Condo-izing two-family ... below market rate?

Asked by Sarah_bennett-astesano, Cambridge, MA Mon Sep 19, 2011

My mothers owns a two-family home. We live in one unit. She's considering condo-izing it so that we could buy one unit. Advantages: we get advantages of home-ownership, she gets increased income over the low rent we pay her now. My questions: what's involved in condominiumizing in Cambridge; and what are the regulations surrounding the sale price she sets?

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4
Nichole Book…, Agent, Cambridge, MA
Mon Sep 19, 2011
To really understand everything that is required to condo a building, I would recommend that you contact The City of Cambridge as well as a real estate attorney. The price of a property is based off of the market value set by recent sales within 6 months for a similar property. You could also have an appraisel done, which would be required if you needed a mortgage to purchase the property.
Good luck! Nichole Bookwalter
1 vote
John Dean, Agent, Boston, MA
Thu Nov 3, 2011
I have to say that Nichole Bookwalter and Liz Boltons answers are spot on. I think you should truly look at the the opportunity and the costs associated with condexing the home. In the long run it may make sense. As far as the sale price as agents we see transfers of property between families for $1.00. Granted the city of Cambridge will tax on the value of the home.

Steps:

*Consult an accontant
*Check with the town
*Select a real estate attorney to draw the condo paperwork & handle the property transfer
*Select an architect for floor plans
0 votes
Dennis Joseph, Agent, Cambridge, MA
Mon Sep 19, 2011
Hi Sarah,

I have an information sheet which provides all the details of condo-ing a property. If you would like me to send it, please send me your email address.

As others have said, a seller can set whatever price they want—there is no government authority which oversees prices. However, if you are getting a mortgage to buy the property, it will be appraised by your lender before the lender commits to a loan. If the appraisal is higher than what your lender feels is 'market value', you will be required to come up with more cash down payment or perhaps reach agreement with your mother for a lower price. Otherwise, the lender will not make the loan.

Thanks,
-Dennis
617-576-3802
Dennis@DennisJ.com
Web Reference:  http://DennisJ.com
0 votes
Maureen Ocon…, Agent, Cambridge, MA
Mon Sep 19, 2011
Hi Sarah,
There are no regulations regarding sale price...the marketplace dictates that and past sales. To condo a home...an attorney is involved & guides the process. The important first step is to have a Comparative Market
Analysis to understand the value as a two family & value as condos. This will help your Mother decide if it makes sense financially & for life style.
I have helped homeowners condo their home many times and would be happy to meet with you and your family to talk about options. I would preview the property and then prepare an analysis of your Mother's home.
Then I would present the results and answer any questions or concerns. There is no charge for this service.
I would be happy to talk and meet with your family, Sarah. If you have any questions, please call me at 617.715.9225.
Regards,
Maureen
Maureen O'Connell ABR,CRS,SRES,100% Club
Broker/Realtor
RE/MAX Destiny
D 617.715.9225
maureenoconnell8@gmail.com
0 votes
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