Looking to buy a condo -- but . . .

[Benzadmiral]

Hey, everybody,

I'm finally, I believe, in a place to consider buying a condominium. I'd prefer that over a house, attractive as the idea of a house is, because:

1) Cost. Any decent house in a decent neighborhood here is 2 or more times what I feel I can pay, even with a big down payment.

2) Convenience. I've lived in apartments all my adult life, and the idea of cutting grass in 90+ F. heat or climbing up on a roof to fix shingles fills me with mild but waning interest.

I've located a very nice unit in a good complex in the suburbs here, an area I know well. It's priced below the (horrendously inflated) market value here. However, I want to replace the carpet with laminate flooring and have the walls painted. Most disturbing, the home inspection process revealed that the A/C does not work.

At my cost, I arranged for a local A/C technician to come out and inspect the system. The unit is a good 23 years old, and to replace all of it would run some $4500. Yes, I can do that, but don't want to combine it with the painting and re-flooring costs. In other words, one of these problems, or two, would be fine; but not all three.

My real estate agent, a buyer's agent, suggests having the seller bring the A/C to working condition and buy me a home warranty. Everything I hear and read about these warranty companies makes me think of extended aftermarket car warranties: i.e., I'd be better off putting that dough in the bank. My mind conjures up a hot Saturday in July with the A/C out; I can't get the home warranty people on the phone, or if I do they can't send someone until Monday; and each technician visit results in "We'll have to order the parts" and more excruciating delays.

Bottom line: Alarms are going off in the back of my head. I know buying a home is an enormous step . . . but A/C is too important to me to take a chance like this. My alternative, I suppose, would be to wait, to find a property that is in less of a fixer-upper condition, which would require a bigger down payment, etc.

Am I worrying for nothing? Are these home warranties worth so little?

 

[YKMV]

Was the house a smoker's house or pet owner's house?
if so and I were the buyer, carpet and walls would be an issue.
What part of the country and how often would you need to use the A/C?

 

[Benzadmiral]

Was the house a smoker's house or pet owner's house?
if so and I were the buyer, carpet and walls would be an issue.
What part of the country and how often would you need to use the A/C?

The place doesn't smell like a smoker's, or as though they had dogs or something like that. I'm just terrifically tired of cleaning the carpet when one of my cats throws up. And as an apartment dweller, I'm sick of white walls; I want to pick my own color. That is less important than the floors, though.

As Luke Skywalker put it, I'm in the spot farthest from the bright shining center of the universe: S. Loozyana. A/C is a necessity at least 10 months of the year, and may be needed often in January and February too. For instance, we're squelching our way through a humid 75 F. this morning. A/C is never optional.

 

[YKMV]

FWIW... and in order of importance...since you're in "S. Loozyana"....
A/C
A/C
A/C
Remove carpet
Paint in a couple of years...white is boring but at least it's not hot pink
The money put into a new A/C unit with a warranty in your name and a "personal" relationship with the installer who has your money would be best. You, not the previous owner, is the client of the installer and he owes you, not the seller, his loyalty and reputation.
If you aka your buyer's agent can get the seller to knock off all or half the cost of the new A/C, it probably is worth it.
And, you said that this house is below market price for the area, so your A/C investment should bring up the value of the property.

 

[FarmerTan]

FWIW... and in order of importance...since you're in "S. Loozyana"....
A/C
A/C
A/C
Remove carpet
Paint in a couple of years...white is boring but at least it's not hot pink
The money put into a new A/C unit with a warranty in your name and a "personal" relationship with the installer who has your money would be best. You, not the previous owner, is the client of the installer and he owes you, not the seller, his loyalty and reputation.
If you aka your buyer's agent can get the seller to knock off all or half the cost of the new A/C, it probably is worth it.
And, you said that this house is below market price for the area, so your A/C investment should bring up the value of the property.

All of this.

I own my home, paid off, but it's still costing money in repairs, etc. I have a GREAT neighborhood in the country, but I see I a more temperate area in my future. Lawn mowing is only fun in your head in February in Michigan.

 

[Benzadmiral]

All of this.

I own my home, paid off, but it's still costing money in repairs, etc. I have a GREAT neighborhood in the country, but I see I a more temperate area in my future. Lawn mowing is only fun in your head in February in Michigan.

Believe me, I dream of moving somewhere higher, drier, and cooler, in a few years. In the meantime, I'd hope this property would appreciate somewhat and, when I'm ready to sell, give me a small profit at least.

I told the agent I didn't want any fixer-uppers -- that I needed a property that I could move into and be comfortable (read: working A/C, hot water, no leaks or roof or serious wall problems) right away. Everything else about this condo clears my (admittedly high) bar. But this is big, folks.

My current apt. lease is up at the end of May. I want to move in March or April, pay the old dump in April, give them 30 days' notice, pay for May, and hand them the keys on 5/29. (See, it would cost me two months' rent to break the lease, so I have to pay two months anyhow.) And I certainly don't want to be moving during the hell of full summer, which will be on us, I see, by the end of April if not sooner. So I'm up against a minor deadline here. I can ignore it and break a new lease in, say, October (which is still nasty hot). But I was hoping to escape the old place before May.

