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Updated: Monday, May 25, 2015

Documents Required Before You Purchase A Condominium

Question. I plan to purchase a condominium apartment within the next month or so. I am a cautious and nervous first-time home buyer, and would like to start planning now. I will probably buy from an owner and not a new unit from a builder. I am concerned about a number of issues. Are there any lawsuits pending against the Association? Are the reserves adequate to pay for any emergency or long-range repairs or replacements? How can I guarantee that my condominium fee will not be increased dramatically in the years to come? In general, how can I best protect myself?

Answer. The purchase you are considering is referred to in the trade as a "resale condominium." To my knowledge, every state has legislation dealing with buying a condominium -- whether new from a developer or from a current owner.

When you purchase a condominium unit from the developer, you will be given a large book, called a Public Offering Statement. This contains all of the legal documents, a copy of the proposed sales contract, a proposed budget, and information about warranties.

When you purchase a resale, you are entitled to receive what is known as a "resale package" or resale certificate. The material contained in this document should give you some -- but not all -- of the answers to many of your questions.

When you purchase a condominium -- whether a new one from a developer or a resale -- you should carefully review at least the following documents:

The Condominium instruments. These include the Declaration, the Bylaws, the Plats and Plans, and the Rules and Regulations. If your Condominium Association is incorporated, you should also obtain and review the Articles of Incorporation. These documents will spell out the operating procedures under which the Condominium functions. One of the most important aspects of condominium living deals with "use restrictions." For example, can you rent your unit, and if so for how long? Can you have pets? If there are amenities -- such as a tennis court or a tot lot -- are these included in your condominium fee, or do you have to pay extra?

The Condominium Bylaws will also advise you whether there are any architectural control requirements which have to be met if, for example, you want to make external changes to your unit. In many community associations, architectural controls are spelled out in the Association documents, and they must be followed by all unit owners.

A statement of the monthly condominium fee allocated to your unit. At the end of the Condominium Declaration, there should be an Exhibit listing the percentage interest for every unit in the building. The simplistic way of determining your monthly condominium fee is to multiply your percentage interest in the Association times the total budget, and that number should be your annual fee. Divide that number by 12 to get your monthly payment. For example, if the total annual budget is 100,000, and you have a five percent interest in the Association, your annual fee will be 5,000, and your monthly fee will be 416.66. It is important to find out whether utility charges are included in the monthly fee. Often, purchasers are of the mistaken belief that the monthly condo fee includes heat, electricity and gas, and then are clearly distressed when they find out otherwise.

You also want to make sure that the seller of your unit is not delinquent in his or her condominium fees, since outstanding fees are generally a lien on the property. However, the title attorney conducting your settlement should make sure that all of these outstanding obligations are paid off at settlement. If you purchase in the middle of the month, you will have to prorate the monthly condominium fee between the buyer and seller.

The current budget. This is a very important document, and you should review it carefully. If you do not understand accounting, make sure that someone knowledgeable assists you.

This document should list the actual yearly budget, on a line by line basis, and show how the budget is being followed on a month to month breakdown. For example, if the Condominium Association has budgeted 15,000 per year for the water bill, and at the end of March they have already spent 10,000, something is drastically wrong, and the budget planners obviously made a mistake. Keep in mind that these planners are unit owners just like yourself; although they are often guided by professional managers, mistakes can -- and do -- happen.

Furthermore, the budget -- or perhaps the annual auditors report -- should include the amount of money that the Condominium has in reserves. There really is no magic formula to assist you in determining how much money an association should keep in its reserve account. Obviously, if the Association has not made any capital expenditures nor improvements in a number of years and the reserves are low, you may want to consider finding another building in which to buy. You must obtain a current status of reserves; do not >

The proposed budget. Every year, a condominium association -- usually through its management company -- assists the Board of Directors in preparing a proposed budget. It is this proposed budget on which your condominium fees will be calculated for the next year. Again, this should be carefully and methodically reviewed.

No one can guarantee that the condominium fees will stay the same. If you were to buy a single family house, your real estate taxes, utility bills, or other maintenance costs may fluctuate on a year to year basis. The same is true in a community association. You may want to talk to the seller and try to convince him or her to guarantee the level of condominium fees for a period of years, but obviously all of this requires negotiation between buyer and seller. If the seller agrees, it must be made part of your purchase contract.

Furthermore, you want to make sure that there are no special assessments pending against the unit. If there are, the payment of these outstanding assessments is something that should be negotiated between the parties. Perhaps your seller will be able to assist you by paying all -- or at least a portion -- of any such special assessment. Presumably, the resale certificate that you get should disclose any outstanding assessments. That certificate should also disclose the existence of any pending lawsuits.

