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January 31, 2018

Answering Philly Condo Reserve Questions

Filed under: For Buyers,Of Interest to Buyers,Real Estate: Condominiums — Center City Philadelphia Real Estate Agent @ 2:53 pm

Here are a few condo reserve questions I often get asked:

1) How much money does a certain condo association have in its kitty?
You really are not going to know the answer to that question until you purchase the condo and review the condo docs. The state of Pennsylvania allows for a five-day review of condo docs for you to make an informed decision. Some buildings stockpile a boatload of $$ – and others simply just assess when needed. I usually find that the very small buildings and the very expensive/exclusive buildings in town don’t keep that much $$ on hand- their way of making improvements is to simply assess owners when needed.

2) How much in reserves is required by Fannie Mae for the building to be “warrantable?”
Although there is no set amount (for the ability of buyers who want to buy in a particular building), it is probably a good idea to be setting 10-15% aside every month for capital improvements.

3) What are capital expenditures?
Reserves for deferred maintenance (performed less frequently than yearly in order to maintain the asset’s useful life) and capital expenditures (purchasing or replacing assets that have a useful life over one year) are required for certain building components unless the board votes annually to waive and/or reduce reserve funding.

4) WTF is a capital contribution???
Buyer pays two months worth of condo fees into the ASSOCIATION- this does not go to the seller and this helps to build the kitty for future improvements. You do not get this payment back when you sell the condo and it is not a pre-payment of condo fees.  This contribution is now applicable for almost ALL condo sales in town.

5) How much should my Philly condo association have in reserves?
This really is a function of the board’s goals and the current condition of the entire parcel including the roof, windows, elevators, etc. Most folks I speak with suggest 10% -15% of the TOTAL annual intake of condo fees to help build the kitty. A professional reserve study may be in order to best guide an association.

Email me for details and I may be able to help with this. 🙂

Mark Wade 
www.CenterCityCondos.com | BHHS Fox & Roach Realtors
530 Walnut St. #480 | Philadelphia, PA 19106
Mark@CenterCity.com | 215.521.1523

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June 8, 2015

Do Expiring Tax Abatements Equate To Lower Resale Values In the Center City Condo Arena?

Filed under: Center City Real Estate,For Buyers,For Sellers,General Real Estate — Center City Philadelphia Real Estate Agent @ 2:36 pm
 There are a number of buildings in town whose tax abatements have run their course and an even bigger pile whose abatements expire over the next few years. The net effect on resale values and demand comes into question for many buyers. Here is my opinion:
     Center City CondoBuildings such as The Phoenix at 1600 Arch St. and Dockside at 717 S. Columbus Blvd. have expired abatements. Buildings like York Square, WaterFront Sq (in the Peninsula and Regatta towers),
many Naval Square units-as well as many other buildings erected here in town in the mid-2000’s are soon to expire. I have heard (though I certainly am usually not one to speak on behalf of city hall) that the tax rate for condos will be 1.34% of assessed value when abatements expire.
   If we look at the sales data from buildings whose abatement has expired over time, the net effect of an expired tax abatement is almost nil when looking at resale prices, demand and values. I have not seen any instance of value dropped solely based upon the expiration of a tax abatement.   Why, you ask? Here is what I gather from my many condo buyers in town:
   Lee Iococca adopted a theory he called “The Equality Of Sacrifice” – which I interpret to mean that as long as everyone is in the same boat (of an unabated tax bill) – then any fears of inequity are diminished.  And I believe that to be true. FULL ten-year tax abatement offers are few and far between in town these days
…. Except for maybe the last three units at WaterFront Square in the Reef building and a smattering of smaller new construction projects here and there.
   I think that buyers generally do not expect to see a “game changing”  benefit from the balance of any tax abatement. The entire market is rapidly aging in the expiration of the abatements and therefore I believe that any partial abatement period is kinda’ icing on the cake. It certainly can sweeten a deal for many, but I don’t think this is the end all, be all determining factor if a buyer buys “this unit or that”. But again, it certainly does not hurt to inherit the balance of an abatement 🙂
   Center City is more attractive than any abatement. We’re growing in size and popularity and the expiration of abatements and almost certainly isn’t going to keep anyone out of  town or out of any specific building in town.

