Overview
- Conducting thorough due diligence is essential to ensure financial security, legal protection, and long-term satisfaction.
- Key considerations include understanding the developer’s financial stability, reviewing governance documents, assessing management and operational plans, and verifying building quality and warranties.
- By asking the right questions, buyers can uncover hidden risks, confirm promised amenities, and make informed decisions.
Buying a condominium is a long-term decision that shapes how you live, invest, and grow. Before you commit, you need clarity on what truly matters beyond floor plans and finishes.
The right questions to ask before finalizing your condominium purchase help you assess value, lifestyle fit, and long-term potential.
At Shang Summit, we believe informed decisions lead to confident ownership. That’s why knowing these questions sets the foundation for a home that delivers lasting comfort, value, and peace of mind.
Why Due Diligence Matters
A pre-selling residence calls for careful consideration beyond amenity lists. Due diligence allows you to see the full picture, from financial commitments and legal safeguards to how the development supports your intended lifestyle.
By taking the time to review details thoroughly, you understand the long-term costs, management standards, and overall value. These factors shape your everyday living and future returns.
At its core, due diligence protects your investment and reinforces confidence in your decision. It ensures that your move into a new home is guided by insight and intention, setting the stage for a refined and rewarding ownership experience.
The 20-Point Due Diligence Checklist
We’ve curated a 20-point due diligence checklist covering the most critical areas: finances, government, management, and building condition. Each item is designed to surface details that are often overlooked, giving you a clearer understanding of both investment and the lifestyle you’re stepping into.
The sections that follow break down eac area, outlining the right questions to ask before you commit.
Finances and Fees
Overly optimistic estimates can lead to unexpected fees down the line. Reviewing the developer’s financial assumptions helps protect your monthly cash flow and reduces the risk of early special assessments, ensuring a more stable and predictable ownership experience.
- Can I review the developer’s detailed Pro-Forma Budget for the first two years of operation?
- What is the developer’s professional experience in estimating the costs for similar properties, and what is their track record for projection accuracy?
- What is the developer’s commitment (stated in the contract) for the initial funding of the Capital Reserve Fund upon turnover to the owners?
- What are the recommendations from the Projected Reserve Study, and what percentage of that figure is the developer committing to fund?
- Are the purchaser deposits held in an insured escrow account, and is the account protected from the developer’s financial risk?
- Has the developer secured adequate construction loan financing, and are there any liens or judgments against the development company?
Rules and Governance
The legal documents define the relationship between you, the other owners, and the developer. This is where you uncover the timeline for owner control and the rules that will govern your life in the building.
- Where can I obtain a full copy of the draft Covenants, Conditions, and Restrictions (CC&Rs) and the By-laws?
- What is the timeline and mechanism for the formal turnover of the HOA Board from developer control to owner control?
- Has the developer or general contractor faced any litigation related to construction defects in their past projects?
- What are the exact terms of the Statutory Warranty provided by the developer for structural and common elements?
- Does the draft Declaration restrict my ability to rent the unit, and are there future caps on the percentage of rental units?
- What is the policy regarding potential future Special Assessments required to correct construction defects discovered after turnover?
- Who is the proposed initial property management company, and what is the maximum duration they can be contracted without an owner vote?
- Can I review the site plans to verify the number of parking spaces and the specific amenities promised (e.g., specific gym equipment, pool size)?
Building Condition
When buying a pre-sell, you cannot hire an inspector. Instead, you must scrutinize the documents that define the construction quality, materials, and long-term maintenance responsibilities.
These six questions move your due diligence from the contract to the physical integrity of the structure.
- Can I review the building’s official blueprints and materials specifications (e.g., brand of windows, thickness of concrete floors)?
- What are the guaranteed performance standards for systems like soundproofing, HVAC efficiency, and window noise reduction?
- Who will be financially responsible for correcting defects discovered during the first 12 months (the developer or the HOA)?
- What is the specific fire and sound rating of the walls, floors, and ceiling separating my unit from common areas and other units?
- What level of “all-in” Master Insurance coverage is the developer required to secure before closing, and does it include flood or earthquake coverage if needed?
- Is the developer required to post a Performance Bond or surety to cover costs if construction is not completed according to plan?
Key Takeaway
Knowing the key questions to ask before finalizing your condominium purchase gives you control over your investment and your future lifestyle. It shifts the process from uncertainty to clarity, letting you make confident decisions without leaving anything to chance.
Ready to take the next step with confidence? Discover how Shang Summit addresses every point on this checklist for a truly secure investment. Contact us today to learn more about our commitment to transparency and quality.