In addition to looking at the various documents, I strongly recommend that if the Condominium Association has a management company, you contact the property site manager to discuss the condition of the building. You may also want to visit the complex on a Saturday or Sunday, introduce yourself to people who walk in, and also discuss any concerns they may have as unit owners.

Buying a condominium is not for everyone. I have often written that it is democracy at its best and at its worst. However, if you are so inclined, you must do your homework -- before you sign a contract.

The laws most states give you the right to terminate your sales contract within a set period of time based on your review of the resale package -- often three to five days. It is your responsibility to obtain that package, review the documents carefully, and then make your decision based on all of these factors.

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Three Ways to Invest In a Home and Not Get Hurt

Buy low, sell high. Thats the investors maxim that never fails. The trick is in knowing when to buy and when to sell. Investing in a home is never as easy or as quick to deliver returns as you may wish. We all want to ride the boom and avoid the crash. Here are three ways to buy a home safely.

Dont try to time the market

Some homebuyers believe that waiting for prices or interest rates to go lower is the way to buy a home. But there are two things wrong with that approach.

First, what is the market going to do? Unless you have a crystal ball, its hard to know. Between 2006 and 2011, home prices fell an annualized 7.7 a year, or 27, according to Fiserv Case/Shiller. Since 2011 and 2014, theyve gained back that much and more on an annual basis.

Mortgage interest rates follow the U.S. Treasury yields. A quarter point rise in interest rates will cost you roughly 25 more per month. Lock in an interest rate with your lender and dont second-guess yourself. Youll have more peace of mind as well as a stronger negotiating position with the seller.

Buy within your means

Irresponsible lending led to one of the biggest recessions in modern history. Many homeowners lost their homes. You dont want to join them by buying a home thats bigger, more luxurious or pricier than you can reasonably afford.

Lenders are facing heavy government penalties for lending to unqualified borrowers, so theyre insisting that lending standards return to historically safe and sustainable parameters.

That means you wont be able to pay half your income toward housing which was common during the housing boom. Today, youll pay approximately no more than a quarter to a third of your gross monthly income for a home.

As your income improves, your home becomes even more affordable, allowing you to meet other life goals, such as adding new members to your family or starting a business of your own.

Buy long term

The longer you own your home, the more equity you build. Equity is the percent of ownership you have in the home. Think of equity as money youll get back when its time to sell.

To protect your equity, reinvest in your home to keep it in top condition. Then when its time to sell, your home will be more appealing to buyers and sell for more money than similar homes that arent as updated or attractive.

If you buy a new home every few years, youll throw away thousands in moving and closing costs. Its far better to hold on to your first home for as long as you can. At some point, you can turn it into a rental property that produces income for you.

Choose the best home you can for the money and it will return the favor.

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How To Know If You Should Stay Or You Should Go

Should you stay or should you go? Its the premise of the popular HGTV program "Love it or List it" and also a dilemma for countless homeowners today.

Many of us can >


Your mortgage is close to paid off. Youre almost done with monthly payments and about to own your home outright. Buying a new home would mean taking on a new 15- or 30-year mortgage, or coming up with a hunk of cash. Unless the house you are moving to is a far better fit for your life>

You credit stinks. If youre not going to qualify for a new loan because of bad credit or if you may qualify by the skin of your teethwhich would mean putting more money down and/or paying a higher interest rateit might not be worth it to move.

"Depending on when you last bought a home, getting a mortgage may be harder than you remember," said FrontDoor. "Lenders will closely review your income, debts, assets and liabilities, to make sure you dont exceed the maximum debt-to-income ratio. Hopefully you didnt do any damage to your credit since your last home purchase. The most competitive interest rates only go to buyers with credit scores above 700."

You have money to renovate. Your kitchen is an embarrassment, the yard you once imagined as an outdoor oasis is more like a mirage and dont even ask about that weird rippling thing that going on with your floors. Maybe you dont need a new house. You just need the house you live in to be new again.

Depending on how much savings your have or how much equity you can take out of your house, you could overhaul and reenergize your existing home. Even small changes that improve function or address important daily issues can make a big difference. Be sure to consult your Realtor for guidance on the changes you plan to make. That way you can ensure a decent return on investment so you can recoup some dollars when you are ready to sell.

You need to stay in your neighborhood and theres no inventory in your price range. The tighter your parameters, the harder it can be to find the right home. If you need to be in a certain school district and cant find a home in the right district zone perhaps it makes sense to put off the move.


The kids are gone. Its been a great family home, but, memories aside, do you still need all that space?

