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Buying Tip

Every new condo development will have its own sales staff. These people are often friendly, helpful and very knowledgeable about the new condominium. However, these folks work to sell this property only. The on-site staff of a new condominium knows the property as-well-as or better than anyone around and they are there to assist you but they work for the builder.

When in the market for a new condo, it's a good idea to employ a condo expert such as Will Nesbitt of Condo Alexandria to protect your interests. A condominium agent knows the entire area, not just one property. An expert knows the pitfalls and benefits of buying new, and best of all it won't cost you one dime more than if you use the onsite staff. You have a right to representation: exercise that right today!

Condominium Association Reserve Funds

If you buy a condo, you will pay a condo fee. The condo fee is usually a monthly fee that pays for common expenses such as certain utilities, maintenance and upkeep. Your community's condo board will allocate resources from the budget to pay for the expenses that will arise. In addition, they will set a certain portion of that money aside in a "reserve fund".

The reserve funds are moneys set aside for long term expenses and emergencies. Reserve funds are designed avoid the dreaded "special assessement" that poorly managed condo might incur.  A perfect example of an item that might be paid for through the reserve funds is the roof. 

Although a good roof can last thirty years or more, sooner or later the roof will go bad.  Rather than having a "special assessment" to pay for a big expense like this, each year the condo association puts money in reserves to save up for the roof.  In this way, when the roof is ready to be replaced, the money to pay for the roof is in "reserve funds".

Thus, all buildings (old or new) need a reserve fund and need space in the budget for a reserve fund. The amount that is needed in the reserve fund will vary from condo to condo depending how old or new the building is. A low reserve fund is not necessarily a sign that an association is financially shaky. 

For example a brand new condo might not have much in the way of reserves. Or a condo that just completed major repairs may have spent their reserves wisely. Still, it is important to inquire about the reserves of a given condominium association when you are buying a condo.