i am looking to buy a cahill park property in San Jose (95126) under litigation.

Asked by Kssahchn, 95126 Wed Dec 1, 2010

I don't need financing. Right now the HOA is suing the builder over building defects. Does any one know about the fee structure of such lawsuit? If the HOA loses, do we have to pay huge fee for the lawsuit? Do you think it is worth it?
We are getting the property for less than $350k.

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7
Sam Shueh, , San Jose, CA
Sun Dec 5, 2010
You need to do a little math and taking a risk assessment project.
How many home owners are involved? Spread the lawsuit over these home owners divided by 12.

The key is if it is in litigation, chances that no new buyers can obtain mortgage until however long it takes which can result in a price stagnation. Most of the properties are started moving except the ones in lawsuit or having too many rentals...

Good luck with your decision.
1 vote
Bill Mccord, Agent, San Jose, CA
Wed Dec 1, 2010
Hello Kssachchn.
I would personally not touch this with a 10ft pole, and would not represent a buyer who chose to do so. My license is too valuable to me.
You are considering paying a fixed amount today and accepting an unknowable obligation at some point in the future.
There is a very good reason why Banks will not make loans in this situation. If you think you can assess the risk better than they can I wish you good luck.
Bill
1 vote
Stephen Blohm, , San Jose, CA
Wed Dec 8, 2010
Do you have an agent for this transaction? My partner and I just worked a similar situation in Milpitas?
Web Reference:  http://www.teamblohm.com
0 votes
Rudi Hofmann, Mortgage Broker Or Lender, El Segundo, CA
Fri Dec 3, 2010
Short and sweet. Listen to Bill McCord.

Happy funding, Rudi
Web Reference:  http://www.umboc.com
0 votes
David and Da…, Agent, Cupertino, CA
Thu Dec 2, 2010
Kssahchn,

The properties your talking about are in short sale situations and since the litigation is so new the banks will most likely ask for more than the $350k that your offering on the home. A good example is a unit on Cahill Park Dr. that is now short sale approved at $440k after being listed for only $350k. Keep in mind that the lowest priced transaction according to our MLS for these properties was a unit that sold for $399,950 again a short sale situation.

As for your actual question regarding the legal fees I always recommend that my clients talk with a real estate attorney before moving forward on these type of deals. A real estate lawyer could look through all the litigation papers and tell you what your liability would be if they win or lose their lawsuit. If you are going to get the unit at such a discount it would make sense to spend a little more to cover your investments.

Danielle Contreras | Keller Williams Cupertino
DRE# 01753330
0 votes
Michael Robe…, Agent, San Ramon, CA
Wed Dec 1, 2010
Hi Kssahchn,

I would contact the president or the treasurer of the HOA to get definitive answers to your questions.

The HOA can provide, per a request, copies of the claim being made for builder defects. These are commonly settled in a fair manner. If the HOA does not prevail in the case there are, obviously, legal fees that will need to be paid. In some (many) cases the HOA is insured and a portion, if not all, of the legal fees will be covered. Likely, there was a retainer paid that already covered the cost of litigation. Have you consultant an attorney? You would be better informed if you do.

Discovery requests can increase the cost to litigate and that is where you may have serious concerns. I would strongly suggest that you contact the HOA treasurer or the HOA president.

Michael
http://LosGatosHomesandRealEstateBlog.com
0 votes
Daniel Berman, Agent, Palo Alto, CA
Wed Dec 1, 2010
Before you make a decision, you need to see detailed information on what you would be getting into. These disclosure documents should be available to prospective buyers.

The possible ramifications and the question as to whether it would be a good decision to purchase this property could only legitimately be made after review and assessment of the disclosure documents. Your agent should be able to assist you with this.

NOTE: Not intended as legal advice. For legal advice, please consult with a qualified legal professional.

Sincerely,
Dan

Daniel Berman
Pacific Century Realty
Buyer Rebates to 50%
Listing Commissions as Low as 1%
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0 votes
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