As the North American market experiences a dip in home values, many condominium owners are struggling to keep up with the mortgage payment for property bought at inflated prices. This means that across Canada and the United States, there are a plethora of foreclosed cheap condo for sale. While these items may seem like the ideal, low cost assets for the savvy home buyer, there are a number of factors involved in the purchase process. Within this article, we’ll look at four keys to successfully purchasing a foreclosed condominium
1) Does the Building have a Stable Homeowners Association?
When purchasing a foreclosed condo, this is the first question prospective buyers should ask the homeowners association for that particular building for information concerning the property’s status. If more than 20% of the condominium owners in the building are behind on their mortgage payments, banks are unlikely to provide a loan to new buyers who wish to buy property in that building.
2) Bring a Contractor with You When Viewing the Property
Foreclosed properties are generally sold as-is by the bank. This means that they could be in a state of disrepair as the previous owner of the condominium must have been going through some sort of financial difficulties which resulted in them being unable to pay their mortgage. Likely, if their mortgage payment was unpaid, they wouldn’t have had the funds to pay for any major repairs that the condo required. By bringing a specialist repair person to the condo before you purchase it, you can factor-in any maintenance costs into the overall budget for the purchase, providing more scope for overview when making your purchase decision.
3) Speak Directly to Residents
Residents of the building, especially those that have been there for number of years, will be able to provide you with a wealth of information concerning the quality of the building and how much work the homeowner’s association puts into administration and overall maintenance. This can often be one of the leading sources for direct information about the building itself, and provide you with an unbiased opinion from someone who has direct experience of day-to-day life within the condo. For a truly unbiased opinion, you may wish to speak with two or three residents in order to gauge their opinion on the value of the property.
4) Be Proactive When a Great Deal Becomes Available
When you notice that great deal, don’t be afraid to immediately book a viewing for the property. Banks are usually very willing to sell the foreclosed property quickly and therefore the proactive buyer can achieve an outstanding deal by being the first to show a real interest. It is important to remember to be wary about those properties that seem like a great deal but have been on the market for a few months or more. The longer the foreclosed property has been on the market, the higher the chances are that there is either structural damage to the property or the condo building itself is in financial difficulties that may prevent purchase financing.
The Best Deals Are Found By Those with an Eye for Details
Investigating each aspect of the foreclosed property before you make your decision to buy is the ideal way of getting a superb return on your investment. Because sometimes, those bargain basement condos aren’t always the great deal they appear to be on paper.