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Sunday, March 14, 2004 - Page updated at 12:00 A.M.

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Quest for a condo: First-time buyer in Seattle baffled by lingo and rules

By Diana Wurn
Special to The Seattle Times

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10 questions for condo buyers
I wanted a condominium in Seattle for $150,000 or less. It didn't seem so unreasonable — until I started looking.

I soon began to wonder whether it might be easier to buy and live in the roomy yet rustic Kalakala, for a little over $135,000.

Newspaper advertisements led me to affordable condos in dusty corners of the city: a condo behind big iron bars and security cameras in the Summit neighborhood of Capitol Hill, a "cozy studio" in Eastlake the size of a minivan and the Queen Anne renovation that seemed to need a few more years of renovating.

The current mortgage rate will not last forever, though, so I knew I had to look, even though I had waited much longer than many of my peers to jump into home or condo ownership.

I pictured myself in a nursing home someday with my wrinkled fist batting the air, ranting about how I let that primo rate slip by and how I doomed myself to rentals for the rest of my days.

During my search, I rented a one-bedroom unit in a condominium complex and got to experience first-hand the thrill of condo living.

My first clue that there could be trouble was the "meeting agenda" posted on the front door. "Discuss limiting renters" was one of the items.

As a renter, I wasn't invited to the board meeting, but I soon learned that board minutes can be obtained by contacting the condo management company.

The minutes are a great tool for potential owners to learn the inside scoop on any building. From the condo minutes I could see that an increase in homeowners' dues was being discussed.

Shortly after that meeting, new rules went into effect limiting smoking on balconies and dogs in condos. I explained the situation to my dog, who did not understand how this could have happened.

Rules have a purpose

One of the biggest issues of condo ownership is living with rules that are created to benefit the common good.

Condo-buying tips

Not all dues are created equally. Always ask what the homeowners dues cover. One building may include maintenance and another may not. The amount of money going toward the reserves also will vary by building.

Plan ahead. A look at city planning projects can help determine the direction the neighborhood is heading — or at least the buildings next to your new home.

Find out how long the property has been on the market. A condo that has been on the market for a long time may be overpriced, and this could be a negotiating tool.

A market analysis should be done to learn the going rate for condos with similar square footage in the desired neighborhood. You also must know if you are operating in a buyer's or seller's market before you make an offer.

If the seller uses the phrase "the association takes care of that" in response to a question you ask when researching a condo, remember that "the association" is you, and the prospect of shared responsibility could soon become a reality if problems develop.

Source: The Washington Condo and Home Ownership Circuit

New condominium owners need to perform a careful self-assessment of their ability to live within the restrictions outlined in the bylaws of the association.

Jim Strichartz, a condominium attorney who represents owner-controlled associations, notes that the Washington Court of Appeals has found that, "Central to the concept of condominium ownership is the principle that each owner, in exchange for the benefits of association with other owners, must give up a certain degree of freedom of choice which he or she might otherwise enjoy in separate, privately owned property."

With this in mind, I stumbled through a few "for sale" units in other buildings. I realized that I needed specific information in order to navigate the somewhat treacherous land of condo rules and regulations. First, I had to learn the terms associated with condos, such as "assessment," "reserves," "resale certificate" and what could happen if the owners sue the builder — "group litigation."

I learned these words at a free, day-long condo-buying seminar through the Washington Condo and Home Ownership Circuit. The group is among those that present information on home ownership sponsored by the nonprofit Washington State Housing Finance Commission.

First-time home buyers who attend one of the seminars may qualify for state programs, such as loans with low interest rates.

Keep info to self

The seminar taught me that listing agents are not my friends, no matter how friendly they seem, so it is often best to be stingy with information.

Common terms for condo buyers

Assessment — If a major repair is needed and there is not enough money in the reserves, the owners may be hit with an assessment. The cost of the repair is divided among the homeowners based on square footage. Owners may pay extra in their homeowners' dues or in a flat fee upfront. If the association is run well, assessments will occur rarely.

Association — The group of homeowners that manages the condo, usually made up of a president, vice president, secretary and treasurer. The group meets regularly to resolve issues related to the building.

Bylaws — Rules for the common areas that list responsibilities of the homeowners. It also is included in the Resale Certificate.

Homeowner dues — The monthly dues that all owners pay toward their share of upkeep and other costs associated with the building.

Resale Certificate — The "big thick packet" of information provided before a sale for resale condos. The seller obtains the certificate, and the buyer has five days to review it. It should include the last two or three months of board-meeting minutes and may reveal any problems with the property.

Reserves - A surplus fund that is intended to cover any repairs on the building and to which all owners contribute.

Seller Disclosure — This is the "Form 17" the seller completes to reveal what is known about the condition of the condo and whether any special assessments are coming up.

Source: Camille English, RE/MAX real-estate agent

The next time I looked at a condo, I noticed that the listing agents would ask a lot of questions. Armed with this buying tip, I entered one condo too apprehensive to give my name. I then tried to view the property while being trailed by a rightfully suspicious agent who followed me from room to room and had to be dodged with crafty football moves.

Maybe I was taking the condo-buying rules a little too literally. I tried to loosen up. Finding a knowledgeable broker who specializes in condo ownership can take some of the fear out of looking, according to the seminar.

My new, aggressive young broker carried a clipboard and kept getting emotional about siding. He took me to see many strange and wonderful condos that I could not afford. One was in my price range, but its stunning location next to a fast-food restaurant produced a finger-licking smell that promised to linger even after the restaurant closed. I learned that the olfactory system is one of the most important senses to use when visiting properties.

I was shown another condo that had a nice view of Lake Union. I noticed that the empty lot directly in front of it was for sale. A quick e-mail to the Seattle Department of Planning and Development about height restrictions revealed that a new building easily could be built in front of the condo and eclipse any view of the water.

Back at the condo I was renting, heavy rains had caused a leak somewhere in the roof of the garage, where water pooled into an incriminating puddle and trickled out the door. Since I had learned that an "assessment" means that all the owners would have to pay for the cost of the repair beyond what was available in the reserves, I experienced a surge of relief when I remembered I was a mere renter.

Renting not all that bad

Yet the ubiquitous urge to own property still filled all my weekends with open houses and long, heartfelt talks with my mortgage broker.

After many months, though, my pace decreased. I dropped off my broker's A-list, and he stopped flooding my e-mail account with unattainable listings.

I started to experience a new sense of serenity in the flexibility of renting, which is only slightly damaged each month when I sign my rent check.

Someday, "for rent" signs will be scarce, and mortgage rates will rise. Until then, waiting might be the best plan for me. My dog, who was "grandfathered" into my lease after a benevolent board member made a good case for me, also has been supportive of taking time to find the right place.

And in the meantime, my belabored condo search has given me new skills.

I can now spot a "for sale" sign the size of a postcard while driving 60 mph. I'm also able to defend myself against unreasonable sales brokers and strange real-estate terms.

If I keep an open mind, along with some patience, I know that someday I will find that perfect spot in the middle of the city that thousands of other buyers overlooked.

Diana Wurn is a freelance writer living in Seattle.


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