June 15, 2023

Condo Questionnaire

What is the Condo Questionnaire?

If you are buying a condo with a mortgage, you will likely be paying for a condo questionnaire as part of your closing costs. Your lender will need to send a questionnaire to the management company, or condo board, with specific questions that will disclose the stability of the association. The questionnaire contains questions that will validate if the condo is "warrantable". Being "warrantable" means that the loan is able to be sold on the secondary market.

Some of the questions will relate to some items such as; major repairs in the complex, outstanding code or ordinance violations, sufficient funds in place for reserves, any current special assessments, any current litigation, how many units are being rented out, non-occupant owners versus owner occupied units, is there new construction still not completed, are there too many owners delinquent with their association dues.

What can happen?

Sometimes the results of the questionnaire come back very late in the transaction. It may not always be ordered early in the transaction, or it may take weeks to get returned from the association or the management company. By this time, a buyer has likely paid for a home inspection and an appraisal. The answered questions could result in the transaction being cancelled if it is determined that a condo is "non-warrantable", and the buyer has no other option to purchase it. If the lender does not offer "non-warrantable" loans, the buyer may have to find another lender that does offer them. Is the seller going to wait for the loan process to start all over? Another risk is that the buyer may not even be able to qualify for a "non-warrantable" loan. These loans sometime require a higher down payment or a higher interest rate because they can be a riskier loan. Another option would be a portfolio type loan to keep the loan in house (if the lender offers that). Purchasing the condo with cash could also be another solution.

Cost

This questionnaire is an added cost to your buyer closing costs. The price can vary because it is set by the association or the management company for that condo complex. The cost could run a few hundred dollars. The lender may ask for the payment up front, or pay for the questionnaire and charge you the fee at closing (a risk for them if your loan doesn't close).

Can a "non-warrantable" condo be anticipated?

This is not always easily detectible. If you see the recent sales in a complex have all been cash, that might be a sign that a mortgage might not be so easy for this complex. Something may have just happened in the complex to cause it to be "non-warrantable" as well. A seller may not even be aware that their complex is a "non-warrantable" complex. If you ask the association or management company if the complex is warrantable, most won't be able to give you a good answer. It all depends on all of the answers on the questionnaire.

My only suggestion is to have the condo questionnaire ordered as soon as possible and have a back up plan.

 

 

 

Jan. 20, 2023

What! I have Radon?

Radon is everywhere. It's outside in the air that we breathe, so it is definitely inside our homes, workplaces and schools.  Any type of building can have Radon in it. More people are spending more time at home since the pandemic and, workplaces are still allowing their employees to work from home. Testing is simple and there is a remediation solution if you have High Levels of Radon. Where are you spending a lot of your indoor time?

 

 

What is Radon?

Radon is a tasteless, odorless gas that comes from the ground. Everyone has it, it's just that when the levels are higher than the guideline levels, it can become a problem. Every type of soil or rock has at least some traces or Radon. There are also no short-term side effects of Radon, so you won't have any immediate symptoms to watch for if you are exposed to High Levels of Radon.

Why are High Levels of Radon Bad?

Exposure to High Levels of Radon can contribute to Lung Cancer. It is the 2nd leading cause of Lung Cancer after Cigarette Smoking.  

What is a High Level of Radon?

According to the United States Environmental Protection Agency, a level of 4 picocuries per liter of Radon is the guideline that was selected to be a reasonable level. Levels over this guideline are considered to be High Levels of Radon, and it is recommended to have Radon Mitigation done. Some experts might suggest that even that number is too high, but it has been determined to be a good guideline. The goal is to get the Radon Level as low as possible with the Mitigation.

How does Radon get into my Home?

It can enter through cracks in the floor or walls where the foundation touches the soil. It can also enter through your sump pump opening, crawl spaces, spaces around plumbing fixtures, electrical wires or hollow block walls.

How do I know if I have Radon in my Home or Workplace?

The only way to know is to test for Radon. 

How do I get the Testing Done?

You can get do it yourself tests at a reasonable cost from your local Health Department, a local Hardware Stores, on the internet, or you can pay to have an inspector monitor your home. If you are testing for a home inspection for a purchase or sale (approximately $150-$200), use someone who is certified by the National Radon Proficiency Program of the National Radon Safety Board. Most tests will have to be in the home for 48 hours and then be analyzed.  

How often should I test for Radon?

you should test every 2-5 years because the level of Radon can change as the ground naturally shifts and your home settles. If you home has a mitigation system, there should be a way to monitor to make sure that the system is functioning. Every once in awhile you should check and make sure the fan is still working.

What do I do if I have High Levels of Radon in my Home?