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February 9, 2015

Attention Developers…

Filed under: Center City Real Estate — Center City Philadelphia Real Estate Agent @ 1:55 pm

ATTENTION DEVELOPERS….

Converting a Brownstone to Condos in Center City?

As the market begins to heat up, so does the demand for smaller associations like brownstone styled condos that tend to have lower condo fees, and a hint more character than say a high rise may possess. Here are a few hints a developer may want to keep in mind:

1) Make sure to carpet the common areas. No one wants to hear the owner of say unit 2R clomp his or her way through the halls with their high heels. Keep noise to a minimum in common areas- hardwood floor and or tile is not appropriate. Carpet these areas. Please.

2) Think about splitting your water bills up- meter each unit separately. Many buyers may be part timers or weekend city warriors, and may benefit from not having to pay for water that they don’t use on a daily basis.

3) If the city allows, and you have space in the basement, put up two by fours and chicken wire storage units. And buy a dehumidifier for the association. The minimal cost will pay for itself in terms of marketability like the Commodore Barry Condos.

4) Common Area paint should be done in a low gloss finish. And spend a few extra dollars on front door security and hallway lighting. Again, a small cost, but huge in the minds of many Center City brownstone styled condo buyers.

5) When you are done building the condos, take a step back, and put in another $2500 into each unit in terms of groovy paint, wallpaper, and lighting. You will no doubt be able to recoup every penny of that visual investment (and them some) and the condos will sell quicker. Much quicker.

Remember, your competition is going to be at least a decade or two old- so modern up to date cosmetics are exceedingly important for marketability. I find that what kills a developer in terms of profitability, is the time it takes to market a condo. A vacant condo is simply just p*ssing money down a drain.  I would suggest there is a fine line between over-improving, and hitting the market just right- in terms of pricing and your final product. Need some more advice?

Call me, Let’s chat.

Mark Wade
215.521.1523 / 215.627.6005
www.CenterCityCondos.com
Berkshire Hathaway Home Services Fox and Roach Realtors

 

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February 2, 2015

Buying Pre-Construction From a Set of Plans…

Filed under: Center City Real Estate,For Buyers,For Sellers,General Real Estate — Center City Philadelphia Real Estate Agent @ 12:50 pm

Remember that 1960’s board game “Mystery Date?”
Where you didn’t know if you are going to get the dreamboat or the dud? Well, that is not unlike buying a new construction Center City condominium from a set of plans….
Unless you have a crystal
ball or are perhaps from the future.
Some buyers win, some…not so much.
    Evidence of both scenarios have clearly played out in town over the past decade as buyers often purchased from developers’ plans.
108 Arch St. clearly handed the brave buyers a lovely place to hang their hat as finishes, layout, scale, light, ceiling height, nearly every factor turned out to be top notch- not to mention the finish quality.
   There is an upside to buying from plans- and that generally is a developer’s willingness to make alterations to his plans free of charge. Don’t need that 3rd bedroom, but want a larger closet and bath? Done. Want to pick your finishes in the kitchen, flooring and tile options, etc? No problem. Altering a floor plan or finishes prior to the developer buying or completing the interior work usually can be negotiated at no charge to the buyer…so some flexibility/benefit can be achieved by buying new construction.
   But the same can’t be said for many other condo buildings in town. Examples of poor workmanship, values that deflate rapidly, and buyers left holding the bag are not uncommon. Because truth be told, there are many instances where you really don’t know what the hell you are buying. And getting the developer to finish the unit, should a significant punch list survive settlement, might be like pulling teeth.
There are winners and losers when buying pre-construction.
My advice?
 Get a good real estate lawyer from the get-go, and DO NOT settle until the condo is finished. Don’t settle with a punch-list IF it can be avoided.  Some developers are true to their word…and honestly will service your condo post-sale. I think a few good examples of this would be my experiences with Pearl Properties,Toll Brothers and Rufo Properties. All were really great at post-settlement follow up.
Oh, and when the completion date is set for say June 1st…plan on moving in August 1st or so (in any given year). I’m just sayin’….the best laid plans can get held up in town and so many things are out of the control of a developer…so plan ahead.
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January 26, 2015

