How many homes have closed in the condominium project?
This is important because it reveals the “momentum” of a condo project. Don’t buy into the explanation of units “under” contract; ask them for the recorded/closed sales! The primary reason you should be concerned about this number is that some lenders cannot finance condos when the owner percentage is below 50%. Also, your condo is typically more marketable with a higher percentage of closed/recorded homes.
Washington Square has closed/recorded over 200 of its 377 condominium residences. Please ask your sales executive for the most up to date number.
Has the project received Final Certificate of Occupancy?
A temporary Certificate of Occupancy (TCO) has an expiration date. That means that while the condominium is safe for occupancy, this is a temporary approval that is subject to expiration. If you purchase a condo that has a TCO, you should consult an attorney and a professional architect or engineer to determine the requirements for obtaining a final Certificate of Occupancy (CO) before purchasing.
Washington Square received Final Certificate of Occupancy in December of 2008.
Has the condominium received project approval from Fannie Mae or FHA?
In today’s market, Fannie Mae, Freddie Mac and FHA have new stricter rules when it comes to condo financing. At the moment, Fannie Mae, Freddie Mac and FHA account for around 90 percent of all loans being approved. So if you’re looking for a home loan, you’ll need to play by their rules. Buyers may now find themselves trapped in contracts if they are buying in a condominium project that has not been approved or can’t be approved. These days, if you can’t finance a property, the number of prospective buyers will decline, and the property value could tumble. Make sure your condo building is Fannie Mae and FHA approved.
Washington Square has Fannie Mae approval and is an FHA approved condo project.
Has the Homeowners Association (HOA) been formed with a board of directors (at least one of which being a resident)?
There is a certain time that the HOA is formed and turned over to the homeowners of a condominium project. Dues are instated and the developer takes a huge step back in terms of responsibility. Ask when the HOA will be formed (how many sales until it is turned over?). The success of the condominium community is directly related to the caliber of the association. If the association board of directors is functioning properly and has a resident board member to represent the interests of the homeowners, then the entire community will have better chances of functioning correctly in the long term. On the other hand, if the association has not been formed or there are no resident board members, you have no assurance that your interests will be represented and decisions could be made that affect your condo’s market value.
Washington Square’s HOA was formed in August of 2008 and dues commenced as of that date. The HOA currently has one resident board member and the HOA will transition to two resident board members on May 1, 2010.
Have Homeowners Association dues commenced?
With newly constructed condominium projects, the developer has probably set the monthly association dues very low in order to attract buyers. If kept artificially low by the developer too long, you will likely see a significant increase (30-50%) in monthly dues once the assessments actually commence. Don’t be fooled by the gimmick of not having to pay HOA dues currently because the developer hasn’t commenced dues for the project. This is a ticking time bomb which can explode into higher dues down the road or special assessments.
Washington Square commenced association dues in August of 2008.
How do the monthly dues compare with comparable nearby condominium projects?
The answer is important not only to your wallet, but to the resale-ability of your condo. When the association dues are very high compared to the competition, this holds down the market value of condos in that community.
Washington Square has the lowest association dues in downtown Bellevue for comparable high-rise luxury condominium projects. For 2010 association dues are 42 cents per square foot.
Does the condominium project have a replacement reserve study?
A replacement reserve study is a study made of all the major capital systems in the association. Professional engineers evaluate how much life the systems have left and how much they’re likely to cost when they wear out. From that, the association can calculate how much money it should set aside each year to have enough to replace those items when they do wear out. If your condo project does not have a reserve study, your association may not have enough money to replace critical systems when they wear out which can result in special assessments to you as a homeowner.
Washington Square completed a reserve study in August of 2009.
Is the Association’s Replacement Reserve Account adequately funded?
The replacement reserve account is for capital improvements and emergency repairs to your condo building and grounds that may occur over time. Typically developers and some associations do not maintain reserves or inadequately fund the reserve account. Depending on the condo building’s age and anticipated replacements, if reserves are nonexistent or inadequate a large special assessment might be levied on each homeowner when an unexpected cost or repair arises.
Washington Square’s Replacement Reserve Account is funded in conformance with the standards suggested by the Federal Housing Administration. Since the Replacement Reserve Account is increased monthly, please ask your sales executive for a current balance.
Does the HOA have functioning chartered committees?
Chartered committees are the internal volunteers who enforce the rules and regulations and other community enhancement programs. Having committees formed with able bodies is a strong indication of a well run association.