If you did your testing correctly, and your Radon Levels are High, you will want to have your home remediated. There are many options of where and how to install a Mitigation System. Here is an example of what a mitigation system looks like.  You can also try to run the system from the ground in a different location if you don't have a sump pump. You can also try to camouflage the fan by adding it in the attic space if desired. This was the most effective way for this home. You can also paint the outside piping the color of your exterior, so that it blends in a little more with the exterior of the home. The exhaust pipe should extend past the roof line. This will help to keep the gas from getting back into the home through open doors and windows.

 

                      .        

Here are some common myths about Radon in your Home:

1. High Levels of Radon aren't found in newer homes. (Radon can be found in any age home)

2. I should be ok. My Home is older and drafty. (Radon can be found in any age home)

3. I should be ok. I don't have a basement. (Radon can be found in any type of foundation)

4. My Neighbor next door doesn't have High Levels of Radon. I should be ok. (Radon can still be found in your home)

5. There is a lot of clay in my area. I should be ok. (Radon can be found in any type of soil)

6. I tested for Radon and the test was good. (You should retest every 2-5 years)

7. I have a mitigation system, I'm good. (You just need to monitor the system to make sure it's still working)

Governor Whitmer has declared January in Michigan as Radon Action Month.  In her release on January 5, 2023, it states that 1 in every 4 homes is expected to have Radon Levels exceeding the federal action level of 4 picocuries per liter. It also states that elevated Radon Levels have been found in all 83 Counties in the State of Michigan. Some sources automatically install a mitigation system even if their levels are lower to be proactive.

Source Used: EGLE Michigan Department Environment, Great Lakes and Energy

Michigan.gov/Radon or call EGLE's (Michigan Department of Environment, Great Lakes and Energy) Indoor Radon Hotline at 800-723-6642.

 

 

 

 

Jan. 18, 2023

What are Common Areas in a Condo Complex?

You may hear the term "Common Areas" when you are looking to purchase a condominium.  Do you really know what they are?  Not all the complexes have the same common areas.

The Common Areas are jointly owned by the Homeowners in the Condo Complex.  Some items for example may include:

1.  The building of the condo (the physical structure)

2.  The lot that the building sits on

3.  Clubhouse

4.  Swimming Pool, Tennis Court, Play Structure

5.  Mailboxes

6.  Sprinkler Systems

7.  Carports/Parking Lots or Spaces/Parking Structure

8.  Grassy Areas

9.  Fitness Center

10. Meeting Rooms

11. Elevator

12. Exterior Signage, Landscaping, Park Benches

13. Heating and Cooling and Hot Water 

14. Storage Areas

15. Laundry Facility

The By Laws for the Complex should state the Common Areas and what the Association and the Owner is responsible for.  If you are ever unsure, call the Association directly and get it in writing.

The Common Areas are maintained by the Association mainly from the Association Dues that are collected from each Owner. The could also come from additional Assessments to the Owners for a specific purpose (replacing the roof, updating plumbing, pavement updates).  Know the restrictions and usage of the Common Areas in your complex.  This could be another reason the Association Dues are either higher or lower than other Condo Complexes because of amenities in the Condo Complex.  Be aware of current Assessments that could be attached to a Condo Unit when purchasing.  You'll want to make sure that those assessments get paid off from the current Owner or they will transfer to you as the new Owner.

 

 

Posted in Condo Living
June 23, 2022

Parking at Condo Complexes

You have been searching for the perfect condo, but have you considered your parking options in the complex?  While you are looking at a unit to purchase, you are probably only considering parking for your own vehicle.  You might find some complexes with garages or carports, but some only have parking spots out in front of the unit.  Sometimes they will be marked with the unit number, and sometimes it's just understood.  When you are looking to buy a condo, you will want to know how many parking spots are assigned to your unit, and where they are at.  What happens if someone is parking in your assigned spot?  What if you need a handicapped spot?  Things to consider when out shopping.

Do you ever want to have guests over?  You will also want to know where the guest or visitor parking is at.  Does your guest have to park behind your car that's in the garage?  Does your guest have to walk some distance from their parking spot to your condo?  Does your guest have a great spot in front of your unit?  Maybe there is no parking at all for your guest?  Maybe there is no overnight parking in your complex?  This is something that sometimes gets forgotten when you are buying a condo.  Add "check the parking spaces" to your buying checklist.

You may even want to get your parking arrangements in writing when you purchase your condo.  There are often "no parking fire lane" signs exactly where everyone wants to park.  Do you want to get towed or worse yet, not allow emergency vehicles to get access to your unit?

