Driving? Hit play below or listen on YouTube–> Selling your Condo – Do this first
Selling your Longmead Condo – Do this FIRST
Do you own a condominium in Wintergate at Longmead Crossing / Longmead Crossing?
If you are thinking of selling it, make sure your Real Estate Agent helps you do this FIRST.
There is a lot to selling your condo and now this process has an added layer that needs your attention and due diligence. It is very important and will save you time and frustration. It will avoid getting deep into the process and then finding out the buyer that you Ratified with can’t buy your condo.
So what do you need to do, you ask?
Whatever lender is working with the buyer that you end up ratifying your contract with, will require what’s called a Condo Questionnaire.
This questionnaire will cover several main issues that lenders are most concerned with and include; What is the investor concentration in the building? What is the condo fee delinquency rate? What do the reserves look like?
Investor concentration — What percentage of condo units are owner-occupied versus the percentage that are being rented out. https://selling-guide.fanniemae.com/Underwriting-Property-Projects/Project-Standards-Condos-Co-ops-PUDs/Project-Eligibility/Full-Review/1033001711/What-is-the-maximum-investment-concentration-for-a-condo-project.htm
At least half, 50%, of the total units must be principal residence or second home occupants.
Delinquency rate — What percentage of units in the condominium can be late on their condominium HOA dues. Guidelines state that no more than 15% of the total units may be 60 days or more past due on their condo fees. For example, if there are 100 condo units in the building no more than 15 units can be 60 days or more past due on these fees.
Reserves — at least 10% of the annual budget must go to Reserves. The lender wants to see the condominium is healthy and has funds adequate to maintain the property.
**NOW YOU WILL ALSO NEED
The above is the way it has been for as long as I can remember in this industry during my 27+ years. From what I have been told the incident in Miami where the building collapsed has triggered additional guideline requirements on the questionnaires. It is very important that the Lender Loan Officer learns and understands this piece so they can get involved to the best of their ability when necessary. To push back as needed when an Underwriter is too strict or not interpreting the rules correctly. This is new to the condo management companies as well. You can imagine a lot of frustration happening on the lender side, the buyer, the seller, and at the Management Companies.
*Fannie Mae is asking the lender to review the past 6 months of the condos’ meeting minutes and obtain information about any maintenance or construction that may have significant safety soundness structural integrity or habitability impacts on the unit or building.
*References to improvements, renovations, inadequate reserve funding, budget deficits, negative cash flow should all be researched.
*They also want the lender to review any available inspection engineering and other certification reports completed within the last 5 years to identify deferred maintenance that needs addressed. https://singlefamily.fanniemae.com/media/29411/display
This is no small task. How much information will satisfy that particular lender. What if this information is not available or Longmead management just doesn’t know the answers. Will the lender be okay? Fannie Mae be okay? Will the lender worry that Fannie Mae won’t be okay thus protect themselves and decide not to do the loan because they just don’t know what is acceptable to Fannie Mae… and don’t want to be stuck with a loan that Fannie Mae won’t buy from them.
So again, WHY IS THIS IMPORTANT TO YOU?
You can get the due diligence started NOW and get a copy of this Questionnaire ahead of time.
As your Listing Agent this is the first thing I will tackle with you.
It’s no different than getting a pre-inspection completed so you can address issues that would come up on the buyer’s inspection report. Keeping our heads in the sand is the last thing we want to do with this.
These forms take time to get completed and returned. If you and your Agent wait, you will be in the middle of the process and THIS is what you are waiting for… Hoping and praying that it comes back ok. And if I’m on the other side as the Buyer and I have spent money on the home inspection and appraisal ($1,000), and the Lender finally gets this questionnaire back to the buyer, and it doesn’t meet guidelines and it kills this buyer’s deal…
That’s going to leave a very bad taste in everyone’s mouth. What a waste of time and effort and money that could have been avoided!! And it CAN be avoided, by doing this due diligence up front.
If only Buyers who are able to put 20% down are eligible to buy your condominium, then that needs to be communicated from the get-go. To all potential Buyers. So you don’t waste everyone’s time. Most importantly yours.
As your agent I will help you get this completed by the Longmead condo management company. With this tackled upfront we can get your buyer contract to the closing table without delay.
Questions? Never hesitate to hit me up…