Answering Condo Reserve Questions

Filed under: Center City Real Estate,For Buyers,For Sellers,General Real Estate — Center City Philadelphia Real Estate Agent @ 9:28 am
No two condo associations are the same…much like snowflakes.
1) How much money does my condo association have in the kitty? 
  You really are not going to know the answer to that question until you purchase the condo and review the condo docs. The state of Pennsylvania allows for a five day review of condo docs for you to make an informed decision. Some buildings stockpile a boatload of $$ – and others simply just assess when needed. I usually find that the very small buildings and the very expensive / exclusive buildings in town don’t keep that much $$ on hand- their way of making improvements is to simply assess owners when needed.
2) How much does Fannie Mae Require to go into reserves every month for the building to be “warrantable?”
Although there is no set amount (for the ability of buyers who want to buy in your building) probably a good idea to be setting 10-15% aside every month for capital improvements.
3) What are capital expenditures?
   Reserves for deferred maintenance (performed less frequently than yearly in order to maintain the asset’s useful life) and capital expenditures (purchasing or replacing assets that have a useful life over one year) are required for certain building components unless the board votes annually to waive and/or reduce reserve funding.
4) WTF is a capital contribution??? 
   Buyer pays two months worth of condo fees to the ASSOCIATION- this does not go to the seller and this helps to build the kitty for future improvements. This contribution is now applicable for almost ALL condo sales in town like the Barclay Condominium.
5) How much should my association have in reserves?
     This really is a function of the board’s goals and the current condition of the entire parcel including the roof, windows, elevators, etc. Most folks I speak with suggest 10% -15% of the TOTAL annual intake of condo fees to help build the kitty. A professional reserve study may be in order to best guide an association- call for details and I may be able to help with this. Maybe not 🙂

 

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January 5, 2015

Real Estate Agent Cliques

Filed under: Center City Real Estate,General Real Estate,Of Interest to Buyers,Of Interest To Sellers,Real Estate: Condominiums — Center City Philadelphia Real Estate Agent @ 11:37 am

The Real Estate community here in Center City is not unlike High School. You have your Prom Queens, your Stoners, and your Jocks….not to mention the Wallflowers and the Loudmouths. All kinds of agents make our world go around…and that is great. Most agents are nice and cooperative but there are of course the real A-Holes that some agents try to avoid like the plague.

And if you think the Center City Real Estate community doesn’t have its own clique- then you would be incorrect. Some Center City Condo listings get more traffic than others just due to their basic popularity, like the Academy House at 1420 Locust St. Being cooperative, flexible, playing by the rules, etc., all have their benefits. I have heard repeatedly that agents will avoid certain listings because they don’t want to work with this or that agent for the next two to three months of their lives. I get it. I am not saying I condone such behavior, but I do understand it. I too do not want to deal with someone who is not going to return my phone calls, has a reputation of being a pain to deal with, or maybe even known to be a hint evasive or is just someone who is known for not being able to help carry a deal to closing because they haven’t (say) been honest with their clients. Or just plain aloof.

    And being “In with the In crowd” gives me access to properties that less popular agents can’t arrange.  I am in the clique, you see :-)   And I sell a lot of Philadelphia condos….so I may get a hint more wiggle room for weekend appointments, or last minute appointments. Or just get waltzed right past the doorman when I walk into a building.

 

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July 1, 2014

Really? You wanna’ buy that Center City Condo??

Filed under: Center City Real Estate,General Real Estate — Center City Philadelphia Real Estate Agent @ 12:56 pm
54
 

The old adage “Buyers Are Liars” is repeated often in many Real Estate circles. I think the line is a crock of sh*t….The line should be “Realtors don’t spend the time to get to know their Buyers.”

And there you have it….

The key to selling condos in Philadelphia. Find out as soon as possible what trigger is going to make any given condo work for a given buyer. Oh, and make sure you know everything about almost every condo in town and be able to discuss that condo at length, at the drop of a hat.

