4 Questions To Ask If You Are Listing A Condo

As a listing agent it is your responsibility to be well informed and one step ahead when it comes time to list a property.  This is especially true when it comes to listing condominiums.

Ask Before You Take The Listing

By asking the right questions BEFORE taking the listing you can help manage the expectations of the seller.  Depending on how the questions below are answered by the management company, can determine how the unit can be financed and in some cases, if it can be financed.  A good buyer's agent will ask you these questions before they have their buyer make an offer.

1.  How many units are over 30 days delinquent?  In our current economy this is probably the most important question you can ask.  Fannie Mae guidelines state that no more than 15% of the units can be delinquent on their monthly condo dues.  Yes, there are exceptions, and you can ask for an exception, but the guideline is 15% for FHA, VA and Conventional financing.

2.  How many units are owner-occupied? In order to comply with Fannie Mae regulations, a condo building must have at least 51% of the units occupied by owners.  Fewer than 51% means that the building cannot be financed through a Fannie Mae backed loan.  Higher than 51% may mean you are looking for an all cash buyer.

3.  Are there any special assessments?  Special assessments should be disclosed to the buyer's agent so their buyer can determine whether or not they can afford the property.  Finding out about a special assessment at the eleventh hour can cause a loan to be rejected because the monthly mortgage payment, plus the condo fee, plus the special assessment equals a payment that is out of reach for the buyer.  Better to know about this upfront.

4.  Is the Condo Association involved in any litigation mediation or arbitration?  The lender definitely does not want to loan money in a building where there is pending litigation.  It would be difficult to imagine why a buyer would want to buy in such a building.

When financing a condo, the lender is not only approving the buyer, but they are also approving the building.  These are all critical questions that need to be asked of the seller or of the condo management company, in advance.  By being pro-active you can save all of the parties involved a great deal of time, energy and stress.

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