The high cost of a single-family home and traffic congestion are two good reasons to consider buying a home in one of the new hi-rise condos popping up in Kakaako, Ala Moana and elsewhere in Honolulu. For some, the ability to walk (i.e. to work, parks, shopping, dining), the condo amenities (e.g. pool, spa, theater, event space) and the services (some at luxury resort standards) are deciding factors.
As a real estate professional, my job is to assist my clients with whatever home is best for them, their family, and their long-term investment goals. Condos can be a great option for many reasons. But it’s important for a buyer to do their homework before committing to any purchase. That homework includes the following:
Anaha at Ward Village
Ask for all the building documents prior to committing…and READ THEM. Yes, they are long and written by lawyers, so they can be confusing. But they include information about the make up of the Board, Board meetings, unit modification restrictions, rental periods, maintenance fees, first year budget, reserve funding, process for special assessments, start-up fees (what they can be used for), and more.
Too often, homeowners learn the hard way! Some are surprised to learn that they can’t modify the interior of their home without Board approval. Or that special assessments are common and homeowners must pay the assessment. If you aren’t sure about a topic, consult with your agent or a real estate attorney.
Waiea at Ward Village
Similar to the Declaration and By-Laws, the House Rules should be read carefully prior to signing a purchase agreement. Not only do you want to look for what you can and can’t do, but consider how the residents will respond to the House Rules. Are they reasonable? Or are they too strict or too flexible? House Rules can get very specific and often come with fines!
Some condo General Managers enforce them diligently, some do not. Do they fit your lifestyle? Too often, first time condo owners are shocked when they buy an expensive condo, but must be quiet after 10pm, not park on the line, register each guest with the front desk, and much more.
Condo living is communal living — not single family! In our last building, a few homeowners argued over the House Rules. In the end, none were happy.
Waiea at Ward Village
Do your homework on the developer, also called the “Sponsor” in the building documents. What is their track record and reputation in Hawaii or elsewhere? Compare how they sold/marketed previous buildings with the building once it opened. Does the sales pitch match the reality?
What do the building docs say about the “Sponsor controlled period,” the time they control the Board? This period can range from months to years! The developer will likely control the Board until most of the homes are sold. Will they increase maintenance fees to ensure service is maximized to sell the remaining units? Will they fully fund the reserves (aka “the rainy-day fund”)?
The Townhomes at the Collection
Perhaps the biggest eye opener for first time condo owners is the infamous punch list. This is the list of defects that you identify in your home during the final walk through. Many developers refuse to fix anything in your home that isn’t included on the initial punch list, so it deserves your personal attention.
I recommend you complete it with at minimum a friend who has construction experience. Better yet, a trained handyman and for bigger investments, a licensed general contractor.
The punch list should include design and installation defects. Sometimes developers designed and sold it one way, and along the way, it could be changed. If it was changed in a material way, you have a claim. But not if it’s not on your punch list! As for installation defects, it’s often subjective. If it doesn’t look right, write it down. And take pictures of all items listed.
Don’t forget your parking stall, storage unit, lanai and anything else considered unit space or a unit limited common element.
Stay on top of the repairs, asking for frequent updates on your punch list completion progress in writing. Some manufacturer and appliance warranties expire after one year, so time is critical. Each item needing a fix can cost you hundreds, if not thousands!
Proposed Central Plaza of Ward Village
Condo or Single-Family Home?
Living in a condo versus a single-family home is a personal decision. Both can provide an incredible or regretful experience. The key is to go in with eyes wide open and with your homework in hand. My husband and I used to live in a great condo in Kakaako. But we opted to return to single family living so we and our dogs could enjoy the privacy and tranquility of a large fenced in yard.
What does your paradise look and feel like? What matters most to you? What additional questions do you need to ask (and answer) to ensure you made the best long-term decision? Let me know if you have any questions or comments. Mahalo!