Check the bylaws or call the association if you are not sure.  Parking might become an issue if that's important to you.  It's also something to think about one day when you want to sell.  It will make your unit more attractive if you can offer that information to a buyer when you are ready.  

 

Posted in Condo Living
May 19, 2022

Condo Homeowner Association Dues

Let's Talk Association Dues in a Condo Complex

As a condo owner, you may be required to pay homeowner association dues to the condo association or management company that manages the condo association.

When Are They Due, How Paid and What They Cover?

When you are looking to purchase a condo, you will want to be aware of what those fees are, how often they are expected to be paid, and what they cover.  Also, you will want to know how you can pay them.  They are not included in your mortgage payment.  They are a separate payment made to the association.

How Do I Find Out What They Are?

If the condo is for sale through a real estate broker, that information should be available on the listing information.  You should always verify that fee to be sure that it's correct.  This fee is in addition to your mortgage payment, insurance payment and tax payment.  It could also be increased in the future if the association votes to increase it for a number of reasons.  You will want to be sure that you can afford your condo costs including this additional association fee.  It is common to see the fees due monthly if more items are covered by the association.  I have also seen them quarterly or yearly, but they likely will only cover minor items.  A good suggestion is to get involved at your association meetings to give your input and know what is going on.  At closing, the title company will request a status letter (normally paid by the seller) from the association verifying the fee.  If you wait until closing to verify it, and it's incorrect, it's probably too late.

Renting a Condo

As a renter of a condo unit, normally the association fee is paid by the condo owner/landlord.  

What Happens if the Association Dues Don't Get Paid?

If the association fee does not get paid, a lien can be placed on the condo from the association.  When buying a condo, this is a good reason to utilize the services of a title company to find this information out before you close.  They will check any liens attached to the property as well as make sure that any unpaid dues get paid, if that is what you agree upon in the purchase.

How Does the Association Know I'm the New Owner?

When you close as a buyer, the condo association will be informed of the new buyer information from the title company and hopefully forward a welcome packet with instructions as to how to make your future dues payments.  If you do not receive this, you will want to contact them.

New Construction Condos

In new construction condos, the association may not be developed yet.  Hence, there will be no association fees initially.  You may not have to pay any association dues until one is established.  Just be prepared to budget for them in the future.  Get involved at the association meetings to give your input.

What are the Association Dues Used For?

All of this should be included in the large bylaw packet that you should be reviewing when your purchase your condo.  Most common items are; escrow funds for insurance, maintenance upkeep such as lawn service, sprinklers, maintenance of common areas, clubhouse, swimming pools and utilities such as water.  You can always contact the association for specific items.  You will want to verify if there is something specific you are concerned about.  Once you buy your condo, you are acknowledging that you are aware of these dues and what they cover.

 

Posted in Condo Living
Oct. 20, 2021

Home Inspection vs. Appraisal

Home Inspection vs. Appraisal

Do you know the difference between a Home Inspection and a Home Appraisal?  They are two very different things.  Sometimes buyers ask me if they really need to do a home inspection if they are having an appraisal on the property that they are buying. My answer is that you should because they are not the same thing.  The home inspection is for the buyer's benefit.  It does take a lot more time inside the home when it's inspected. The appraisal is for the benefit of the lender. Both of them are paid out of pocket by the buyer. They both have different purposes. Watch the video below and let me know what you think.

 

 

Every transaction is different, but hopefully this gives you a general guideline between inspections and appraisals.

 

June 10, 2021

Wiseguys Bar and Grill Clinton Township, Michigan

I stopped by Wiseguys Bar and Grill today for lunch. It is conveniently located on Harper just North of Metropolitan Parkway in Clinton Township, Michigan. The address is 37208 Harper.  They are very close to I-94 as well. I immediately felt that this was a fun place when I walked in. The music was playing, there were tons of TV screens throughout, a pool table and dart board game.  

The seating included booths, tables, high top tables and stools at the full size bar. The decor was cool too in a "wise guys" theme. Who doesn't love a popcorn machine with fresh popcorn for snacking? Yes, there is one here too! They also had my favorite things to thing to do in a bar and grill - Keno. It cost me $10 to win $7, but I had fun.

There was plenty of space inside, and the food and the service was good.  I enjoyed the calzone for lunch. Plus I had half of it to take home for another meal.

If you are looking for a cool place for lunch, dinner or a quick drink, check them out.  www.wiseguysbarandgrill.com

  

 

April 1, 2021

Earnest Money Deposit

What is the Earnest Money Deposit?

