Philadelphia Real Estate Blog

Here are a few condo reserve questions I often get asked:

1) How much money does a certain condo association have in its kitty?
You really are not going to know the answer to that question until you purchase the condo and review the condo docs. The state of Pennsylvania allows for a five-day review of condo docs for you to make an informed decision. Some buildings stockpile a boatload of $$ – and others simply just assess when needed. I usually find that the very small buildings and the very expensive/exclusive buildings in town don’t keep that much $$ on hand- their way of making improvements is to simply assess owners when needed.

2) How much in reserves is required by Fannie Mae for the building to be “warrantable?”
Although there is no set amount (for the ability of buyers who want to buy in a particular building), it is probably a good idea to be setting 10-15% aside every month for capital improvements.

3) What are capital expenditures?
Reserves for deferred maintenance (performed less frequently than yearly in order to maintain the asset’s useful life) and capital expenditures (purchasing or replacing assets that have a useful life over one year) are required for certain building components unless the board votes annually to waive and/or reduce reserve funding.

4) WTF is a capital contribution???
Buyer pays two months worth of condo fees into the ASSOCIATION- this does not go to the seller and this helps to build the kitty for future improvements. You do not get this payment back when you sell the condo and it is not a pre-payment of condo fees.  This contribution is now applicable for almost ALL condo sales in town.

5) How much should my Philly condo association have in reserves?
This really is a function of the board’s goals and the current condition of the entire parcel including the roof, windows, elevators, etc. Most folks I speak with suggest 10% -15% of the TOTAL annual intake of condo fees to help build the kitty. A professional reserve study may be in order to best guide an association.

Email me for details and I may be able to help with this. 🙂

Mark Wade 
www.CenterCityCondos.com | BHHS Fox & Roach Realtors
530 Walnut St. #480 | Philadelphia, PA 19106
Mark@CenterCity.com | 215.521.1523

Construction of Phase One of Philadelphia’s exciting new Rail Park is quickly progressing! This 1/4 mile section of the Park is a wonderful addition to the Loft District. Much like the addition of the Schuylkill River Trail, Philadelphians will no doubt make great use of this new outdoor space. It will be a great place for engaging programs featuring arts, education, culture, health, and wellness.  This is a wonderful way to get city dwellers out into green spaces!

Photo Courtesy of TheRailPark.org

Phase One will run from 11th and Callowhill to Broad and Noble Streets and will have gathering places, seating, swings, and amazing skyline views!  Learn more about The Loft District Neighborhood here.

Did your addiction start back in the late 1980’s with the Sunday morning infomercials like “Fox and Lazo’s Parade of Homes”?
 
Do you search sites like www.Trulia.com and www.Zillow.com, just to see what is on the market in your area? Has your need compelled you to chat about Philadelphia real estate at cocktail parties, and intimate gatherings? And do you usually look through the real estate section of the Sunday paper…like, every Sunday? I thought so.

    
My particular need for R.E. (real estate) was first exposed to all at the age of 19. I used to sit down with a red pen, and circle properties in the weekend paper that I thought our family might drive past, after seeing those on the aforementioned Parade of Homes. Anyway, I am a realtor now for the past 21 years here in downtown Philadelphia. I know your type. You notice every “for sale” sign in your neighborhood. Akin to there being a metal plate in your head that pings whenever you drive past a “for sale” sign you have also probably spoken to or emailed a Philly realtor to get some more info on a home that you planned on neither buying nor selling. And Open Houses? Forget…you have been to them all, and you usually make a B-Line for the photos on the walls of those homes.
    
Go ahead, admit it. You are a Real Estate Junkie. Start with the phrase, “My name is _______________, and I am a real estate junkie. You will feel much better in no time.

Mark Wade
www.CenterCityCondos.com
Prudential Fox and Roach REALTORS®
530 Walnut St., Suite 260 Philadelphia, PA 19106