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
There is no doubt that technology has changed the real estate industry…the days of looking for your next home in a newspaper are long gone. Buyers can find everything they need from pictures to floorplans to videos online. Redfin conducted a survey in May and found that 33% of people that bought a home in the last year, made an offer without first seeing the property in person. That is up from 19% the year before.
But a Virtual Reality tour of a listing is like hosting a 24/7 open house…without having to entertain the looky-loos. Even without the headset, these VR tours are cutting edge. You can check out a sample – one of Allan Domb’s listings – created by Matterport by clicking here. Stay tuned for more…
How can buyers sweeten their offer in lieu of coming in at a strong price?
*Shorten your settlement date- especially if the home is vacant.
*Shorten your contingency dates- have your home inspection in a week instead of 15 days
*Put more money down ( to be held in escrow- go a full 10% if warranted)
*Add an “As-Is” clause- doesn’t mean you are giving up your rights to inspections- just lets a seller know you will not be renegotiating after the home inspection.
* Write a really nice note about how much you love the seller’s home and why you are buying it
*If a property is vacant- but still has unwanted clutter and dirt- tell the seller you will buy as the property sits today and that you do not expect them to come back and clean or get rid of debris.
Many things in a Philadelphia real estate transaction are not logical, but are emotional. Sweeten that emotional pot and you might find you are going to save a few dollars. Happens more often than you think.
www.CenterCityCondos.com Berkshire Hathaway Home Services | Fox & Roach Realtors®
530 Walnut Street | Suite 260 | Philadelphia PA 19106
direct: 215.521.1523 | main: 215.627.6005 | fax: 215.402.1044
Of course I get tons and tons of folks emailing me looking to move into a Center City condo…no surprise there. But you might be surprised by who is actually buying in town. Here are some common groups of buyers who I see buying condos in Center City. Certainly others exist, but this is a generalization of what I see:
1) The Returnees – Grew up in Philly, moved elsewhere, and now returning. Being close to friends and family is often the draw.
2) The Empty Nesters- Shedding themselves of 75,000 pounds of unused house. They can often be very happy happy buyers who are starting a new chapter in their lives. I enjoy working with and watching them get excited for a move into town.
3) The Weekend Warriors- They have done the shore, now they spend their weekends in town. Much more common than you think.
4) The Kids Who Have Parents Who Have $$ – Very common. Very.
5) The Transferee- Maybe came to town via a promotion- and wants to be close to work. Moving to town wasn’t on the radar. Doesn’t matter- he or she is here now.
6) The Growing Families- It used to be that young adults would get married , and get a dog, two kids, a station wagon, and BOOM- off to suburbia they went. No longer the case. They now often represent our move up buyers in Center City.
7) The Investors- Who know that the city is the place to be, and that their investment will provide a handsome return year after year after year. Unless say Univ. of Penn moves to say the moon…a condo may easily be a magnet for a tenant.
8) The First Timers- The good ole reliable first time buyer. The backbone of the Center City condo market- always has been, probably always will be.
The Packard Grand Condos at 111 S. 15th St: Condo Assoc recently acquired the top floor of the building from the developer. It is a 3,300SF space (on the 27th floor) with fitness center, large west-facing outdoor deck, party room, meeting room, and large capacity laundry machines. This was a great move by the condo board for a building that had lacked amenities. The new fitness center is now open and the rest of the amenity floor will open by September.
Center City One at 1326 Spruce St.: Responds well to its broken water meter. The association took quick action and repaired and replaced everything with swift action.
Toll Brothers: Approx 160 new units right on 24th street! Expect delivery late July 2013. Based upon the success at Naval Square- look for these units to sell at a pretty good clip. 8 out of 22 sold in Phase One and ground hasn’t even been broken. Stay tuned for more details…
WaterFront Square: A trail runs through it- The Penn Street Trail – a section of the Central Delaware waterfront trail that will connect Spring Garden Street with SugarHouse Casino’s portion of the trail – is expected to open next spring.
Murano: 2101 Market St.- Sale prices doing exceedingly well post auction. They just re-listed all high floor units with Pru Fox Roach. Look for the remaining units to sell fairly quickly!
Penns Landing Square at 130 Spruce St: Spending money to better manage water run-off and to be more efficient at being able to segment water shut-offs in order to better serve homeowners. Touche!
Prudential Fox and Roach Realtors
530 Walnut St. #260 Phila., PA 19106
A LOT of the recent talk in Center City Real Estate circles has been about the number of multiple offers on various parcels, and how some places are sitting on the market for a only a week, and being sold in short order. This is clearly a change from the previous four years. Maybe not be true in all segments, but certainly becoming more and more common this year.
I think what most buyers in the Philadelphia Real Estate market have to come to terms with is that they may need to make their offer as attractive as possible on those homes that are in short supply, and in heavy demand. Even a gradual shift from a buyers market to a sellers market is difficult for buyers to grasp. Those in the know are going to fare much better than those who perhaps think they can come in at super low offers like perhaps that might have done in 2009.
As demand increases, and supply decreases, we will see the gradual escalation of values here in town. But remember, Philadelphia Real Estate values generally don’t skyrocket…they meander up or down depending upon market conditions. This certainly lends strength to the fact that
“All in All”, the Philadelphia housing market is relatively stable…relatively speaking.
We have not seen the peaks that perhaps NYC, Miami, or parts of Southern California have seen over the years, and in turn, we are not seeing the loss in value as many other big cities have seen over the years.
Be happy you live in Philadelphia.
Prudential Fox and Roach Realtors
530 Walnut St. #260 Phila., PA 19106