The Earnest Money Deposit is also known as the EMD. A deposit is normally taken when you write an offer on a home. It is not required, but highly recommended. It is unlikely that your offer will get accepted without one. There is no set amount required. In my experience, a deposit is normally about 1% of your offer price. If your offer is cash, a higher one may be requested. If you are in a multiple offer situation, you may want to consider offering a higher amount showing your serious intentions. You may want to also offer a waiver to the claim of the EMD if you do not continue with the purchase to make your offer more desirable.  

 

 

Be knowledgeable of the risks involved with your deposit. You may lose the claim to your deposit if you do not follow through with your purchase. This should be explained to you when you write your offer. As a seller, you may also have claim to the buyer's earnest money deposit in certain instances.  Your Realtor can explain your options.

As a buyer, this deposit does get credited to your closing amount that you need to bring at closing time.  For example, if you need to bring $10,000 to closing, your $2,000 deposit will be a credit. You would therefore only need to bring $8,000 to closing.  If you deposit in a rare case is higher than your funds needed for closing, you will get a credit at closing as well.

Your earnest money deposit is required to be held in a "non-interest bearing" account until your closing occurs.  

Hope this explains what the earnest money deposit is when you are buying a home.

Feel free to reach our to me, or leave a comment with any comments or questions.

March 16, 2021

How Do I Bring My Money for a Closing?

As a buyer or a seller of a home, there is likely a chance that you will have to bring your required funds for closing. I often get asked this question as to how this needs to happen.

Funds for closing cannot be in cash.  They either need to be in a cashier/certified check or they will need to be wired to the title company.  Some title companies will require a wire transfer if funds are over a certain dollar amount.  A cashier/certified check, as well as a wire transfer, can normally be done through your bank for a nominal fee.  The check should be made out to the title company (you should get instructions on your closing documents).  If you are sending a wire, you will need to have the wiring instructions for the Title Company to give to your bank.

Be aware that this is the time that Fraudulent interceptors will try to change your wiring instructions and take all of your money!  If you are ever concerned about a change in wiring instructions just before closing, contact your Realtor or the Title Company directly.  It is better to be safe than sorry.  Once you wire funds, they most likely will not be able to be retrieved. This will cause a loss of your money and likely a cancellation of the closing.

You will more than likely receive your final number within a few days of closing. This should give you enough time to get your check or have your wire transferred. . You will want to allow enough time for the wire transfer to go through the federal reserve and then to the title company. If the closing does not occur, your wire is safe and can be refunded. As always, double check with your Realtor as to how this process occurs with your specific situation.

Being prepared will help with a successful and uneventful closing!

 

 

Feb. 24, 2021

What are Seller Concessions?

If you are buying or selling a home, you need to be familiar with what seller concessions are.  Seller concessions are a monetary allowance from the seller to the buyer to help with their closing costs.  A buyer will still have to supply their down payment contribution.  Each party has closing costs when the buy or sell a home.  Depending on the type of loan that the buyer is doing, there are limits as to how much a seller can contribute.  The contribution can be a percentage of the purchase price, or it can be a flat dollar amount.

Pros and Cons to the Buyer

As a buyer, seller concessions can help you buy your first home.  You will still need to contribute your down payment amount, but the seller can contribute to all or some of your closing costs.  This will help if you do not have all the funds available to buy your home.  It may also help alleviate spending all of your savings in case you need it to do repairs or updates to the home after you close.  It is also very important to make sure that your buyer's agent knows, so that the seller concessions can be written in the purchase agreement.

A con as a buyer asking for selling concessions is that some sellers do not understand them fully.  They may have this notion that they should not be helping a buyer buy their home.  A buyer should be able to afford to buy it on their own.  It also hurts a buyer in a busy seller's market.  Your competition may be better qualified because they may not need the seller concessions.  A seller may be more inclined to take an offer that does not cost them more to sell.

Pros and Cons to the Seller

As a seller, you at least want to know what they are.  You home may be sitting stagnant with no offers coming in.  Do not focus on helping the buyer with giving them concessions.  Just concentrate on your bottom line net that you will be getting.  If your net price is acceptable, help the buyer with the closing costs and get the deal to work.  Isn't that your ultimate goal?  To sell the house?  Another option is the buyer can offer a little more on the purchase price to compensate for the concessions.  For example, if the buyer needs $2,000 in seller concesssions, have them offer $2,000 more on their offer price.  As long as the home will still appraise for the higher offer amount, this will help to compensate for the extra expense.

A con to the seller is obvious that this seller concession will be an extra expense to the seller.  It will be a deduction at closing and added to your selling costs.  Still, if the bottom line is ok, try and get the deal to work.

Comments or questions welcomed!  If you are looking for a residential Realtor in Southeastern Michigan, I would be happy to help!