Seattle Condo Real Estate 101 Feed

Client Question: "What does it mean if the property for sale is a Bankruptcy sale?"

BankruptcyClient Question: "What does it mean if the property for sale is a Bankruptcy sale?"

Dear What is a Bankruptcy Sale,

Every bankruptcy sale is different but there are three main things to know when considering purchasing a house or condo that is a part of a bankruptcy proceeding.

  1. They take much longer than a traditional sale; the last one we worked on took 6 months to close
  2. The court and the underlying lien holders can come back and increase the purchase price regardless of what you agreed to and signed around in the contract
  3. There is a bankruptcy fee that cannot be financed into the purchase price that is typically around 5% of the purchase price that must be paid at closing as part of your closing costs (for example: if the purchase price is $500,000 the fee is an additional $25,000)

In summary, if you are going to purchase a bankruptcy sale property you want to make sure you are flexible on your time frame as it can take an undetermined amount of time that is determined by the courts. You should also have more liquid funds available to pay for the additional fee and you should be prepared to wait a long while and then have the purchase price potentially get higher, leaving you to decide if you want to pay more or walk away after all the time you already invested in waiting.

By Marco Kronen with Seattle Condo Review: A guide to Seattle downtown condos.


Coffee Table Chat Video Series - I want to buy before I sell but what are my lending options to make this happen?

Coffee Table Chat - Episode 2

Our new video series addressing actual client questions and concerns in our current market. They will cover whatever issues our clients are experiencing and will typically feature a guest who also works in the industry such as a lender, an Escrow closer, a Title rep, etc.

Hopefully you find the videos informative and helpful!

Enjoy Episode 2! 
"I want to buy before I sell but what are my lending options to make this happen?"

 

By Marco Kronen with Seattle Condo Review: A guide to Seattle downtown condos.


Client Question - Do I Have to Get My Own Home Owner Insurance?

Home Owner InsuranceClient Question: “I’m buying a condo and the dues cover something called a Master Insurance Policy, do I have to get my own home owner insurance? And if so, when do I have to have it in place?”

Dear Do I Need Home Owner Insurance:

The answer to this question, like many questions we get, is it depends. However, in general, the answer is yes. If you are getting a loan to secure your condo, then the answer is definitely yes. The lender will require that you have your home owner insurance in place before they will approve the loan and close on that loan. Most people look to whomever holds their car insurance to secure their home owner insurance as a discount is typically given when you bundle your policies, but you can go with whomever you choose. You will want to have your home owner insurance in place prior to closing as your lender will order what is called the insurance binder from whomever you choose, and will need that in order to close your loan. Also, most Home Owner Associations require that each individual owner have their own insurance policy because there are limits on what is covered by the HOA’s master insurance policy.

What type of insurance you need is dependent on what type of insurance the condominium building you are buying into has. Most of the time, you will be getting what is called an HO6 policy. That means that if you flipped your condo unit over, and turned it upside down, whatever falls out would be what your insurance policy should cover. And what remains attached is often covered under the HOA’s master insurance policy.  That said, in some buildings, you have to get a policy that also covers the fixtures that are attached to the walls inside your unit as well, such as your cabinets, appliances etc. You will know which you will need once you receive the Condominium Resale Certificate and the insurance certificate will be included in that.

By Marco Kronen with Seattle Condo Review: A guide to Seattle downtown condos.


Client Question – Should I Have an Offer Review Date When Selling My Condo?

Multiple Offers5Client Question: “It seems like everyone is holding off to review offers, should we have an offer review date for our condo?”

Dear Should I have an Offer Review Date:

There are pros and cons to every strategy when it comes to listing your house or condo. For offer review dates here are potential risks and benefits.

Risks:

  • In order to create the frenzy of buyers who are willing to compete for your home on an offer review date you have to price strategically, which often means pricing it below what you think it will sell for in order to give the buyers room in their budget to escalate the price up so if you don’t get offers on your review date and get just one after the fact, you have to be comfortable taking that lower list price as your sales price

Continue reading "Client Question – Should I Have an Offer Review Date When Selling My Condo?" »


Coffee Table Chat Video Series - Can I buy a home before my job starts?

Welcome to Coffee Table Chat!

Our new video series addressing actual client questions and concerns in our current market. They will cover whatever issues our clients are experiencing and will typically feature a guest who also works in the industry such as a lender, an Escrow closer, a Title rep, etc.

Hopefully you find the videos informative and helpful!

Enjoy Episode 1! 
"I am moving to Seattle and want to buy right away but don’t start my job for a couple months, what do I do?"

 


Own an Investment Condo or Thinking About Buying One?

If you own a rental condo right now or are thinking about investing in one there are many factors you should consider and several important laws to keep in mind to ensure you are running your real estate investments successfully.

2015 Seattle Condo Rental Market Statistics (provided by Cassie Walker-Johnson with Windermere Property Management/Lori Gill & Associates)
Book1

Important Laws that Have Changed 

  • The Rental Registration & Inspection Ordinance (RRIO) is now in place and requires that all rental properties be registered with the City of Seattle by the end of 2016 (the deadlines for registration are based on the number of rental units and zip code)
  • Owners need to provide their tenant(s) with a copy of the current rental registration
  • Once registered, the properties will be inspected at least once every 10 years by a qualified housing inspector chosen by the owner or by the city inspector
  • A property owner cannot evict a tenant if the property is not registered with the City of Seattle under the RRIO
  • If an owner wishes to occupy their rental unit or have a family member occupy their rental unit and there is a tenant in place, the owner now has to give the tenant written notice at least 90 days prior to the end of the rental period (this used to be 60 days notice)
  • If the owner desires to sell their condo rental unit, and the tenant is in a month to month tenancy, you will need to get the tenants voluntary willingness to move.  The new city regulation does not provide owners of condominiums the right to evict a tenant for purposes of a sale of the property.  I think this is a big miss, personally.  Single family homeowners have this right, so I'm not sure why a condo owner does not have the same right.

