I recently sat down with Seattle real estate agent Jim Reppond to discuss the financing and sale of condominiums in the current market. Here are some of the highlights from that conversation:
Financing requirements – Jim’s recent experience has been that major lenders such as Fannie Mae and FHA are requiring strict compliance with their condominium lending guidelines. He indicated that boards and property managers can facilitate sales and enhance the value of the property by making information pertaining to those lending guidelines (such as the percentages of owner-occupied units and delinquent units) readily available to potential purchasers of units and their agents.
Resale certificates – Jim is not seeing potential purchasers back away from deals due to disclosures in resale certificates that the association has not obtained a reserve study. He is advising his clients to carefully review meeting minutes to gain a better understanding of the type of association they might be joining. Jim noted that the failure to disclose major repair projects that are being considered by the board at the time resale certificates are issued can lead to litigation over the obligation to pay special assessments.
Canceling purchase contracts – Jim is not seeing individuals receive their earnest money back after canceling purchase contracts. He acknowledged that most purchase contracts in the recent past did not contain the types of contingency clauses that would allow for this to occur. Jim said that such contingency clauses are now being added to purchase contracts if requested due to depressed market conditions. He did describe how one purchaser was recently able to secure a lower price than the one stated in the contract by working with the developer to have the value of the unit re-appraised.
Jim’s blog The Seattle Specialist (www.theseattlespecialist.com) is an excellent resource for information about the Seattle real estate market and related issues. His “car” videos are definitely worth a look.
Financing requirements – Jim’s recent experience has been that major lenders such as Fannie Mae and FHA are requiring strict compliance with their condominium lending guidelines. He indicated that boards and property managers can facilitate sales and enhance the value of the property by making information pertaining to those lending guidelines (such as the percentages of owner-occupied units and delinquent units) readily available to potential purchasers of units and their agents.
Resale certificates – Jim is not seeing potential purchasers back away from deals due to disclosures in resale certificates that the association has not obtained a reserve study. He is advising his clients to carefully review meeting minutes to gain a better understanding of the type of association they might be joining. Jim noted that the failure to disclose major repair projects that are being considered by the board at the time resale certificates are issued can lead to litigation over the obligation to pay special assessments.
Canceling purchase contracts – Jim is not seeing individuals receive their earnest money back after canceling purchase contracts. He acknowledged that most purchase contracts in the recent past did not contain the types of contingency clauses that would allow for this to occur. Jim said that such contingency clauses are now being added to purchase contracts if requested due to depressed market conditions. He did describe how one purchaser was recently able to secure a lower price than the one stated in the contract by working with the developer to have the value of the unit re-appraised.
Jim’s blog The Seattle Specialist (www.theseattlespecialist.com) is an excellent resource for information about the Seattle real estate market and related issues. His “car” videos are definitely worth a look.
