A recent RealtyTrac/Trulia survey revealed that 85 percent of current homebuyers are interested in distressed properties—residences that have been foreclosed or are being offered as short sales. At the same time, the city and suburbs possess a substantial stock of distressed condos, lost either by homeowners or by developers.

But buying a foreclosed condo has its own particular pitfalls. “When you buy a single-family home, you’re in control of your own destiny,” says the Coldwell Banker agent Matt Garrison, whose CondoShark.com aids in foreclosure shopping. “When you’ve got shared ownership, you’re all in it together, no matter what.” That’s why it’s important to remember the following tips from foreclosure specialists when looking for a distressed condo.

Know the status of the condo’s assessments.
Illinois law holds the buyers of foreclosed condos liable for up to six months of unpaid assessments; it also requires listing sheets to spell out what’s due. Ayoub Rabah, president of Great Street Properties, says that buyers who are on the hook for back assessments can often engage the selling bank in some sort of negotiation. Scott Newman of Newman Realty goes further. “I would never let my buyers pay for back [assessments] unless the bank is giving away the property for free,” he says. “That’s a bank loss.”

Is the homeowners’ association stable?
If more than 15 percent of a building’s homeowners are in arrears on their assessments, most banks won’t finance a purchase there. Marki Lemons of Keller Williams Realty says that buyers should ask the association for that information—or, better yet, sellers should provide it up front. Most lenders use a questionnaire to determine a property’s status; sellers’ agents can get one in advance and use it as a guide as to what information they should provide.

Does the homeowners’ association have first right of refusal on purchase contracts?
If so, a current resident of the building may wait until an outside offer on a foreclosed unit comes in and then replace that offer with an identical one. “They wait to see what the market’s best offer is, and then they come in,” Rabah says. But he doesn’t necessarily believe buyers should steer away from buildings that have such contracts. “It’s a caveat emptor thing to watch for.”

Bring along a contractor.
“You can’t play games with the bank at the end of the process and say, ‘Oh, I want a $5,000 credit for this repair,’” Newman says. Banks sell their properties in as-is condition, so it’s vital to know early in the process what you will need to spend to make the property whole. Newman says that means checking out any trouble spots and factoring any remedial costs into your financing plan.

Don’t waste time on blacklisted buildings.
Garrison says that almost every mortgage broker keeps a list of buildings considered unfinanceable. Ask your agent and mortgage broker if they have such a list and avoid the buildings on it.

Check the ratio of owners to renters.
Most lenders won’t finance a purchase in a building with a lot of renters. And if lenders won’t finance purchases in a particular building, Rabah notes, buyers paying cash will predominate. They typically pay significantly less than financed buyers, which then drags down the value of other units in the building.

Get to know a reliable resident of the building.
He or she might provide information about the strength of the homeowners’ association, for instance, or the possibility of future special assessments, Lemons says. “If you don’t know [a resident] already, use Facebook, Twitter, and Google,” she adds.

“Be prepared to move quickly when a good [deal] pops up,” Garrison says.
“Offer all cash if you can—and a quick closing.” Always be wary of a good-looking deal that has been sitting on the market for a long time, he warns. You may have trouble getting financing, or there may be so much hidden damage that the property becomes a money pit.