"Do you find yourself walking into empty rooms wondering when the last time you vacuumed in there was? Having trouble deciding whether to convert your childrens old bedrooms into the sewing room, home office or media room? You have too much house," said REALTOR and best-selling author Michael Corbett on Huffington Post. "Once the kids have left for college, Mom and Dad are left with an empty nest. Downsizing to a smaller home could be your reason to sell now."

You can cash out, and cash in. All that equity you have in your house can be rolled into a new loan on a larger, more updated home. And the interest rate might even be lower than what you are currently paying.

It would take the operating budget of a small country and the patience of 12 saints to get your house where you need it to be. "That orange countertop that seemed so retro and modern just looks like an old countertop in a bad color. The shower needs to be re-done and the floors have gotten so bad even the dog doesnt want to come inside," said She Knows.

"So then you start to dream about remodeling. And you probably get so caught up in the end result that you start to think this is actually a viable option. Its not. Its months of living in disorganized, sheetrock-dust covered filth and eating cardboard pizzas. Just save your money, your marriage and your sanity, and move into a new house already."

The neighborhood is changing. It was perfect when you moved in. Friendly neighbors, block parties, lemonade stands. But now you find yourself looking over your shoulder on your evening walk and double-checking your door locks before bed.

"Are you up all night from the neighbors barking dogs? Are you noticing a spike in crime or even more police activity as of late? A neighborhood moving in the wrong direction can be a very compelling argument for a sell and a move," said Huffington Post.

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Your Rights Shopping For A Mortgage Loan

When you shop for a mortgage loan, you have certain rights that are guaranteed by The Real Estate Settlement Procedures Act RESPA. RESPA is a consumer protection statute from the Department of Housing and Urban Development HUD.

RESPA is designed to help you be a better shopper during the home buying process. Knowing your rights before you enter into any loan agreement will help you get the best loan possible. You have the right to:

Shop for the best loan for you and compare the charges of different mortgage brokers and lenders.

Be informed about the total cost of your loan including the interest rate, points and other fees.

Ask for a Good Faith Estimate of all loan and settlement charges before you agree to the loan and pay any fees.

Know what fees are not refundable if you decide to cancel the loan agreement.

Ask your mortgage broker to explain exactly what the mortgage broker will do for you.

Know how much the mortgage broker is getting paid by you and the lender for your loan.

Ask questions about charges and loan terms that you do not understand.

A credit decision that is not based on your race, color, >

Know the reason if your loan was turned down.

Ask for the HUD settlement cost booklet "Shopping for Your Home Loan".

Lenders offer different mortgage products depending on your credit scores, income-to-debt ratio, payment histories, how much you want to borrow and the term of the loan.

Ask your lender to show you the advantages and disadvantages of each loan product so you can choose the best one to suit your needs. When you make your choice, be sure to compare the same product with the same product offered by at least two other lenders.

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Bathroom Remodels On A Budget of 1,000 or 10,000

Remodeling the bathroom is one of the best investments you can make as a homeowner -- whether youre planning to live in your home for ten years or sell it within the next five. In fact, improving the atmosphere and functionality of the bathroom offers a huge benefit, especially if youre starting with a cramped or outdated space. The biggest question, of course, is: How much budget do you have for your remodel? Not everyone can spend tens of thousands of dollars on a bathroom remodel.

So here are some projects that will improve your bathroom, whether you have a budget of 1,000 or 10,000:


A budget that caps at 1,000 doesnt give you a lot of room to hire professionals. Youre going to have to do most of the work yourself -- except when it comes to plumbing and electrical work. Thats best left to the professionals, and letting them handle it will save you money and hassle in the long run anyhow. Focus on the smaller DIY improvements that will revitalize and renew the bathrooms appearance. Some projects to consider are:

Repainting the walls: If your bathroom walls are looking particularly drab, then adding a fresh coat of paint could do a lot for the room. Choose a shade that brings it into the 21st century and creates a welcoming, >

New tiling: Think about the tile in your bathroom, maybe the wall behind your bathtub or on the floor. If its cracked or outdated, now might be a good time to replace it. Vinyl and ceramic tile is quite affordable -- costing anywhere between 2 and 5 per square foot, depending on the design. Generally, youll pay around 400 for 200 square feet of tile. Plus, youll have to lay it yourself. In comparison, professional tile installation averages around 900 to 2,100 -- way outside your budget.

Transitional Bathroom by Temac Development, Inc. in Chandler, AZ

Additional storage: Depending on the size of your bathroom, you might want to look at how you can optimize storage. Think about a new medicine cabinet, baskets or a standing shelf if your bathroom has the room. You could spend anywhere between 100 and 200 on storage depending on which kind you decide to install.

