Home Selling in 60645>Question Details

Kat, Home Seller in 60645

can you sell a 5 flat in chicago that has building violations and can the person take out a mortgage on that building?

Asked by Kat, 60645 Fri Nov 20, 2009

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6
It depends on whether the violations show up on the title report. If they do, then most banks will not allow their buyer to purchase. If they don't, the bank won't object because they don't know about it.

The information in this answer provided by Attorney Ranj Mohip is general information and is not intended as legal advice, nor does the attorney intend to create an attorney-client relationship with any reader by answering this question or otherwise contributing as a member of Trulia.com.
3 votes Thank Flag Link Sun Jan 9, 2011
As other have mentioned, yes you can sell anything. Whether or not a buyer can get financing will depend on the violations and whether the lender knows about them. Have you just received a violation notice or is there an active Housing Court or AH case? Is there a RULO or other consent decree on the property?
If the violations aren't substantial, the lender may just want an escrow for estimated compliance costs. If major the violations could easily kill the deal for anyone but a cash buyer.
I'm a little leery of this question and the violations. A '5' flat is not 'normal' in Chicago. Yes, legal ones do exist but it is definitely not the norm. My immediate thoughts are whether the 5th unit is an illegal conversion and if the outstanding violations have anything to do with that.
We provide jargon translation services, compliance consulting for City violations and Housing Court / AH assistance. Feel free to give me a call. Good luck
Markus
Web Reference: http://www.aic-chicago.com
0 votes Thank Flag Link Mon Jan 10, 2011
You can attempt to sell anything, but the financier's the banks will probably not allow it to happen without either the seller or you the buyer paying off the violations especially if the violations are considered serious. Banks are backing down on risky investments without some guarantees such as good to great downpayments (20% or more); very good credit (700's); and deposits on hand (reserves) that demonstrates that you can make monthly payments and a sound employment history.

I'm not a lender but I know lenders and have studied the issues. If this doesn't work out and you seek another property, I would advise you to work with a realtor if you do not have one. If you need one, contact my team any day of the week. I would love to work with you so you can be a successful investor of Real Estate!!

Harold Arnold/Marcella Cohen
Realtors
American Invsco Realty
A/I Realty Team
312.523.8174
http://ChicagoCityHomeSales.com
0 votes Thank Flag Link Mon Nov 23, 2009
Possibly, but in this market probably not. It depends on what the violations are and the strength of the buyer....down payment etc. If the building is not habitable, then no. This is a commercial loan. If you do not have lenders, let me know and I can refer a few to you.

philip
0 votes Thank Flag Link Fri Nov 20, 2009
Kat,

Sure. It all depends on the strength of the buyer, and the nature of the violations. You would have to disclose the violations to the buyer, and the lender for the buyer may require that the violations be addressed as a condition of funding. They may want to fund the loan with a construction escrow for the repairs. Because it's five units, the buyer will likely pursue commercial financing.

Obviously, the violations will pose a problem for you in that the value of the property will be reduced.

Best of luck

Wayne Beals
Keller Williams Chicago Consulting Group
312-77BEALS
312-772-3257
wbeals@kw.com
0 votes Thank Flag Link Fri Nov 20, 2009
Yes, to both questions....unless the code violations make the property inhabitable as far as the city is concerned.
0 votes Thank Flag Link Fri Nov 20, 2009
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