Unlocking Condo Closings: Your Guide to Overcoming Challenges and Streamlining Transactions
Condo deals can be complex, but knowing the hurdles and having a solid plan can make all the difference. I have taught many Condo Education classes to real estate agents and brokers to help then simplify the condo transaction. Getting answers before getting a headache. If a condo has issues with insurance deductibles, structure issues, and no reserves, we don't want them wasting their time and yours by listing the property and accepting conventional financing offers. They most likely should list that property for cash only offers. It is important to do the due diligence up front for a hassle-free transaction on both sides for the buyer and seller. Here’s a breakdown of common challenges realtors and buyers face, and how we have taught our realtor partners how to overcome them upfront so that you can successfully close more condo deals.
Common Condo Transaction Challenges:
- Financing: Condo Reviews, Master Insurance Coverage Insufficient, Unclear Title, etc.
- HOA Requirements: Understanding HOA rules, fees, and any special assessments can be tricky.
- Appraisals: Finding reputable Comps, Assessing the unit and the Condo building.
- Title & Legal Challenges: Ensuring clear title and resolving any legal issues can delay closings.
Listing Agents: Condo Listing Checklist
To make the process smoother, ask the Seller and/or HOA for the following when listing a condo:
- HOA Contact Info - All positions of the board, CAM, Property Manager etc.
- HOA Dues & Frequency: How much, is there a master and subdivision HOA, Any Capital Contributions?
- Coverage of HOA Fees - What does this cover? Is water included?
- Any Special Assessments? If so, for what? Is it structural? Is it pending or approved?
- Unpaid Seller HOA Fees/Dues?
- Condo Budget- Does the condo meet the 10% reserve requirement for home financing?
- Condo Rules & Regulations - Income or credit restrictions? Rental restrictions?
- Condo Application - Where to find it, how long does it take for Applicant review?
- All Notices Received by the Property Owner
- Most Recent 12 Months of Meeting Minutes
Effective Communication with HOA
To ensure clear and effective communication:
- Introductory Call: Start with a call to establish a connection.
- Prepare a Call Script: Outline key points and questions.
- Include Text of Importance: Share critical details and requirements.
- Document Communication: Keep records of all interactions.
- Follow-Up: Offer multiple ways for the HOA to provide information and avoid unnecessary details when speaking with them, remember they are only there for a few hours a day 1 or 2 days a week, they are busy.
- Build Relationships: Show appreciation with in-person visits, sweet treats, and thank you cards.
Understanding the Financing
Full Condo Review: Thorough examination of the condo’s financial health, HOA, and legal status. Required for conventional loans with less than 25% down payment.
Limited Condo Review: Focused review when the condo meets specific criteria, typically resulting in faster processing. No Financials are needed. This occurs when the buyer is putting 25% or more down.
Non-Warrantable Condo Review: For condos that don’t meet traditional criteria; requires specialized lenders and often higher down payments.
Short on funds for a 25% down payment? Consider these options:
- Down Payment Assistance: Explore city/county and state programs if you qualify.
- Creative Financing: A combination of a first mortgage and a HELOC can help cover down payments.
Ready to navigate the condo market with ease? Contact me today for personalized advice and solutions to ensure your transactions close smoothly and on time! Let’s turn those challenges into opportunities. 🏠💼
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Feel free to reach out if you have any questions or need further assistance with your condo transactions!
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