Regrouting: To make your bathtub or shower look fresher and cleaner, regrout the tile. Scrub with a brush and a bleach solution. If you cant get the debris off, think about removing the grout and reapplying a new layer. The cost of grout is about 20.

New exhaust fan: The exhaust fan in your bathroom helps prevent mildew and mold growth. If the exhaust fan is worn down and not running properly anymore, its time to replace it. The cost of a new bath fan averages at about 100, but its a worthwhile investment to avoid mildew growth.

Green showerhead: How much money are you paying for water right now? Do you like long, luxurious showers? To avoid cutting down your time in the hot water, think about replacing your showerhead with its green alternative. Low-flow showerheads can cost as little as 50 and are easy to install. Plus, you can still get high water pressure.

New faucet: Another investment you can make in your bathroom is to replace your faucet. A new faucet can really change the look of your sink and cut down costs on your water bill as well, depending on which one you choose. Most faucets cost about 50 to start, though the best types will cost upwards of 100. If you want an efficient faucet, keep an eye out for the Watersense logo.


When you have a more sizeable budget, you dont have to >

Granite countertops: Granite countertops have always been a popular investment for kitchens and bathrooms. However, they can cost a lot of money -- about 3,100. So to save a few dollars, choose granite that has imperfections or countertops in neutral colors.

New accessories: Little accessories can make a big impact. Maybe its the overhead lighting, towel racks or drawer handles in the vanity. While these seem insignificant, together they can drastically increase the appeal and atmosphere of the bathroom. Do not replace your lighting fixtures on your own, but changing out bulbs with their LED or CFL alternatives is okay -- and it cuts down on your electricity costs.

Contemporary Bathroom by TBT Services, LLC

Refinishing fixtures: While you might think about replacing one or two of your bathroom fixtures, you shouldnt try to replace all of them. Instead, think about refinishing some of your fixtures like the sink, shower and bathtub. If theyre made of cast iron, porcelain or fiberglass, this is a cheap investment with great results. Your fixtures will look almost brand new for a fraction of the cost to replace them. For example, the cost to refinish a bathtub is 300 on the low end and 1,000 on the high end, as compared to replacing it for 2,200 on average.

More green updates: There are a lot of green updates you can make around the bathroom to save money on your utility bill. As reiterated before, CFL and LED lighting helps, as do low-flow showerheads and Watersense faucets. In addition, you can invest in dual-flush or no-flush waterless toilets, also under the Watersense label.


Bathroom remodeling doesnt have to be an expensive investment. Despite your budget, there are always ways to save and still end up with a new, revitalized space. If you dont have the budget to do what you want in the bathroom, you can at least make a few adjustments until youre ready to gut the space for more major changes.

Andrea Davis is the editor for HomeAdvisor, which helps homeowners find home improvement professionals in their area at no charge to ensure the best service in the shortest amount of time.

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Six Ways To Make Lighting The Star Of Your Home

You can swap out your couch, get a new dining room table, paint your walls a new color, change up the furniture placement, but if you dont have the right lighting, the space still might not feel pulled together.

"The lighting in a home changes the mood of a room just as it does the perceived size of a room," said SFGATE. The elements that come together when the right lighting is achieved transform a room into a seamless combination of functionality and >

1. Lighting plans

Key to quality lighting design is having a "layered" plan with different types of lighting serving different purposes.

"The concept of layering light is particularly important in the living/family room, an area of the house where people tend to gather for long stretches of time and engage in an array of activities, including conversation, watching TV, reading, playing board games and using a laptop," said HGTV.

Their recommendations include:

"Ambient lighting that bounces off the ceiling

Task lighting from table lamps

Accent lighting that focuses on a particular architectural element in the room

Once you know how to use lighting to maximize the potential of your home, the fun part begins: adding in the pretty stuff. Here are the trends youll want to follow.

Contemporary Pendant Lighting

2. Pendants

There is perhaps no greater lighting trend right now than pendants, with a combination of versatility, functionality, and beauty that inspires designers and homeowners.

"Pendant lighting is a hot item at the moment," said Decorators Wisdom. "Some in-demand pendant lighting draws inspiration from the past, while other >

Louis Lighting extols the virtue of glass pendants, which can "transcend several dcor >

Pendants are also being used in all new places and in new ways, added 1000 Bulbs. "Whether youre browsing Pinterest online or walking around home dcor stores like IKEA, its hard not to notice the sweeping popularity of pendant lights," they said. "Lately, these versatile light fixtures are appearing in more areas than just their traditional places over kitchen islands or countertops, debuting above front entryways, dining room tables, night stands, and bathroom vanities among other places. But the fixture itself is not the only new trendthe way pendant lighting is being installed is also new, as clusters of pendants are often grouped together to create one, dramatic overhead light fixture, or multiple pendants are hung spread out at varying heights."