14
Here is a list of things that I find buyers really key into when shopping for a condo here in town:

1) Walkability
2) A Side of parking
3) Proximity to a given Point Of Interest
4) Areas in which they already are familiar
5) Curb Appeal / Interior Condition
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Which one of those blows the others out of the water?
That would be # 5…
69
I hear it all the time- “I want this area”, “I must have parking”, or I want to be able to walk around town”.  But many of those MUST HAVES fly out the window the minute the majority of buyers walk into a Philadelphia condo and fall in love with what they are seeing…usually quite a different story than what originally comes out of their mouths. NOTHING wrong with knowing what you like….I too am very visual.
Gone is the need for a study, or a 2nd bedroom, that large kitchen buyers have always wanted. Visually stunning condos here in Center City Philly are always in demand- regardless of most market conditions. Believe you me….and NEVER underestimate the fact –
IF IT SHOWS WELL, IT WILL SELL WELL

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August 19, 2010

Divide up your Old City Loft Space….but keep the light!

Filed under: Center City Real Estate,Of Interest to Buyers,Of Interest To Sellers,Real Estate: Condominiums — Center City Philadelphia Real Estate Agent @ 10:16 am

A buyer of mine sent me this link, www.RayDoor.com, and I think it is really groovy! And a great idea for many Old City condo lofts which have exceedingly large living rooms. By adding another bedroom area, and still keeping the light coming into your living room, you could quickly and easily add value.

raydoor raydoor 2 raydoor3 raydoor4

And the look is very hip and perfectly positioned for some of the neat Old City condos that Center City has available! See more at www.RayDoor.com.

Mark Wade
www.CenterCityCondos.com
Prudential Fox and Roach REALTORS®
530 Walnut St., Suite 260 Philadelphia, PA 19106

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August 12, 2010

An Insider’s Look Into The Center City Condo Activity

Filed under: Center City Real Estate,General Real Estate,Of Interest to Buyers,Of Interest To Sellers,Real Estate: Condominiums — Center City Philadelphia Real Estate Agent @ 1:30 pm

We hear all kinds of national news stories about the country’s current real estate market. Below is a simple breakdown of the number of showings that have taken place at Prudential Fox and Roach’s Center City Philadelphia Listings over the past 9 months. The figures are broken down by price ranges. There does not appear to be a lack of folks looking to buy and as usual, very early spring seems to produce the most Center City Condo buyers with traffic slowing mid-summer as many people leave for vacations.   

eshow

Leave a comment, or shoot me an email at Mark@CenterCity.com. I’d live to hear your thoughts on this “inside” Center City Real Estate report. Spring Market 2011 is just around the corner!

Mark Wade
www.CenterCityCondos.com
Prudential Fox and Roach REALTORS®
530 Walnut St., Suite 260 Philadelphia, PA 19106

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August 5, 2010

Sh*tty Philadelphia Condo Buildings

Filed under: Center City Real Estate,General Real Estate,Of Interest to Buyers,Real Estate: Condominiums — Center City Philadelphia Real Estate Agent @ 2:17 pm

…Have Sh*tty Resale Prices- If they sell at all.

 
Come on, you would have to be from the moon to believe all condo buildings here in Center City are created equal in terms of
demand, cache, and resale ability (in terms of price and “days on market”). There are some buildings in downtown Philly that just really suck, in terms of their investment value. And there are a handful of buildings that basically cannot resale at all.
 
Some of the signs to be aware of-
 
1) A lot of units on the market, and very few sold in the past 12 months
2) A high number of REO’s/Foreclosures/Short Sales
3) A low owner-occupancy ratio in the building
4) Poorly managed exterior and common area condition
 
Unless you are buying a short sale or a foreclosure in the building, or are in the mood to just piss your money away, I would suggest we talk prior to you buying in certain buildings.. Some Center City condominium buildings aren’t worth a look, much less an offer.

Mark Wade
www.CenterCityCondos.com
Prudential Fox and Roach REALTORS®
530 Walnut St., Suite 260 Philadelphia, PA 19106

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530 Walnut Street, Suite 480
Philadelphia, PA 19106
Direct: 215.521.1523 ~ Office: 215.627.6005
Fax: 215.627.3142
Email: Mark@CenterCity.com
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