Condo Buyers Should Never Buy Blind Without Insider Info

Consumers should never buy blind when it comes to shopping for a condo or a residence in a homeowners association (HOA), experts advise.

“Novice buyers often fall in love with the decorative staging or the lakefront view of a for-sale unit,” said Sara E. Benson, a Chicago real estate broker and appraiser with more than 30 years of experience.

“However, you need more high-tech inside information than typically available on a Multiple Listing Service printout,” advised Benson, CEO of Association Evaluation LLC, a Chicago-based real estate data-analysis firm. (

Working as an exclusive buyer’s broker for decades, Benson always did the behind-the-scenes condo-investigation homework for clients. On every deal, Benson dug into the condo documents—budgets, board minutes, history on special assessments, status of reserve funds, and common-area conditions before she let a buyer blindly sign a sales contract.

Why? Because more than half of the 337,000 community associations in the U.S. are facing “serious financial problems,” reported the Community Associations Institute. And, 72 percent of association-governed communities were underfunded in 2013, according to Association Reserves, a California-based company that helps associations with budget and operational issues.

In 2012, Benson utilized her real estate appraisal background to develop a unique algorithm analyzing more than 140 data-points regarding the internal workings of community associations. Using the data, she commissioned a team of computer scientists and programmers to create a new, patent-pending scoring system—the “Private Association Rating”—or PARScore®, a revolutionary new high-tech, data-driven analytics process.

So, how does a condo shopper obtain the often hard to get financial information? The simplest way is just ask for it, and make the deal contingent on getting the information.

“You should insist that your Realtor or real estate attorney attach a special “Condominium Association Inspection Contingency Rider” to the contract to make completion of the deal contingent on receiving important documents and often hidden financial information.

The rider requests the following information: Declaration or Covenants, Conditions and Restrictions (CC&Rs), association rules and fine schedules, current and prior year’s operating budgets, most recent 12 months of board minutes and audits.

The rider also requests most recent reserve study and reserve study review, current reserve and operating account balances statement, lawsuit disclosure statement, owner-occupancy disclosure statement, life safety completion statement, and most recent 24 months of special assessment history disclosure.

The Contingency Rider also requires the seller to pay any expenses related to gathering the documents and providing them to the buyer.

The Contingency Rider also includes a new benefit—a Buyer’s Inspection Notice—which calls for visual examination of the property’s commonly owned elements, such as recreation facilities, swimming pool, fitness center, parking, elevators and common roof deck. The prospective buyer pays for the visual inspection as part of the PARScore® fee.

While surfing the web, a Chicago-area condo shopper found Association Evaluation through a Google search.

The buyer, who plans to move from north suburban Gurnee and hopes to buy a condo in southwest suburban Oak Lawn, downloaded the free “Buyer Kit,” the Condominium Association Contingency Rider, and the HOA Contingency Rider using the following links:

• Buyer Kit:

• Condo Rider:

• HOA Rider:

The buyer also asked Association Evaluation to complete a PARScore® evaluation on the Oak Lawn condominium he plans to buy. He already has received the association’s declaration, bylaws and insurance certificate. “Financial information and other documents listed on the Association Evaluation website have been requested,” he said.

“Today, potential buyers of condos or homes in HOAs have access to digital tools that de-clutter murky data in favor of transparent information that actually empowers the consumer in advance of their purchase,” said Benson.

The Association Evaluation team already has captured more than 50,000 Chicago-area and Illinois condo associations and HOAs in their database, and has completed hundreds of PARScore® reports from Bethesda, MD to Palm Springs, CA.

Through the proprietary algorithm, PARScore® provides a standardized rating between 400 and 900. Every association is assigned a unique Permanent Identification Code (PIC). More than 140 data sets are analyzed and scored against the coded individual associations by using the patent-pending PARScore® point system.

Depending on the number of units in the condo building, the cost of a PARScore® typically ranges from $300 to $850.

Collected data includes direct investigations with association directors and property managers, as well as on-site inspections of the communities. Additional data sources include monitoring corporate filings such as lawsuits, judgments and bankruptcies.

Financial reporting includes verification of operating and reserve-account monies. Board minutes are examined for adherence to standard accepted business protocol procedures and to ensure against unexpected and costly special assessments that have been discussed by the association’s directors, but not yet levied at the time of sale.

A check for date of last reserve study and date of last financial audit also serves to greatly reduce risk. News, Internet and media sources are consistently monitored for each association.


For more housing news, visit Don DeBat is co-author of “Escaping Condo Jail,” the ultimate survival guide for condominium living. Visit

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