Here are a few things you’ll need to know when evalutating a potential condo purchase. Once you begin the sale process, you will find a more comprehensive list of regulations and building history in the building’s by-laws and association meeting notes.

1. When was the building built and/or renovated? You can expect different maintenance issues based on the age of the structure.

2. Has there been (or will there be) work done to the building? It’s important to know about recent improvements and/or upcoming projects.

3. What percentage of the building can be rented? If you think you may use the property as a future rental, it’s best to know the condo rules.

4. Does the association allow pets? If so, is there a quantity or weight limit?

5. Is the building managed by the unit owners or by a management company? Self-management can be cheaper, but responsibility can weigh more heavily on unit owners.

© Copyright 2008 PERL Mortgage, Inc.

Appraisals can come in lower than the sales price because appraisals are based on recently recorded sales and not the most current up-to-date market value. Following are a few other factors that can challenge appraisers when assessing your property.

Unique Homes
When your home is an original design or has very tailored features, it’s often difficult for appraisers to find comparable properties in the neighborhood. Appraisers use these “comps” to give an estimated value of your home. If your apple is surrounded by oranges, you may have to work with your realtor to compile your own list of comparable homes. You may need to include homes from other neighborhoods in order to show a more accurate value.

Public Record
In a perfect world, homes would sell and quickly become public record. In a busy season, it can take up to three months for home sales to be recorded. Prior to recording, appraisers can’t use these sales as part of an assessment. This may lead to a lower-than-expected assessment of the property you are buying or selling.

Upgrades
Although adding features to your home improves its value, the return made through the sale varies. For instance, replacing windows returns 55%, while adding a bathroom gives back as much as 96%. The best investment by far is paint – just by sprucing up your walls, you can expect a 200% return on your labor and supplies.

Overestimation of value
The last few years have been great for the housing market. Interest rates are low and prices have soared. However, the market is slowing down and sellers can’t expect the same rate of appreciation. It’s best to work closely with your realtor to decide on the ideal sales price.

© 2006 PERL Mortgage Inc.