This might be a good time to buy a condo downtown, a property that can be rented out, a cabin in the city, or a primary residence. About 25% of all homes on the market in St. Paul are downtown condos. While the rest of the city is experiencing a seller’s market the downtown market favors buyers.
The graph below is a three-month rolling average of average sale prices in St. Paul as compared to downtown. There are definitely some bargains but pay close attention to the monthly association dues.
There are condos and townhouses where pets are not allowed. I know of one condo building that won’t allow pets except fish. Some associations have
height and weight and limit the number of cats and dogs. Maybe they allow cats but not dogs. I haven’t seen any that allow dogs but not cats.
There are pet-friendly condos and townhouses and some that don’t allow pets.
There are various reasons for not allowing pets. I recall one association did not allow dogs because most units had hardwood floors and there was some concern about the noise dogs might make walking across the floor. That association has many rules that don’t always make sense to outsiders.
Pet restrictions are in the condo documents. Just because a condo is advertised as allowing pets that doesn’t make it so. Lately, I have found several condos listed as having height, weight, and or breed restrictions for dogs. When I ask for more information it is all vague. Apparently, there are some types of dogs that some owner’s associations don’t allow.
Weight restrictions and height restrictions tend to be specific, although I am not sure who measures and weighs or what happens if there is a weight restriction and the dog gains weight.
Pets are important to many of us. According to the National Association of Realtors® (NAR), 43% of households indicated they would be willing to move to better accommodate their pets, demonstrating that pets are a priority for many consumers as they look for homes.
If you buy a townhouse or condo in Minnesota there is a ten day rescission period. That means you have ten days to read the condo documents including rules, bi-laws and financials. Some condo associations will even share meeting minutes from home owner association (HOA) meetings.
A buyer can cancel the purchase with no penalty if there is something in the HOA documents that isn’t acceptable. Over the years I have had a few buyers cancel a condo purchase because of rules like pet restrictions, rental restrictions and other restrictions on how the unit can be used.
Sometimes the HOA doesn’t have adequate reserves to cover maintenance or unforeseen repairs. Which means owners may receive large assessments to pay for repairs.
Maybe the HOA dues are just too high.
It is important to understand that it is the buyer who needs to read and understand HOA documents and that any questions should go directly to the HOA. Seller’s do not always have the facts and real estate agents should stay out of it. Everything is in writing from the association.
NEVER rely on what a real estate agent or a condo owner says when it comes to anything that the HOA controls. Go directly to the management company or designated member of the HOA board of directors. Get everything in writing.
Buyer’s agents and listing agents should refrain from answering questions or acting as a go between when the buyer is doing due diligence. Some real estate agents get too involved. Seller’s should always direct questions to the association.
Agents may assist their clients by providing phone numbers and email addresses or forwarding documents to the buyer but should not be answering questions for the association.
I wouldn’t mind living here. This is vacant retail space in downtown St. Paul. There are no current plans to covert the spaces in the picture to housing but we need more housing and the space has been vacant for a few years. Workers have returned to downtown but there are far fewer of them and few businesses too.
The spaces in the picture could be converted into lofts, taking advantage of the sunny southern exposure.
Before deciding that the monthly association dues for a condo or townhouse are too high, find out what they cover and do some comparisons.
I don’t pay association dues, but it costs about $110 a month for homeowners insurance and another $25 for trash pick-up but that doesn’t include the part we pay through our property taxes. Water is about $53 a month. Add that up and we are already at $188 a month for items that are typically included in association dues.
We had the place reroofed a few years ago that cost several thousand dollars and is typically paid for with association dues. There are other items that are covered like snow removal and lawn care.
Some associations cover heating, cooling, cable and internet which can easily add up to another $300 a month.
People who live in condo buildings with underground heated garages pay for it through their association dues.
Some condos owners enjoy shared amenities like balconies, decks, swimming pools, party rooms, and exercise rooms with equipment. There might also be a library, a craft room and maybe a guest apartment.
Owners also pay for security access, professional management, mail rooms, laundry rooms and elevators. It all adds up.
People who do not want to pay for all of the amenities might be able to find a condo with fewer amenities and lower dues. Either way it is important to understand what the dues are paying for and to make some comparisons before deciding that association dues are too high. It is even possible that living in an association will be less costly than owning a house or renting an apartment.
ICondo buyers receive disclosures and financial statements from the homeowners association before they buy a condo. It is a state law. When they go to sell the condo and request condo documents for the buyer they will have to pay hundreds of dollars for them. If they want the documents in a few days they will pay fees to expedite them.
Owners will pay fees at closing for documents from the association needed for the closing. They may also pay more to have those documents expedited.
These fees are a surprise to the owners because they don’t find out about them until they go to sell. The fees are not negotiable and owners are forced to pay if they want to sell, so they pay and move on.
Are they junk fees? Often the documents are all electronic and accessible through the Internet. Back in the bad old days, they were printed documents. Sometimes many pages in large plastic three-ring binders. Charges for paper documents make sense.
Condo owners should have a plan for getting all of these documents so that they do not have to pay even more to expedite the process.
Buyers have ten days to review the documents before committing to buying the condo. The ten-day recession period doesn’t start until the buyer gets the documents.
How expensive are your condo documents? How easy is your association or management company to work with when it is time to sell?