If you want to sell a condo in today’s real estate market, there are 3 items to check with your condo association before you put your condo up for sale:
Owner occupancy – Most buyers today don’t have a 20% down payment. If you want to open up your condo to the largest buyer pool, then your building will need to have at least a 60% owner occupancy ratio. (There are a few programs that will allow a lower down payment with at least a 50% owner occupancy ratio but these programs are more difficult to find.) Although it is possible for a buyer to get financing with a lower owner occupancy ratio, the buyer will need to have at least a 20% down payment.
Budget – at least 10% of the yearly budget needs to be put into the separate reserve account each year. If your association doesn’t do this, then a buyer will need at least a 20% down payment.
Fidelity Bond – if your association has more than 20 units, the association needs to have a fidelity bond.
It’s difficult as a single owner to affect the number of units that are owner occupied in your building. However, if your association doesn’t put at least 10% of the annual budget into the reserve account or you have more than 20 units but no fidelity bond, bring these to the attention of the trustees so that they can be voted on and changed. While it is possible to sell a condo to a buyer with at least a 20% down payment, the majority of today’s condo buyers are first time buyers with a 5-10% down payment. Don’t let your condo association hurt your chances of a sale – go to your meetings and make sure your association has all of the requirements in place before you put your condo on the market.