House selling DUST

[amc80]

Can I get some PS dust?

I bought my condo back in 2009 at the bottom of the market. While living there, I met future DH, got engaged, married, and had a baby. We lived there until a year ago when we were just too cramped. It has been rented out since that time.

Right after I rented it out the market started going crazy. Prices are up about 30% year over year. A coworker was looking for a house last spring and put an offer on one that was 5% over the asking price; the house had 29 other offers. It's definitely a bubble and I want to take advantage of it. I foresee prices dropping in the next few months, due to both the new financing laws and the new development that has starting in the area.

The condo was listed on Friday. As of today, there is one offer and another one is expected today. I would love to sell to an investor so my tenant can stay, and the offer that is expected is an investor. Hoping for a bidding war.

Dust please! Also, I've never sold a house before, so any advice on the process is appreciated.

 

[iLander]

DUST, DUST, DUST TO YOU!

Make sure the contract says "property is sold as-is, where-is" somewhere in it. Not a big deal for a condo, but for a house it keeps people from whining later.

About a year and a half ago, I posted that "now is your last chance to get a deal" and everyone scoffed at me. I think the market will level off, but I don't think it will go down. I think there will be more supply coming to market, and that will cause the leveling off. There's a weird hysteria just now in some markets. We also bought in 2009, but I wouldn't be a buyer right now if you paid me.

 

[amc80]

DUST, DUST, DUST TO YOU!

Make sure the contract says "property is sold as-is, where-is" somewhere in it. Not a big deal for a condo, but for a house it keeps people from whining later.

About a year and a half ago, I posted that "now is your last chance to get a deal" and everyone scoffed at me. I think the market will level off, but I don't think it will go down. I think there will be more supply coming to market, and that will cause the leveling off. There's a weird hysteria just now in some markets. We also bought in 2009, but I wouldn't be a buyer right now if you paid me.

Thank you!

And you were right about your warning. It's crazy- in September of 2012 my condo was worth right around what I paid for it. By the following June, it was up to where it is now. Prices peaked in June and have held steady, although properties are staying on the market a bit longer. Nevada was #1 for foreclosures up until last year. I think we are ALL the way down to #2 now. Builders bought up tons of land during the craziness leading up to the crash, and then it all just sat. Suddenly, it is all being developed. Supply is going to flood the market and I don't see how these prices can stay where they are, but who knows.

 

[Dee*Jay]

Huge buckets of real estate dust coming your way AMC! I wish you a good deal and an easy close!

 

[amc80]

Can I get some more dust? We were supposed I close on Friday but it got delayed until today. As it turns out, there's some random legal opinion/letter the lender wants from one of my HOAs. The HOA is saying that doc isn't something they have ever been asked for and aren't required to provide on demand (which I agree with). What a freaking mess.

 

[Dee*Jay]

I'm so sorry to hear about the delay!

Is the document by any chance related to the right of first refusal? I've had that come up in a few deals and since it's very infrequently requested HOAs don't know how to process it. Whatever the document is though I'm sure it will get figured out and you'll be back at the closing table in no time!

 

[amc80]

I'm so sorry to hear about the delay! Is the document by any chance related to the right of first refusal? I've had that come up in a few deals and since it's very infrequently requested HOAs don't know how to process it. Whatever the document is though I'm sure it will get figured out and you'll be back at the closing table in no time!

That is exactly what it is! Funny that you knew exactly what I was talking about. Is that one Fannie Mae specific? My escrow coordinator had never come across it.

 

[Dee*Jay]

I don't think it is Fannie Mae specific (but don't quote me on that because I'm not 100% sure). Some declarations and bylaws stipulate that the association has the right of first refusal in the event of a sale but a lot of associations completely ignored this until foreclosures became more prevalent. Then a lot of associations did start buying the units at the lower price and reselling them at market rates. I assume what the lender is asking is for the association to confirm that it either (a) doesn't have a right of first refusal, or (b) is not going to exercise that right if it does exist. This should be an easy thing to get signed off so hopefully someone will do it for you pronto!

 

[amc80]

No, it's not Fannie Mae specific. Some declarations and bylaws stipulate that the association has the right of first refusal in the event of a sale but a lot of associations completely ignored this until foreclosures became more prevalent. Then a lot of associations did start buying the units at the lower price and reselling them at market rates. I think was the lender is asking is for the association to confirm that it either (a) doesn't have a right of first refusal, or (b) is not going to exercise that right if it does exist. This should be an easy thing to get signed off so hopefully someone will do it for you pronto!

Thanks for clarifying! I really hope someone can get this figured out. I also love how they waited until 1pm on the day of close to realize this was needed.

 

[Dee*Jay]

I edited my post to say I don't think it's FM specific, but I don't want to say that without being totally sure.

Anyway, yes, you have hit upon my BIGGEST pet peeve! WHY WHY WHY do mortgage companies wait until the closing date is right there to dot the "I"s and cross the "T"s? Even with my own mortgage that closed on Feb. 3 the lender didn't confirm my employment until the day before the commitment was due (and I'm convinced they only did it then because I badgered them). Seriously, if *I* ran a mortgage company my clients would be SO happy because I would have everything done ahead of time. None of this last minute crap!!!