3. Industrial

The industrial chic look has legs, and adding a light fixture in this >

See some great examples of industrial lighting here.

4. Antique bulbs

A growing trend tied into the industrial look is antique light bulbs. While more expensive than traditional bulbs, they bring a unique touch to your fixtures.

"You may have already noticed the beautiful winding filaments of antique light bulbs glowing in the dining area of your favorite restaurant or in the lobby of a luxury hotel. But antique light bulbs are actually making a comeback in both retro and industrial >

Looking for a way to get "the look and feel of >

5. LED

Speaking of LED, its another hot lighting trend that is growing fast as consumers seek out ways to cut both their energy bill and their carbon footprint.

"LED lighting is here to stay," said Louie Lighting. "Significantly, LED lighting is both practical and affordable as compared to other alternatives. The demand for LED lighting, particularly in the kitchen and bathroom has grown exponentially according to residential architects. Costs for customers are also going steadily downward as their use becomes more ubiquitous."

6. Lighting in drawers and cabinets

Call it the evolution of under-cabinet lighting. Accent lighting in cabinets not only helps brighten up dark spaces, but also helps showcase collectiblesa key complement to the glass-front cabinet trend. Get some ideas on how to add LED lighting to drawers here.

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5 Easy Ways To Add Character To Your Home

If youre buying a newer home, or one that was built in the last 50 or so years, it may be lacking the charm youre looking for. Thankfully, there are ways to add charm into your home that will give you the function - and the form - you want.

"With little time and little money, you can add lots of charm all around the house," said HGTV.

Heres how.

1. Moldings

Crown molding is among the easiest ways to bring some character and architectural interest into your home, and its inexpensive, especially if you do it yourself. But if the idea of mitering corners is making you hyperventilate, a handyman can quickly transform your blah space into something beautiful.

Houzz doesnt stop at crown molding. They recommend transforming all the trim in your house.

"When it comes to architecture, details count. They also define," they said. "The places where floors, doors, ceilings and windows meet the walls are usually accompanied by trim. The way that trim is executed has refined and defined our houses throughout history. Trim adds character and flavor to a home, the way pearl buttons finish off a shirt or cinnamon completes a coffee cake. And it helps distinguish one >

See Houzz for detailed examinations of how to add Victorian, Colonial, Georgian, Craftsman, or Contemporary trim to your home.

2. Cabinetry that looks built-in

Those charming built-ins you see in old Craftsman homesyou know, the ones that flank an old fireplace or create a great hutch in the dining roomare lovely. Although it would be hard to find a home built nearly 100 years ago with perfectcondition built-ins. You know what would be easier? Creating your own built-in-looking cabinetry. Its not as hard as it sounds, and it doesnt have to cost much either.

"Its still possible to add character, charm, and storage space into our homes without hiring a carpenter or moving into a historic home," said Infarrantly Creative. "In fact, getting a few built-ins of your own is as easy as getting creative with inexpensive shelving from a big-box store."

This library wall was created by Centsational Girl using four IKEA BILLY bookcases and some trim molding.

Centsational Girl

See Infarrantly Creative for more ideas.

3. Lighting

You may be able to find charming period lighting if you scour second-hand stores, antique shops, or flea markets. Or, you can pick up a reproduction piece and instantly transform a space.

PW Vintage Lighting

4. Cozy reading nook

Is there anything more charming, really, than an inspiring space to curl up with a book?

"Give an awkward area a purpose and appeal. Transform a basic bay or boxy window into a reading nook," said Better Homes and Gardens.

This can be easily achieved by building a platform or with in-stock cabinets from Lowes and a DIY cushion. See some great ideas here.

Newlyweds in New York

5. Think Hardware

"Reinvent your entry or interior doors with antiqued brass, crystal, porcelain, or colored-glass doorknobs," said Better Homes and Gardens. The same can be done with hardware in your kitchen and bathroom to bring in a vintage or retro touch.

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Updated: Monday, May 25, 2015

Your Rights Shopping For A Mortgage Loan

When you shop for a mortgage loan, you have certain rights that are guaranteed by The Real E...
> Full Story

Bathroom Remodels On A Budget of 1,000 or 10,000

Remodeling the bathroom is one of the best investments you can make as a homeowner -- whethe...
> Full Story

Six Ways To Make Lighting The Star Of Your Home

You can swap out your couch, get a new dining room table, paint your walls a new color, chan...
> Full Story

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