Fred Glick, a Broker, Real Estate Realist, and Founder of Arrivva, holds a stellar track record with over $2 billion in residential transactions while grounded in a lifelong passion for real estate. René Pérez Jr. is an adept Broker and Pricing Savant, who specializes in strategic problem-solving and long-term growth.
Join them in the We Fixed Real Estate podcast by Arrivva, where they share expertise and insights about the dynamic real estate landscape. Arrivva, a leading real estate and mortgage brokerage, caters to buyers, sellers, and mortgagees with love, integrity, and a transparent fee structure. Featured in the Wall Street Journal, Arrivva is transforming the real estate landscape, one happy client at a time.
Here’s a glimpse of what you’ll learn:
- Discover why high condo fees might not be the red flag you think they are
- Learn what condo reserves are and why they matter more than you think
- Explore the new Fannie Mae regulation that’s changing the condo landscape
- See how states like California and Washington enforce safety and reserve standards
- Uncover the hidden risks of low condo fees that could cost you more in the long run
In this episode of We Fixed Real Estate
Are high condo fees always a bad thing? Or could they actually be a sign of something smarter, maybe even safer?
In this episode, we challenge the common assumptions and dig into what those fees might really be telling you. With new Fannie Mae rules, regional twists, and a few surprising truths, you’ll start to see condo fees in a whole new light. Don’t skip this one—you might rethink what you’re really paying for.
Resources mentioned in this episode
EPISODE TRANSCRIPT
[00:00:14] AI Podcaster 1: Okay, let’s get into something today that might feel a bit backwards at first, we’re talking condo fees.
[00:00:20] AI Podcaster 2: Right.
[00:00:21] AI Podcaster 1: Specifically, why paying high condo fees could actually be, well, a really smart move for you.
[00:00:26] AI Podcaster 2: Yeah. It sounds counterintuitive, doesn’t it? Compared to grabbing that place with the super low fees.
[00:00:31] AI Podcaster 1: Exactly. We’re basing this deep dive on some interesting material: condo fees and reserves, a modern guide and also a new note.
[00:00:40] AI Podcaster 2: The core idea here isn’t just about your monthly budget, though, that’s obviously important.
[00:00:44] AI Podcaster 1: Mm-hmm.
[00:00:45] AI Podcaster 2: It’s really about the bigger picture. Things like long-term value stability, and honestly just avoiding major headaches later on.
[00:00:53] AI Podcaster 1: Headaches sound bad. Financial ones, especially.
[00:00:55] AI Podcaster 2: You bet. So, think of this as maybe a shortcut to understanding what makes a condo association financially healthy.
[00:01:03] AI Podcaster 1: Okay. Let’s unpack this then. High fees being a positive.
[00:01:06] AI Podcaster 2: Yeah.
[00:01:06] AI Podcaster 1: How does that even work? Our source says it’s because the building takes care of everything.
[00:01:10] AI Podcaster 2: Well, that’s the crux of it. Often those higher fees mean the building has really robust reserves.
[00:01:14] AI Podcaster 1: Reserves. Okay. So like a savings account for the building.
[00:01:17] AI Podcaster 2: Exactly. A dedicated fund just for the big stuff, major repairs, maintenance. Think roofs, plumbing, maybe structural elements, Things that cost a lot.
[00:01:28] AI Podcaster 1: Right. Not just painting the hallways.
[00:01:30] AI Podcaster 2: Definitely not. Yeah. And having that money set aside is crucial. It helps prevent those sudden, often huge special assessments.
[00:01:37] AI Podcaster 1: Ah, the dreaded special assessment. I’ve heard horror stories. Those unexpected five figure bills.
[00:01:43] AI Podcaster 2: Precisely. So strong reserves often funded by those higher fees mean proactive planning instead of, you know, crisis management.
[00:01:50] AI Podcaster 1: Okay, that makes sense. But here’s where it gets really interesting, especially for you listening. The source mention, new Fannie Mae rules.
[00:01:57] AI Podcaster 2: Yes. That’s a key development specifically for condo buildings with more than four units.
[00:02:03] AI Podcaster 1: Okay.
[00:02:03] AI Podcaster 2: There’s now a requirement that they need to have had a reserve study done within the last three years.
[00:02:08] AI Podcaster 1: A reserve study. So what is that? Like an audit?
[00:02:11] AI Podcaster 2: Sort of, but more like a physical and financial checkup for the building itself. Experts look at all the major components, the roof, the elevator’s, deciding whatever.
[00:02:18] AI Podcaster 1: And they figure out how long everything will last.
[00:02:20] AI Podcaster 2: Exactly. How long it’s expected to last, when it will likely need replacing, and crucially, how much money the association should be setting aside each year to pay for it when the time comes.
[00:02:32] AI Podcaster 1: Wow. Okay. So that rule pushes for more transparency.
[00:02:36] AI Podcaster 2: Transparency and proactive financial planning. Yeah. It connects directly back to that stability we talked about. It makes it a safer bet for you, the buyer.
[00:02:43] AI Podcaster 1: And this isn’t just theoretical, right? The source mentioned something about an act in California dealt with balconies.
[00:02:50] AI Podcaster 2: Absolutely. That California legislation, which came about after some, well, some tragic structural failures .
[00:02:56] AI Podcaster 1: Right?
[00:02:57] AI Podcaster 2: It really highlights how laws can step in to enforce safety and, you know, structural checks. It shows why proper maintenance funded by adequate fees and reserves is so critical.
[00:03:07] AI Podcaster 1: So it ties back to that idea of a building being properly cared for.
[00:03:11] AI Podcaster 2: Precisely. It’s not just of the surface appearance, it’s about the underlying health and safety.
[00:03:15] AI Podcaster 1: Good point. And the source also flagged, I think Washington State, Seattle specifically.
[00:03:20] AI Podcaster 2: Yeah. Just as an example that these rules and regulations can really vary depending on where you are. So for you, it means doing that local homework is essential.
[00:03:28] AI Podcaster 1: Always do the homework.
[00:03:29] AI Podcaster 2: Always.
[00:03:30] AI Podcaster 1: So wrapping this up, what’s the big takeaway for you if you’re thinking about buying a condo?
[00:03:36] AI Podcaster 2: It’s really about shifting your perspective, I think.
[00:03:38] AI Podcaster 1: Okay.
[00:03:39] AI Podcaster 2: Look past just that monthly fee number. Try to understand the comprehensive value. What are you getting for those fees?
Is it security? Is it proactive maintenance? Is it avoiding those potential nightfire assessments?
[00:03:52] AI Podcaster 1: Right? It’s about long-term peace of mind, maybe more than just short-term saving.
[00:03:56] AI Podcaster 2: Exactly. Peace of mind and protecting your investment. So maybe the final thought for you to consider is this, when you’re looking at condos, how do you personally weigh that immediate saving from low fees against the, well, the potential future risks?
The risks that come with maybe not having enough in reserves or putting off needed repairs.
[00:04:16] AI Podcaster 1: Hmm. That really makes you think, doesn’t it? What is the true cost of going cheap on potentially the biggest investment you’ll make?
[00:04:24] AI Podcaster 2: That’s the million-dollar question, isn’t it?