Washington Square has three chartered committees: Architectural, Rules Violation, and Community Enrichment. These committees help support the Board of Directors in ensuring a smoothly operated association to protect property values at Washington Square.
Are there any liens against the project?
A mechanic’s lien is a mechanism that allows contractors to have a lien against your condo building when they’ve performed construction-type services on the property. It’s a powerful tool because many lenders refuse to lend on projects with liens attached to them. They’ll require the lien be paid before any new loan may close. Thus, a lien can affect your ability to close on your condo or sell it in the future. On new construction, you can even be joined to a law suit to foreclose the lien, regardless of whether you personally did anything wrong. Always make sure all liens have been removed from your condo building before buying your condo.
Washington Square has no mechanics liens against the property.
When is the construction loan due for the project?
This is an important question to ask the sales representative of any new condominium project. Construction loans are taken out by the developer to construct the condominium project and typically are due shortly after construction is completed. If the developer is unable to pay off the construction loan when due, the lender can foreclose the condo project. This will not affect your individual condo as it is released from the construction loan when you close escrow, but any unsold condos in the building will become owned by the bank, which can result in a “fire sale” of all unsold condos. This can reduce the value of your condo significantly.
Washington Square’s construction loan is not due until the end of 2011 and is estimated to be repaid in full mid-year 2010.
Are the residential units each separately submetered for utilities?
With submetering, utility costs are distributed on the basis of actual usage as measured by a submeter that is installed in each condo unit. Utility submetering benefits the resident and the environment: Residents benefit because submetering gives them more control over their total housing costs because they are directly responsible for their own usage, not misuse by others. Because utility submetering results in significant reductions in utility usage, the environment benefits through water and energy resource conservation. Don’t pay for your neighbor’s long showers, make sure your condo unit is submetered.
All Washington Square residences are submetered for water, gas, and electricity consumption.
Is the condominium complex professionally managed?
Except for very small condo associations (6 condos or less), every condo association needs a professional property manager. You should be wary of buying a condo in a complex that is self-managed, often by the homeowners living in the property. Running a condo association is too large of a job for volunteer residents.
Washington Square is professionally managed by CWD Group, which manages over 100 condo associations in the greater Northwest. Learn more about CWD Group at www.cwdgroup.com.
Do any investors control large blocks of units?
When sales are slow at a condominium project or developers find themselves in financial trouble, large blocks of condos are sometimes sold to one single investor. Selling condos in bulk brings cash in quickly for developers, but investors interested in bulk purchases insist on steep discounts (30-50%) from the prices buyers of single units would be expected to pay. Further once the investor owns the block of condos, he/she will typically either rent them for the time being or sell them. Either way, an investor bulk purchase of condos can significantly reduce the value of your condo unit. Also, lenders will be more reluctant to lend in a condo complex with bulk blocks of condos owned by one single investor.
No bulk sales of condos to a single investor have occurred at Washington Square.
Is there guest parking, and if so what are the conditions of use?
Developers typically overlook providing enough parking for condo complex residents, let alone their guests. This may not seem like a big issue, but as a condo buyer you will have family and guests visit you and having accessible guest parking onsite will make life easier for you and your guests.
Washington Square has a spacious underground parking garage located onsite for your guests. There is also surface level guest parking available on our access drive and near the entry to the residential garage. Needless to say Washington Square has plenty of available parking for you and your guests.
Is there a warranty for my condo and how are warranty requests resolved?
Typically there are a number of different warranties that come with the purchase of your condo unit. State mandated, developer, appliance warranties and others. It is important for you to find out what warranties come with your condo purchase. You will also want to know how the warranty requests are handled. Some condo complexes boast a warranty, but do little to expeditiously resolve warranty requests once they actually occur.
Washington Square has partnered with Homeworx Northwest to run our 24/7 Warranty Resolve Program. Whether it is 2:00am or Thanksgiving Day, you will have a live person to speak with to log your warranty request. In addition, Washington Square retains on onsite warranty team to resolve your warranty requests expeditiously.
Are there any homeowners that would be willing to share their experience thus far?
People love to talk about things they are proud of. Even more so when it was a good deal, or great service was rendered. You should ask if you can speak or correspond with someone who purchased in the condo project to understand their experience living there thus far.
With over 200 closed homeowners at Washington Square, we are more than happy to refer you to current homeowners who you can speak with about their experience living at Washington Square. Please feel free to ask one of our sales executives for homeowner references.
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