Nothing Against You But...

I ran into this while surfing through emails. It is by far not the only one. People (and agents) contact me about condo-hotels, and demand that I provide condo docs, minutes of the Board Meetings, financial statements of the Condo owners Association, their budget, proof of reserves... And when we do not volunteer all that without the accepted offer, they get upset. This one is is from the Buyer.

"Nothing against you but this is one of the many problems I have with realtors. Ashley (Owners Realtions Manager - J.Z.) said the realtors could help me get the financials from the sellers. Why would I want to enter into a contract without knowing any numbers? "

Dear would be buyer,

I am selling real estate. I am licensed to sell real estate for your enjoyment. And you are asking me about the income, which is the result of not the Seller’s actions, but another company that runs the Front desk.

And this means that you are basing you decision to buy or not to buy not on real estate, not on your enjoyment of the property, but on the income, which you expect from a third party. This constitutes selling securities. Yep, selling income, derived from the activity of the third party, constitutes selling securities, and it requires a different license, different disclosures, different everything.

I understand that buying a condo-hotel, you would like to know the financial side of the operations. That’s fine, you can get this information. Not from me, but from the Seller.

Why I am not giving it to you?

If someone in the street would ask you how much you are making, are you going to provide him or her with your taxes? But you would, if you want to get a mortgage, wouldn’t you?

Same thing here. You are asking the Seller to disclose private information to you. S/he wouldn’t. But if you are a buyer, there is a bilateral contract, there is the deposit in place, then s/he would.

Until then you may rely on general information that I can provide. Not exactly about this particular unit, not the exact numbers...

And it comes like this: “Usually, if the rental income covers your Association dues and taxes, it is good. Yes, it can be higher than that, and yes, it can be lower that this. The better the economy, the better the income and in bad years you would probably be around breaking even and in good years you would probably have some dough left after paying all expenses”.

If you do not want to make an offer because you do not trust me, too bad. Until it is in place, the Seller does not have to prove anything to you.

Do you know how many people are asking for this information about someone else’s income in one day? Some days I get more than a dozen of these requests. Often from the very people who next day can’t remember that they even wanted to buy something the day before.

You are not one of those? Of course. But for the Seller the Contract with Proof of Funds and Earnest Money Deposit is the only way to know that you are serious.

So that you know, all these documents have to be provided to you and it is spelled in the Contract. So when you have a signed offer, which is a Contract, then you have the right to get all these docments. You would also have the Seller give you the statement showing his rental income. He will have to give it to you, not to me.

What important to me is real estate part. The location (Location, Location), the view, the value compared with other units on the market today, the value compared to the highest there was, and the value I expect the highest to be.

I do not sell rental income, it is not my business. And I do not know how big it is.

Photo by dullhunk via Flickr.com