Condo Budget Analysis

[Ariba]

Scuttlebutt in my condo development is that the HOA is dead broke, but I probalby wouldn't have become aware of this fact--if it's true--if I were conducting an appraisal of my own unit.

So you are saying you have no glue as to what is happening in your own condo development? You do not get an annual budget, newsletter, talk to neighbors? How about the condition of the complex, deferred maintenance, trash pick-up, common ground, pool, etc.

How do/did you answer the question: "compared to other competive projects of similar quality and design, the subject unit charge appear: high, average, low?

Never mind the appraisal.

 

[jay trotta]

see my comment- page 4

I believe in FNMA, it notes the "Lender" is to supply what they have available; they do obtain information from the association themselves, anyone here ever, I mean ever recieved anything pertinent to any property they've ever recieved a request for ?? To this date I have yet to recieve anything but an Order Form.......I can't even get a signed "Sales Contract" from them; and yes those are available and produced during the application process.

Reality; in actuality we are "appraising" the "air rights" of a "unit", from the interior paint out is owned by the association, you cannot take a chain saw to a unit and separate the "common wall", the budget may include potential repairs for water damage of an interior common wall - that budget will be off (I will guarantee it), as the damage is unknown until the walls are open. It just makes me wonder......

 

[timd354]

You're right... the question on the form was placed there just to fill up space.
A client/lender certainly can require this analysis as part of the SOW, but they generally do not. As far as just filling up space in the forms, we can all agree that these forms are often idiotic....why else does the form ask the appraiser to check whether or not he did an analysis of the prior sales history of the subject property? This is obviously a waste of space, since doing such an analysis is required by USPAP.

Looks like I have just prooved beyond any doubt that some things in the form are there to apprently just fill up space....so apparently there are things in the form that are just included to take up space.

Nice try again.

In regard to the information being readilly available, the law in all 50 states requires all association documents be available to the property owner. There is no fee for this access. But one would have to actually ask to receive.

Seeing how the appraiser is not property owner, how exactly does this make the documents available to the appraiser?
Nice try though.

 

[JSmith43]

Some of the posters are essentially taking the position that the analysis should reflect the depth of analysis that a typical informed buyer might perform. That is also my choice.

Maybe a call to an association officer. Perhaps a call to the management company. The question: Anything you think I, a prospective buyer, should know about this place?

Basically, if it is notorious or discoverable via typical due diligence of market participants, I believe most of us agree that we should go that far, if asked to comment by a client rather than assume away possible market preference or rejection based upon budgetary health and/or contingent liabilities or potentially blighting nearby proposed development, etc.

Of course, if the client doesn't care, do USPAP minimum. Just say No comprende, no gotta budget, no need budget, no want to see budget, whatever you think is a professional response:icon_mrgreen:

Sky is the limit for the highly imaginative, that would rather run an art gallery than a business. Most of the time I would put far too much effort in sketches and pretend it was subtle marketing. Heck, it was compulsive behavior, and probably recognized as same, to my detriment.

 

[Frederick]

I think this thread indicates that a comprehensive analysis of the budget and the viability of the condominium is within the skill set of an appraiser which was one of the early questions posed.

This thread also indicates that a comprehensive analysis would require substantial investigation and commentary.

Hopefully, we now have an idea of what it entails and can price it appropriately.

Thanks to everyone who constructively contributed to this thread.

There is a tremendous amount of brain power and experience on this forum. Many times it is as useful as turning on the sprinklers in a thunderstorm. Its great thing when it can be harnessed to teach and learn. Thanks again.

 

[DTB]

I think this thread indicates that a comprehensive analysis of the budget and the viability of the condominium is within the skill set of an appraiser which was one of the early questions posed.

This thread also indicates that a comprehensive analysis would require substantial investigation and commentary.

I have not seen the capability demonstrated at all. I see posters claiming to analyze the budget, but not much more.

Your post #42 does illustrate many of the things required prior to analysis as does Randolph's followup post.

I still would love to see the detailed analysis and commentary which is purpotedly done on a 1073 form of a single unit condominium. Particularly some of the more technical building aspects; fire suppression system, 3-4 laundries, 60 floors of common area...

 

[Don Clark]

Air rights applys to only one type of condo. There are at least 20 other versions where air rights have no meaning.

A condo is a FORM OF OWNERSHIP, NOT AN ARCHETECTURAL STYLE.

You are referring to only one archetectural style of a condominium.

The 1073 does not ask if the lender sent you the condo information. It ask if you have analyzed it.

 

[JSmith43]

There is another thread, originated perhaps a month ago, that debates the depth of analysis of the purchase agreement for a pending sale. There was a split decision on that one as well.

Appraisers are generally, generalists:new_llying: An attorney that wasn't a real estate law specialist might not do such a good job of analyzing a PA in a complex situation compared to a dedicated RE attorney. I say, those of you that want to specialize in analyzing association budgets should go for it.

 

[DTB]

Maybe those that purport to analyze association budgets could fire off Frederick's list of items and request a quote and turn time from a CPA. How many think that quote will come in without a "," in the fee section?

 

[MNRural]

Like title work or an environmental problem, I assume the condo association is typical. I make it clear in my scope of work and assumptions that I have not and will not delve into this matter (just like I dont look into clear title or do any environmental testing).

Let the client hire their own experts.

If there is a problem obvious to the layman or their experts point out a problem, I can change my scope of work and assumptions to consider the economic aspects of the problem (how it affects market value).