fees from the low $200 for a small studio to over $1000 for the larger units in luxury condominium buildings. Typically, your fee is determined by the size, location (floor level, corner unit, views,) and amenities offered.

6)  Is the condo financially stable?
As the saying goes – believe what you see. When buying a condo, the association governing documents will be provided to you. Review the listed documents to evaluate the soundness of the homeowners association personally or with the assistance of a real estate attorney.

• Declaration of Condominium
• Articles of Incorporation - establishes the condo association as a legal entity.
• By Laws-describes the operation, administration and management of the property.
• Rules of the Association - delineates HOA fees sharing for common area expenses and frequency of payment.
• Question and Answer Sheet- provides the buyer answers to questions regarding the rules of the association, voting rights, assessments and information about pending litigation over $100,000.
• HOA Financial Statements- Take a look at the cash reserves. Is there at least 10% of the budget set aside for cash reserves?
• Meeting Minutes- Florida law requires that homeowners association keep copies of their meeting minutes for seven years. Ask to see the past two. The meeting minutes is a valuable source of discovery regarding the condos association stability and other matters!

7)  Does the Association or members have the Right of First Refusal?
A Right of First Refusal gives the Association or the members the right to purchase the property under the same terms and conditions accepted by the seller. The buyer's contract is contingent upon the Association or the members to exercise the Right or not within a defined period of time. Either way, a written confirmation of their decision has to be provided to the buyer.

8)  Is there at least 10 percent of the condominium budget set aside for cash reserves?
A cash reserve is similar to a 401K savings account; whereas, the funds are separate and used solely for the purpose of repairs and replacements. There should be a minimum 10% of the condo association budget set aside for cash reserves for emergency expenses and damage repairs. A large cash reserve increases your odds against the likelihood of a special assessment when a unexpected repair expense arises.

9)  What is the owner's delinquency rate with HOA fees payments after 30 days?
Generally, a good indicator of financial and owner stability is if less than 15% of the condo owners are delinquent with their homeowners association fee payment.

10) What percentage of the condos is owner-occupied?
Generally, the rule-of-thumb is the higher the percentage of owner-occupied units, the more saleable the units will be at resale. However, unless you are buying a condo on a full cash transaction basis, Fannie Mae and FHA have specific owner-occupied requirements for financing a condo loan.

The regulations limit conventional lending when there are few owners that control a substantial amount of the units or more than 50 percent are rented. There is a caveat for pre-construction condominiums for sale or projects still in their initial marketing phase. The number of these pre-sold units can be added to meet the 50% owner-occupied standard.

If you are considering financing the purchase of your condo, check which condominiums for sale in Miami are Fannie Mae and FHA approved.

11) How do I check which condos for sale in Miami, Florida are Fannie Mae or FHA approved?
Simple. Check the current list of Fannie Mae or list of FHA approved Miami condominium buildings.Have there been special assessments in the past 2 years or one forthcoming?

A special assessment is a one-time fee which condo owners pay collectively to pay for an improvement or repair expense. The assessment is relative to the size of the capital improvement project or repair expense. Recent capital improvements on a property are a marketable and great savings benefit to you; however, forthcoming projects or unpaid special assessment can ultimately become your financial responsibility as the new owner.

Ask for frequency of special assessments or review the past meeting minutes to identify type and rate of occurrence; mainly, when considering established Miami condos. Older condominiums gravitate towards frequent upkeep because of tear and wear and may require modernization of equipment or infrastructure repairs.

12) Is the association pending litigation?
A pending litigation signifies that a possibility exists for settlement costs and attorney fee expenses that may incur a special assessment for the owners. It also can enlighten you on the associations operations, policies, and issues with owners, business partners, local governments or community.

13) Does the condo permit pets?
Fido and Lila may not be welcomed in some buildings either because of weight, size, or number or simply because pets are not allowed. If you are an investor or the condo is going to be a vacation home, certain Miami condominiums will only allow the owner to have pets but not the tenant.

14) Is the condominium professionally managed?
You definitely want a larger complex to have a property management company. A residential property management company offers owners the experience and knowledge to manage the day-to day operations and administration of the condominium building.

15) How many parking spaces are provided?
Parking is at a premium due to space limitations particularly for Miami condos in Brickell, Downtown Dadeland- Kendall , Coral Gables, Coconut Grove, Miami Downtown and the Beaches.

Normally, one and two bedroom units come with one parking space while a three bedroom have two. Any additional parking may be available at an added cost ranging from $100 to $150 per month. Also, check if guest parking arrangements are adequate for your visitor needs.

16) Is the boat dock deeded with the condo unit?
Some do, some don't. There are waterfront condominiums that offer boat owners the opportunity to purchase their condo unit with a boat dock. On the other hand, the association controls the boat docks and are leased on a first come- first serve basis.

17) Will I forfeit my down payment if I don't go through with the sale?

The law gives condominium buyers time to review the governing docs. New condo buyers have 15 days right to rescission (cancel) following receipt of governing docs from the developer without deposit forfeit. Resale condo buyers have 3 business days, excluding Saturday, Sundays and holidays from the time of receipt.

18) How much are the property taxes?
Miami-Dade County Tax Collector's Office collects two types of property taxes - real estate property taxes and tangible personal property taxes based on Ad Valorem or assessed value.

Real estate property taxes are approximately 2.5% of the assessed market value and are paid in arrears or a year behind. For example, the taxes due March 31 of the current year are for prior tax year January 1 to December 31. Hence, in March 2010, a property owner paid taxes for year 2009 and in March 2011 for year 2010.

If you plan on renting your condo furnished, a tangible personal property taxes is applicable on the assessed value of the assets (furniture and appliances) that derive income.

Taxes notices are sent November of every year and paid on annual basis by March 31 of the following year. A discount applies for early payment of property taxes as follows

• 4% if paid in November
• 3% if paid in December
• 2% if paid in January
• 1% if paid in February

The Miami Dade County Real Estate Tax Estimator worksheet is a handy tool that provides you with an estimate of real property taxes based upon the information you enter.

19) How do I know that my purchase price offer is fair and competitive?
Once you find a condo you would like to call home, I will develop a full real estate market analysis. I will evaluate real estate market trends that pertain to the number of comparable Miami condos that are for sale and that have been recently sold; in addition, I will compare the number of days the condos have been on the market in relationship to the sale date. The purchase price calculation, which estimates the likely offer to make based on existing real estate market conditions, is determined via two methods: the Value Ratio and Price Per Square Foot formulas.

Mathematical calculations are helpful indicators of supply and demand; however, one must take into consideration that the condition of the home takes precedent over real estate market trends.

20) Can I lease out my condo and have you manage or rent my property?
Typically, owner-occupied units tend to collectively maintain their property and community more so than renters. In order to protect the quality and value of the condominium complex, the homeowner association may restrict rentals (most do allow), limit the numbers of condos for rent at any one given time, and require a minimum and a maximum lease term. Usually, annual leases are the most common; however, short term rentals may be discouraged but available.

Relax and be worry-free! I can rent and manage your property. Fees are subject to monthly rental amount, lease term and number of units to manage.