What's that old rule? "Everything takes longer and costs more"? If I have three or four big things to correct on the condo before I can move in, dollars to doughnuts the place won't be ready by April.

 

[njpaddy]

After 25+ years of apartment living, my wife and I bought a house 16 years ago. Now that we're older (late 60's/early 70's) and the kids are gone, my wife wants to move back to an apartment because of the cost of maintaining the house. The house needs new roof, deck repair, landscaping, etc but. I don't want to go back to an apartment. My daughter and her husband were in a "nice" apartment complex for a couple of years, paying over $2,000 a month and still had druggies and dealers as neighbors. Our neighbors for the past 16 years have been great, but 2 are now contemplating moves south which scares my wife. I suggested that if we move we should look at senior condos, but my wife is not sure she wants to go that route or if we can afford it.

 

[Benzadmiral]

After 25+ years of apartment living, my wife and I bought a house 16 years ago. Now that we're older (late 60's/early 70's) and the kids are gone, my wife wants to move back to an apartment because of the cost of maintaining the house. The house needs new roof, deck repair, landscaping, etc but. I don't want to go back to an apartment. My daughter and her husband were in a "nice" apartment complex for a couple of years, paying over $2,000 a month and still had druggies and dealers as neighbors. Our neighbors for the past 16 years have been great, but 2 are now contemplating moves south which scares my wife. I suggested that if we move we should look at senior condos, but my wife is not sure she wants to go that route or if we can afford it.

NJPaddy, I'm in your age bracket and still healthy, but there's just me. My long-time lady friend Miss Linda is stuck to her life like moss is to a tree; she hates change worse than my cats do. My view is that I've already made major changes in my life at various times, some imposed on me (divorce) and some my idea (career change, going back to school at night, moving to Denver, etc.). If, when you're in a situation that is nearly intolerable, almost any change has to be for the better.

Yeah, it's a big change, and there will be ongoing repair and maintenance costs. But I'm sick of looking at the same walls and the same ugly Section Eighters as neighbors.

My instincts are telling me that the worries and possible problems of this particular place are outweighing the joy of buying and living in it. And that's not good.

 

[FarmerTan]

Brother Benz, I feel your pain. And where you are means GOOD working A.C. is a necessary thing, not a want. Heck, at my home here in Michigan I consider it a necessity.

My wife is getting real tired of the lack of sunshine here. She was born in the mountains out west. I could move there. But the beaches in Michigan I consider world class. Getting old sucks.

 

[FarmerTan]

After 25+ years of apartment living, my wife and I bought a house 16 years ago. Now that we're older (late 60's/early 70's) and the kids are gone, my wife wants to move back to an apartment because of the cost of maintaining the house. The house needs new roof, deck repair, landscaping, etc but. I don't want to go back to an apartment. My daughter and her husband were in a "nice" apartment complex for a couple of years, paying over $2,000 a month and still had druggies and dealers as neighbors. Our neighbors for the past 16 years have been great, but 2 are now contemplating moves south which scares my wife. I suggested that if we move we should look at senior condos, but my wife is not sure she wants to go that route or if we can afford it.

The ONLY reason my neighbors didn't move back south is my lovely bride. Good neighbors are more valuable than gold.

 

[ackvil]

We bought a townhouse in FL. The original order bought it as a spec property and nobody ever lived in it. The first week that we moved in the hot water heater broke. The second week the AC went. The house came with a warranty. However, before major repair work had to be done the warranty company had a right to inspect the property and assign a repair company. It took almost two weeks to get the water heater and subsequent damage repaired and cost me $500. The AC unit had a warranty with it but it took another two weeks to fix.

When we moved to AZ we learned that most of the companies charged a premium of $500 a year and had a deductive that averaged $75 to $100. As a result we passed on the warranty.

 

[FarmerTan]

We bought a townhouse in FL. The original order bought it as a spec property and nobody ever lived in it. The first week that we moved in the hot water heater broke. The second week the AC went. The house came with a warranty. However, before major repair work had to be done the warranty company had a right to inspect the property and assign a repair company. It took almost two weeks to get the water heater and subsequent damage repaired and cost me $500. The AC unit had a warranty with it but it took another two weeks to fix.

When we moved to AZ we learned that most of the companies charged a premium of $500 a year and had a deductive that averaged $75 to $100. As a result we passed on the warranty.

And hopefully paid yourself so you were ready for the eventual repairs.

 

[Benzadmiral]

We bought a townhouse in FL. The original order bought it as a spec property and nobody ever lived in it. The first week that we moved in the hot water heater broke. The second week the AC went. The house came with a warranty. However, before major repair work had to be done the warranty company had a right to inspect the property and assign a repair company. It took almost two weeks to get the water heater and subsequent damage repaired and cost me $500. The AC unit had a warranty with it but it took another two weeks to fix.

When we moved to AZ we learned that most of the companies charged a premium of $500 a year and had a deductive that averaged $75 to $100. As a result we passed on the warranty.

