I have to say I was completely flummoxed recently by a Realtor who took a listing for a condo without knowledge of what type of financing was available for that condominium complex. I wondered what they would have done if their seller received an offer that was contingent on financing? How would they know if the lender would approve the complex (and the loan) other than just by waiting for the contract to go through underwriting? Doesn’t due diligence dictate that every deal should get the best opportunity to succeed by eliminating as many variables as possible?
So to all you Realtors out there, this is one of the things for which they pay me the big bucks! I am the resource to help you figure out what financing will work for your client. I will provide the condo questionnaire and you connect with the condo management company for the answers. Then my job is to ascertain what financing will work.
I would also suggest that you gain as much familiarity as possible with a subdivision. You can pull reports from MLS to review the history of units purchased in that subdivision; were they financed? Does a precedent of recent financed transactions exist? But overall, consider me as a resource when it comes to setting you and your client up for success with potential buyers.
To that end, there’s a laundry list of details to be obtained about the property, the association, and the subdivision itself; and there is nothing proprietary about any of it. The information needed is clear and pretty easily acquired. We need only look to the condo questionnaire for things like:
- What is the delinquency rate on HOA fees by the existing owners?
- What are the costs and coverages of insurance in common areas?
- Does any entity own more than 10% of the total units?
- What kind of shape is the budget in?
- What is the status of reserves in budget?
Are there any current special assessments? Are any planned?
There may be a lot of questions to nail down, but these are the ones the future buyer’s lender is going to need answers to – do your homework and be prepared for the test. These questions will be on the final exam.