 

[amc80]

This is so frustrating. I have the opinion letter requirements in front of me so I can be a bit more specific and see if it's the thing you thought it was. It's an "Attorney FNMA Warranty/Opinion Letter" and it lists out a bunch of legal requirements. The requirements include Compliance with Laws, Limitations on ability to sell/right of first refusal, Amendments to Documents, Rights of Condo Mortgagees and Guarantors, First mortgagee's rights confirmed, and Unpaid dues.

The HOA is saying they've never been asked to do this. The HOA's lawyers are saying they've never been asked, either. But the lender is absolutely requiring it.

ETA- This is the form that goes with the letter. It looks like it is FM specific-
https://www.fanniemae.com/content/guide_form/1054.pdf

 

[Dee*Jay]

This might be the stupidest question ever, but I'm assuming your building is FM approved? If that's the case, even if the buyer is not getting a FM loan this may still be required paperwork. And if the buidling is FM approved, do you know if anyone else has sold since getting that designation?

 

[amc80]

It isn't FM approved, just FHA approved.

I came across this and am wondering if this damn document is even needed, since the condo is considered established:

"New" Versus "Established" Projects

Established Projects
Project is 100% complete, AND
90% or more of the total units in the project have been conveyed to the unit owners, AND
HOA control turned over to unit owners
New Projects
Project or legal phase is not fully complete, OR
Less than 90% of the total units in the project have been conveyed to the unit owners, OR
HOA control is not turned over to the unit owners

Source: http://www.centurylendingrocks.com/joomla/index.php?option=com_content&view=article&id=239&Itemid=695

According to FM-

What is the lender’s responsibility for review of legal documents? Must lenders obtain an
attorney’s opinion or memorandum regarding the legal documents for new projects?

For established projects and all two-to four-unit projects, lenders are not required to represent
and warrant that the project complies with the legal requirements set forth in Fannie Mae’s
policies.

https://www.fanniemae.com/content/faq/project-review-summary-faqs.pdf

 

[Dee*Jay]

Honestly, it's probably NOT required but the lender may not move ahead without it. I come across this stuff all the time. If you can just get it done, even if it's superfluous, that will likely be the fastest end to this problem. Not a good answer, but unfortunately probably the "right" answer to getting back to the closing table quickly.

 

[amc80]

Honestly, it's probably NOT required but the lender may not move ahead without it. I come across this stuff all the time. If you can just get it done, even if it's superfluous, that will likely be the fastest end to this problem. Not a good answer, but unfortunately probably the "right" answer to getting back to the closing table quickly.

The problem is I can't get it done, the lender needs to get it from the HOA's lawyers. That is one of the requirements of the document- that the lender obtains it. So I'm really REALLY hoping they decide they don't need it.

 

[Dee*Jay]

Ohhhhhhh... Understood.

This is absurd. I feel for you; If there were a single thing I could do to help you I would. Please keep us posted.

 

[amc80]

Ohhhhhhh... Understood.

This is absurd. I feel for you; If there were a single thing I could do to help you I would. Please keep us posted.

Aww thanks, I really appreciate it.

My escrow coordinator called the manager of the processor and raised hell. Whether or not the document is needed (they think it is, now), it should have been addressed LONG ago. Not 5 hours before EOB on the day of close. That manager is now involved and hopefully getting something done.

ETA- These are currently the people involved in this cluster:
Me (seller)
Buyer
Buyer's realtor
My escrow coordinator
The title officer
Title officer's assistant
Loan processor
Loan processor's boss
HOA Manager
HOA Board President
HOA's attorney
HOA's attorney's paralegal

That's 12 people. Eight of which should know enough about this to get it taken care of. If everyone would just do the job they are paid to do it would be done.

 

[Dee*Jay]

amc, just checking in to see if you've made any progress.

 

[amc80]

amc, just checking in to see if you've made any progress.

No. The problem, as I see it, is the lender wants my HOA's attorneys to provide this letter. The attorneys have never had to write one and would have to start from scratch. But the lender is taking that as "well they aren't providing it to us." What should have happened is back when the lender discovered they needed this letter and the HOA said they don't have one made, they lender should have had their own attorney write it. But it's easier for them to blame the HOA so that's what is happening. I have no idea how this is going to turn out.

 

[Dee*Jay]

Can the lender provide a sample letter to the HOA's attorneys so the attorneys don't have to reinvent the wheel? Plus, that would ensure that everything that the lender wants in the letter is covered rather than going back and forth.

 

[amc80]

Can the lender provide a sample letter to the HOA's attorneys so the attorneys don't have to reinvent the wheel? Plus, that would ensure that everything that the lender wants in the letter is covered rather than going back and forth.

They have provided an outline of what has to be covered in the letter. The problem is the letter has to address specifics to the HOA docs. I just spoke with my escrow coordinator and she does think it will get done, it's just a matter of how long it will take. The HOA's attorneys are currently working on an estimate for time and cost.

 

[Roxy]

Can the lender provide a sample letter to the HOA's attorneys so the attorneys don't have to reinvent the wheel? Plus, that would ensure that everything that the lender wants in the letter is covered rather than going back and forth.

They have provided an outline of what has to be covered in the letter. The problem is the letter has to address specifics to the HOA docs. I just spoke with my escrow coordinator and she does think it will get done, it's just a matter of how long it will take. The HOA's attorneys are currently working on an estimate for time and cost.

I'm adding my dust in hopes that it'll help keep things moving! Good grief, this has been going on for almost 3 months?!? Crossing my fingers that the estimates (time and cost) won't be unreasonably long or high.