Question on purchasing a foreclosed condo

**Newbuyer01** · 02-24-2011, 03:19 PM

I am from Chicago and there are many forclosed condos here. I have found several in my price range but the assessment and taxes spook me, thus I shy away from buying those places. A realtor that I worked with said, well get a renter and have him pay everything. Plus, he suggested that I look at all the amenities that the assessment includes. I get that, but my scare is that if this condo has high assessment and or taxes right now, the cost would eventually continue to rise in the future, making this condo hard to sell, i.e, less competitive price wise. The assessments are high due to services offered and not because the association is not solvent. It just doesn't make financial sense to me. Is it really true that if a building offers sensible amenities and hence has high assessment due to this... is that property worth buying? I am worried about not beinmg able to sell in the future. This particular one has $390 monthly assessment for a one bedroom with $1500 in taxes. Please help!!

**Greg** · 02-25-2011, 06:57 AM

If other condos in the development are selling then your fears are unfounded. Do some research and see how sales are going.

One thing most people overlook in condo assessments is the insurance. The HOA is paying for the insurance policy that private home owners pay themselves. Subtract out the insurance amount before you analyse the HOA costs.

**clemy** · 02-25-2011, 02:08 PM

I just want to point out that the insurance the HOA has is only on the building not on the condo or its contents. You might save a little by not covering the building shell, but anything from the perimeter walls of the condo inward is the responsibility of the condo owner.

**flash.investing** · 03-01-2011, 05:34 AM

Take a harder look at what the HOA fees include - you may find that it's not so bad taking everything into consideration. They probably include water / sewage, garbage removal, etc. - things you would probably have to pay for with any property. You said the taxes are $1500. Is that quarterly, annually or monthly? Break the fees down more before you get spooked.
Good Luck!