Buying a condo is a lot like buying a car, especially for novice first-time purchasers, real estate experts say.
“You may fall in love with the shiny, new look but a lot can be wrong under the hood. And just like a car’s engine, a condo association has many moving parts that need constant care and repair,” warns veteran Realtor Sara E. Benson, CEO of Association Evaluation LLC, a Chicago-based real estate data-analysis firm.
“Shouldn’t you know if you're being taken for a ride before you buy?” Association Evaluation asks when introducing the “Private Association Rating”—or PARScore® on the company’s new online website video, which provides prospective buyers an introduction to the new condo rating system. Visit www.AssociationEvaluation.com to view the 60-second video.
Launched in 2012 in Chicago, the Association Evaluation LLC team already has gathered the information necessary to rate 20,000 Chicago-area condominium associations and HOAs.
“PARScore® is the only product that gives you a complete, under the hood look at both the financial and physical health of your condo association,” said Michael Reilly, Chief Operations Officer for Association Evaluation LLC. “ParScore® cuts through the clutter and gives you a simple score that helps you steer clear of a bad investment.”
Every PARScore® report includes a site evaluation of the common areas by a certified association evaluation professional plus a review of the association documents. Through Association Evaluation’s new high-tech, data-driven proprietary algorithm, PARScore® provides a standardized rating between 400 and 900.
“The PARScore® is like a credit score for condominium and homeowners associations, or a CARFAX® for condos,” said Reilly. “It is a tool for peace of mind about the building in which you’ll be living. You’ll learn if the volunteer board is handling the money properly and if there is a fiscally sound budget.”
Financially healthy and well-run associations will receive higher ratings while risky associations plagued with low bank balances, non-paying owners, special assessments and lawsuits will receive lower ratings, Benson explained.
The highest achievable PARScore® rating is 900 and indicates the most creditworthy and healthy associations. Lower PARScore® ratings reflect associations with the following problems:
• High assessment delinquencies;
• Excessive foreclosure rates;
• Excessive non-owner occupancy rates;
• Pending lawsuits;
• Low financial reserves;
• Known unabated health hazards (mold, radon, lead, etc.)
“The condition of a property's condominium association is arguably the most important factor in determining the value of a property and helps gauge whether or not the unit is a safe investment,” agreed broker Jeff Nobleza of Baird & Warner’s Evanston, IL, office.
“However, brokers and buyers don't seem to put enough emphasis on this,” Nobleza said.
“Association Evaluation helps buyers determine whether or not a particular property is a good investment for them. When literally hundreds of thousands of dollars are at stake you’d think a buyer would want to go the extra mile to protect themselves.”
“The PARScore® concept is a great idea that is long overdue,” said veteran Realtor Ron Ruby, managing broker/owner of Weichert First Chicago Realty. “It is a concept that benefits all parties—consumers, Realtors, lenders and condominium associations.”
If you are planning to buy a condominium this spring you now can have the purchase evaluated in advance at a bargain price by utilizing the PARScore®, Benson said.
“Association Evaluation now is offering to evaluate and rate your condominium association or homeowner association (HOA) containing a maximum of 999 units for a fee of $200,” Benson said. The introductory 90-day offer covers the early spring condo-buying season of March, April and May.
“This is an opportunity to receive a ground-breaking, in-depth report on your condo or homeowner association at just a fraction of the typical cost,” Benson said.
PARScore® pricing typically is based on the number of units in the association. The more units in the development, the more common elements need to be evaluated and the more time is spent reviewing all of the pertinent association documents.
For example, a PARScore® on a condo association with less than seven units typically costs $299, while a building with 20 to 49 units would be charged $449. A PARScore® on an association with 50 to 99 units typically costs $549. Associations with more than 500 units typically pay $859 for a PARScore® report.
The 90-day introductory PARScore® offer does not apply to developments of 1,000 units or more For developments in excess of 999 units, please visit:(http://associationevaluation.com/contact-us/) for pricing. For more information, call 844-727-7267, or to view the video, visit: www.myParScore.com.