That is the kind of story I've been reading online about consumers' experiences with the home warranty companies, even the big one, American Home Shield. When you need your air fixed, you need it NOW, not in two weeks.

I believe I am going to pass on this particular property. When alarms in your mind are going off about something, if you ignore them, you deserve whatever you get. I may well be passing up a tremendous bargain; a year from now I may wish I'd gone ahead with it. But right now my (sometimes overactive) imagination pictures the shipyard boss saying, "Yessir, Admiral, we'll have that new nuclear sub ready to launch in 18 months," and 16 months later the keel hasn't even been laid yet.

 

[Macfrommichigan]

Put in a fair offer subject to attorney approval and contractors inspection, with seller fixing whatever is wrong, and supplying you with a warranty on major systems and appliances. Then paint the walls the color you like.

Condos appreciate less than single family homes. They are an apt you own, and you pay a monthly HOA.

Count on living there four or five years to break even.

 

[Billski]

Live there for five years to break even.

 

[dfoulk]

What I've seen with the home warranties from friends that have had them is that they will find a way to fix what you currently have. One friends garage door opener broke so they spent hours and a couple visits taking it apart to replace the gear. When you factor in the labor I'd have thought they would have just bought a new unit and replaced it. Fridge, dishwasher same deal. They will spend eight service hours at $50 an hour replacing a $12 part to avoid replacing an $200 unit.

It's not usually a quick fix either as when the AC breaks in the heat of the summer that's when everyone else is having the same problems. So what you'd get fixed in a day or two on your dime might be a week or two. Worst case some window air conditioners can get you by but you're not saving money if you're buying those.

Another friend has his AC unit gutted and replaced with impossible to find parts as opposed to replacing the unit which would likely be have been a cheaper option as they pretty much rebuilt the entire thing. So he has a brand new inside but still 12 year old unit now.

Know going into it that they will find parts that no longer exist and spend way more time that is justified in order to fix what you have. So if you limp the AC along in hopes that a home warranty will buy you a brand new more efficient unit you can probably forget that happening.

It's a good option if you want to keep what you have running and to avoid a large expense, but they're certainly not giving anything away.

 

[StillShaving]

I would also pass on the home warranty.

As for the AC I would get a second opinion from a trusted source. Maybe it is at the end of its life but maybe the repair is really something simple like needing more refrigerant that will keep it working well another 5+ years. Yes, a new AC system will be more efficient and perhaps use more environmentally friendly coolant but there is something good about repairing a system instead of replacing. About three years ago there was an issue with my HVAC system and as soon as the product/sales guy at the company got word of the issue he started going into sales mode. I got a second opinion from a different company and after an expensive injection of 1-2 pounds of refrigerant it is still going strong. The second company noted that my system was fairly reliable and the company still made parts (it was about 25 years old)....so he was happy to continue to service it for me, just give him a call.

Assuming a new AC system is needed I believe it should still be a mostly economic calculation. e.g. is $Condo + $new_AC + $fresh_paint + $new_flooring > market value of different property.

 

[StlEd]

How many square feet is the condo you're looking at?
What restrictions are there on the unit or in the complex?
Would you be able to install a mini-split or two at a lower cost than replacing the AC, especially if you can do the work yourself?
A mini-split would probably cost a bit bit more to run, but the break even point could be years out. Also, a mini-split would be a backup heat source that could be less expensive if the condo currently has no heat, or electric heat only; so, that might save some costs during cool weather (looks to be about 60 down there today.)

 

[oc_in_fw]

After 25+ years of apartment living, my wife and I bought a house 16 years ago. Now that we're older (late 60's/early 70's) and the kids are gone, my wife wants to move back to an apartment because of the cost of maintaining the house. The house needs new roof, deck repair, landscaping, etc but. I don't want to go back to an apartment. My daughter and her husband were in a "nice" apartment complex for a couple of years, paying over $2,000 a month and still had druggies and dealers as neighbors. Our neighbors for the past 16 years have been great, but 2 are now contemplating moves south which scares my wife. I suggested that if we move we should look at senior condos, but my wife is not sure she wants to go that route or if we can afford it.

I made my last house payment 2 years ago. Due to my wife’s disability, my yearly property tax is $1900 a year. Without that, it would be $3200 a year. Even at that, this is 2.5 months of rent at a decent apartment. Houses have upkeep costs, but I still save money over paying rent, and I don’t have to put up with the neighbor above me who walks as gracefully as an M1 Abrams.

 

[Mick]

Carpet and paint are decorating items. When you sell, buyers may not accept laminate and want carpet, tile, or "real" wood (decorating). They may not be into Darth Vader black walls. These are expenses you will have with any purchase.

Roof
HVAC
Plumbing
Electric

These are repair items and most banks won't loan on properties with major defects in any of these.

Ask if the HOA/condo fees cover roof replacement. If not, start putting aside $15-20k or expect an additional lean against your unit. If the HVAC is 23 years old, so is the complex roof. Your unit may not leak but if another starts, it is new roof for everyone

Since you are looking at a condo/co-op I've left out landscaping and pool. Looking at a house, add these to the list of must be working items for a loan

.