And while buying a foreclosed condo has its own set of distinct advantages, it is also rife with potential pitfalls. Unlike the purchase of a single-family dwelling where the homeowner is responsible for maintenance and upkeep, when you buy into a condo, ownership, responsibility is shared among all owners.
Joan Jensen, president and CEO of Central Credit Union of Illinois, visited ABC7 Sunday to share the ABC's of successfully buying a foreclosed condo.
The ABC's of a Successful Purchase
Assessments and Associations:
-Ask if there are any past due assessments over the six months prior to purchase.
-Find out if there are any special assessments or increases planned in the works.
-Inquire into the percent of homeowners who are behind on their assessments.
-Does the association have first right of refusal on contracts?
-Who needs to approve your purchase?
-Is maintenance up to date or has it been deferred?
-Find out the ratio of renters to owners. Most lenders won't finance purchases for units with big numbers of renters because it can devalue a unit.
-Determine if the building has been blacklisted by mortgage brokers. Even if you have cash, it is advisable to avoid these buildings.
-Have a contractor and building inspector involved early so you know the cost of any necessary repairs.
-Cash is king. Have your finances in order and money ready before you get started.
-Be prepared to move fast.
-The larger the down payments the better.