SAVY BUYERS LEAD TO HAPPY CONDO OWNERS
It is in the news all of the time, but the fact of the matter is that the lending rules are changing all of the time. When buying a condominium, in Texas, the contract allows for delivery of the condominium resale certificate and required attachments (annual budget and certificates of insurance) within so many days of the date of contract execution. On the back end, the underwriter will confirm that the complex is on their approved list and if not, require completion of a lender questionnaire. Too many times, this detail is left until the loan package is delivered to the underwriter for final approval and can cause last minute delays and in some instances, a complete denial of the loan based on the property not meeting lender underwriting guidelines.
A BIG tip for any buyer — if you are considering the purchase of a condominium, and are at the point of considering an offer, have your Realtor contact the listing agent and complete a few preliminary inquiries:
- What is the percentage owner/occupancy of the building?
- Are there any pending lawsuits and if so, what is the nature of the lawsuit?
- What is the percentage of owners delinquent in their HOA dues?
- What is the amount currently held in reserves for major planned maintenance and repairs? Is it, at minimum, 10% of the annual operating budget?
Once you have this information, run it by your lender and see if any of the answers raise red flags. Much, much better to get the red flags resolved on the front end!