 

Continue reading "Own an Investment Condo or Thinking About Buying One?" »


Join us for Condos Over Coffee 3/30 - Open Forum Coffee Chat

Condos over Coffee Logo with WritingCONDOS OVER COFFEE - March 30th

WHEN: March 30th 7:30 to 8:30am
WHERE:
Victrola in Capitol Hill (Pike Pine location)
TOPIC: Open Forum

This month join me at Victrola coffee shop in Capitol Hill's Pike Pine corridor for an open discussion forum meant to focus on your questions and things most timely for you. Come sip some java or tea and get the answers you've been looking for. This month’s Condos over Coffee is ideal for those who have any lingering questions they have been dying to ask about the condo market but just haven't asked yet. Now is your chance!

Feel free to email us in advance or leave a comment here with your questions and we’ll add them to the list of topics to try and cover.

Please RSVP here so that we can make sure to save a seat for you. Friends, family and/or colleagues are welcome to stop by too, so pass the word along!

Oh, and coffee's on me! So stop by on your way to work and get your burning questions about real estate answered.

NEXT MONTH'S EVENT - April 27th
Next month’s Condos over Coffee will be on April 27th and will be a discussion on prepping your condo for the market.

By Marco Kronen with Seattle Condo Review: A guide to Seattle downtown condos.


How Interest Rates Affect Your Purchase Power

With talk of interest rates creeping up over the next few years we thought it would be powerful for buyers out there to see how the interest rate you get affects the price of a home you qualify to purchase.
BuyerPurchasingPower
If you are on the fence about buying now, remember to consider the affect that increasing interest rate will have on what you can afford in a condo.

By Marco Kronen with Seattle Condo Review: A guide to Seattle downtown condos.


New Lending Guidelines Making It Tough on Some Condo Buyers- Condo HOAs and Owners You Can Help

Approved Condo Building

A recent article in the Seattle Times, discussing buyer’s challenges with loan guideline changes, reminded me of the importance of HOA and condo buildings doing their best to stay viable and eligible for FHA, VA and Fannie Mae approvals not only for buyers in the market, but also for condo owners who might want or need to refinance. In light of stricter lending guidelines, and frankly the sheer cost of buying a condo in our very expensive Seattle condo market, there are three key things condo owners should be encouraging their HOAs to consider and stay on top off.

  • FHA Approval for the condo building
  • VA Approval for the condo building
  • FNMA (Fannie Mae) approval for the condo building

Read on to learn why these important condo building approvals might help preserve values in condo buildings, in any condo market.

Now first off, not all condo buildings will be eligible, regardless of how on top of it the HOA might be. But, in all three cases, the key thing I’d like to get on my soap box about and offer recommendations on, is that HOAs and property managers attempt to keep any current eligibilities active. Renew them on time! If your condo building is already FHA approved, and already a FNMA approved condo project, keep it active. Renewals are much easier than the initial approval process. Also, because guidelines can change from time to time, once you let your approval expire, it might not be even possible to get it again if something has changed that affects your building’s eligibility.

Continue reading "New Lending Guidelines Making It Tough on Some Condo Buyers- Condo HOAs and Owners You Can Help" »


Client Question of the Week: What is the HOA Payoff Demand & Who Pays for it?

Client Question of the Week: “Escrow just called me and asked for a credit card to pay for an HOA Payoff Demand. What is this and who pays for this? Is it the same as the Resale Certificate I already paid for?” - Condo Seller

Dear 'What is the HOA Demand':

HOA DocsAs a seller of a condominium there are several additional fees that you will incur that relate to ordering documents that are required in order for the sale to close. When you list your condominium you will order and pay for what is called a Resale Certificate and provide that to the potential buyer. It contains important consumer information about the association. Included in this package are copies of the association documents such as the declaration, covenants, bylaws, budget, association meeting minutes and so forth.

Once you get into a contract with a buyer, the Escrow Company will contact you to ask you to order and pay for what is typically called the HOA Payoff Demand. This report gives Escrow  payoff information in order to ensure all funds due to the HOA are collected for the property at closing. It will include funds that are owed for both the seller and buyer.  The fees can include HOA dues, late fees, fines that might be owed, transfer fees associated with the transfer of ownership within the building, move-in fees, etc..

Some HOA’s also use a third party service to provide such information to the lenders, title and escrow companies.  The fees are established by your HOA and the company they use, such as Condocerts.com or Homewisedocs.com.  Sometimes there will be a rush fee if you have a short closing time frame to ensure the document arrives in time to meet the contractual closing date agreed to.

There is one last HOA document that is often required when you sell a condo and a mortgage lender is involved, that is the Lender Questionnaire, which has lender specific questions for the HOA (also called a Condo Questionnaire). If this document is required by the lender then it should be paid for by the buyer or the buyer's lender on their behalf. The key is that all of these documents need to be paid for when they are ordered. So plan ahead for that and be prepared to be asked to order and pay for the documents required. And try to order them as soon as possible as not doing so will eat up valuable time, and both the buyer and seller are obligated to close on time. 

In short, the Seller side orders and pays for the Resale Certificate and the HOA Payoff Demand. The Buyer's lender orders the Lender Questionnaire (or any other lender specific requests of the HOA) and the Buyer pays for that.

Hope this information helps sort out the fees that are usually charged for document preparation in association with selling a condo!

- Marco

By Marco Kronen with Seattle Condo Review: A guide to Seattle downtown condos.