5 Things to Know Before You Buy an Ocean City, MD Condo
Owning a beach-home in Ocean City should be a fun, exciting and stress-free experience. What can you do to help make sure your next beach-home or condo remains a stress-free place for you and your family, for years to come?
After all, nobody wants to buy a property that comes riddled with unplanned expenses, rules that don’t suit your needs or any number of other unwanted surprises.
Follow these 5 simple steps to Buying A Beach Home In Ocean City Md, and you’ll be well on your way to enjoying a new home at the beach!
1. Know Your HOA's Rules (especially in a condo).
When you’re buying a condo at the beach, you’re buying a lot more than just the condo itself. You’re buying a property that might come with amenities, parking, and maybe even a pool. And almost assuredly, that property will have ‘shared costs’, which are reflected in your HOA (or Condo) fees.
Wouldn’t it be nice if you knew EVERYTHING about the Association BEFORE you purchased?
The truth is… YOU CAN!
Maryland Condo Law requires that before anyone purchases a property that's a part of any Association (condo, or other), the buyers have an opportunity to review all relevant information about the Association. This includes, all the Rules and Regulations, the ByLaws, Proof of Insurance, an Association signed Resale Certificate, Reserve Studies, Budgets, and all other relevant information from the Association.
A buyer has either 5 or 7 days (depending on whether the property is new or a resale) to fully review all of these documents. During this review period the buyers contract is ‘contingent’ and their deposit is protected. If a buyer doesn’t like anything in the Association provided packet, the buyer has the right to back out, and to receive a full refund of their deposit. No questions asked!
This review period is VERY important for a buyer to pay attention. These documents will likely show up as part of a big (and often overwhelming) packet of papers. Don’t let your eyes glaze over… and do NOT skip this important step. Read through these documents. Ask questions! And most importantly, make sure you’re working with a great local Realtor who knows what to look for, and where the common red-flags are!
Other than a home inspection (if you choose to do one), this is the most important period before reaching settlement. You want to make sure that there won't be any surprises after you purchase.
Tip #1: When you receive all of the condo docs for your new beach property, take the time and read through EVERYTHING, and ask questions!!! And make sure you’re working with an awesome local OCMD Realtor !
2. Understand Your Associations Financials
Since we focused so heavily on the ‘broad’ recommendation of reviewing all your HOA (or Condo) docs before purchasing in Tip #1 above. Now we want to make sure we take the time to highlight the next most important step….. Reviewing the Association financials!
More than any time before, it’s really important you pay attention to this topic, reviewing the condo budget and financials BEFORE you purchase!
If you weren't already aware, Maryland passed a bill that says every condo association must have a reserve study completed to make sure they have enough money to cover future expenses for things such as roof replacement, balcony repair, elevator repair, etc.
*These items, if deemed necessary in the immediate future, can be very costly and can sometimes result in dramatic increases to condo-fees, or even substantial special assessments!
During your condo document review period, make sure that your current condo fees align with the recommendations that are highlighted in the Reserve Study, ensuring there are enough funds to cover future expenses.
If you don’t understand, or if you’re uncertain about what you’re looking at. ASK QUESTIONS!
There are a lot of associations that pride themselves on having "low condo fees." Unfortunately, more often than not, low condo fees can often lead to high special assessments later (if not properly planned for).
Stop and think about it…… When the Association roof needs to be replaced, the “low condo fees” mean the association might not have the reserves available to pay for the new roof! The result? A probable special assessment!
Tip #2: Not all Associations with low fees are good, or bad. Not all Associations with high fees are good or bad. It all boils down to how well they’ve planned in the past, and how we’ll they’re planning for the future. And your job, as the Buyer is to make sure you check on this!
To learn more about Maryland house bill 107, watch this YouTube Video!
3. Know Why You're Buying A Beach House
This is one of the most important questions to ask yourself!
What purpose will this beach house serve? When you’re at the beach, what do you love to do, and will this beach house help accomplish that? Do you plan on using it as a quick, private getaway? Or do you plan on having lots of friends and family visit you? Do you need to be near the ocean, or the bay, or certain attractions or restaurants? Do you need amenities, like pools and game-rooms, or do you prefer a smaller & quieter building?
And most importantly…. Do you plan on using it just for yourself, or do you plan on renting it to help supplement the costs?
The next step after answering these questions is to make sure your local Realtor knows why you’re buying.
Why is this so important?
Because some properties might make a great OC vacation rental, while others might not do quite as well. It will be important to know the difference when you’re shopping.
You might be happy with a condo that saves you $50,000 on the purchase price because it isn't newly updated... but if you're planning on renting, that might be a mistake.
The rental market is oversaturated right now, you need to stand out over the competition.
4. Double Check Ownership Costs
We feel like this one goes without saying, but you want to make you can afford your vacation home STRESS FREE.
We've said this before, and we'll say it again... it's a beach home, it shouldn't cause you stress! When you come to the beach and think about the beach you should be able to RELAX!
Make sure that your local lender has locked in your interest rate, and that you budget for all ownership costs (like utilities, condo fees, property taxes, homeowners insurance, and of course, fun at the beach).
Nobody has ever stressed out or been riddled with anxiety because they came in under-budget on their beach home!
5. Have Realistic Expectations for your Home Inspection
When you're purchasing a beach condo, chances are the inspection is going to bring a couple of things to light that are going to need to be repaired.
When you receive your home inspection report, make sure that you're reasonable with your expectations and anything you request.
The inspection shouldn’t be used as a "New Construction Punchlist", or a "Negotiation tool." This is an informative part of the process to make sure the property you’re buying doesn’t come with any surprises or major deficiencies.
If any surprises or major deficiencies are found, then it’s time to ask for repairs, replacements or credits.
Just remember: It's the Home Inspectors’ job to put every single detail on their report. Almost every home inspection report we see has either cosmetic issues or relatively inexpensive things on the report like an outdated outlet or a leaky faucet. Expect to see those……. Just like you would if an inspector put your home under a microscope.
Tip #5: Get a home inspection! Then be fair, be reasonable, and make sure you find the right place you can enjoy for years to come!
Wrapping It Up
Making the investment to purchase a home for sale in Ocean City, MD is a big decision. Making sure that you've crossed all the T's and dotted all of the I's is a big deal!
When you're purchasing a vacation home, and investment property, or a blend of both, make sure that you're actively planning for the future, understand the association you're purchasing in, and remember that you're buying at the beach... it shouldn't stress you out too much!
Thanks for reading! If you're interested in learning how much your Ocean City, MD property may be worth reach out today! We're happy to answer that or any other OC real estate questions you might have.
Check out our YouTube Channel here!
Looking for the best local company to help rent your beach home? Contact Central Reservations!
Grant Fritschle
Email: grant@grantf.com
Cell: 410-430-5880
Office: 410-524-6400
Jon Barker
Email: jon@markf.com
Cell: 410-935-3810
Office: 410-524-6400
See you at the beach soon!