Home Buying in 60639>Question Details

Sam, Home Buyer in Fort Wayne, IN

I am thinking of buying in chicago a foreclosed condo in a building with a defunct condo association --

Asked by Sam, Fort Wayne, IN Thu Jul 24, 2008

condo assosciation . Please give advice

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Proceed with extreme caution. The foreclosure part is not that unusual these days and not necessarily a reason to avoid the purchase. However, the defunct association is of genuine concern. You should find out exactly how many owners are currently residing in the building and how badly the association is in debt. Did they default on a large loan or did they disband for other than financial reasons? You would probably not enjoy living in a building without services such as elevator, lobby security, and so forth. If it is a matter of closing the clubhouse and pool until finances improve, perhaps that would be risky but acceptable. What is the trend in the building? Are the vacant units selling, which would be encouraging, or are the majority available for sale for many months without offers to purchase? You would be well-advised to seek the advice of a very knowledgeable Realtor in the area and/or an attorney to represent your interests if you proceed ahead.
1 vote Thank Flag Link Thu Jul 24, 2008
Sam,
Would you see a blind ophthalmologist? Or take singing lessons from a deaf vocal instructor? These absurd hypotheticals are on par with buying a foreclosed unit in a defunct condo association. It's just not going to work. First, no lender is going to fund the purchase. Second, even if you are paying cash you have to recognize that you are tossing money down the drain because your prospects of resale are minimal at best. Sorry, but the situation you describe sounds like a transaction that Michael Scott would pursue in the tv show "The Office." Aside from comedic effects the reality of it is fundamentally flawed.

Pursue your path boldly!

Tom McCarey
The Real Estate Lounge Chicago
0 votes Thank Flag Link Fri Jul 25, 2008
if you intend to use a mortgage to purchase this property and are not buying the ENTIRE property, you should simply walk away.

mortgage lenders want to see a functioning condo association and will require that the association provide several documents, including a "fully paid assessments" letter and some form of condo information questionaire. if the association does not exist, you cannot get the paperwork and thus, you will not be able to secure a loan.

if you are buying all of the condo units or all of the unsold units, you MIGHT be able to secure a commercial loan so that you could "step into the developer's shoes" to complete construction/renovation/sale of the unsold units.
0 votes Thank Flag Link Thu Jul 24, 2008
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