Is A Special Assessment or Cancer a Worse Thing?

Many large condo associations are facing special assessments. Unfortunately, no condo associations that I know of have enough money in their reserves. It is possible to hire a consultant that will let you know how much money a condo association will need in the future. That analysis will show that even a really good association is underfunded by as much as 80%.

There are 2 conflicting truths. First is -- that if you put $25,000 into your condo, your condo will be worth far more than the $25,000 invested. The Second truth is, not only in this market, but any market, 3/4 of the owners won't have the $25,000 to put in. With construction costs being at a low, now is the ideal time to complete much needed, deferrred maintenance. Even so, the 100 owners of a condominium complex would all rather go to the dentist than face a special assessment.

My advice is, don't let your kids grow up to be condominium managers. If you're on the side that wants an upgrade, have you entire project layed out if you want to have any chance of getting it passsed.

In our office, Kevin and Peter really have a lot of wisdom about this subject. Don't minimize the impact of cancer on a loved one or the human drama of a special assessment movement.

Short Sale Is A Dirty Word

We are now becoming experts in the arena of foreclosures. Many buyers appear that have the mistaken concept that a short sale is a great deal. A Short Sale is a negotiation with a lender before a foreclosure action has been completed. The lender theoritically would be interested in letting the property sell for less than the loan amount. In reality, some lenders are interested in a perfecting a deal at a lower amount.

What we are finding in Summit County is that lenders often won't fully negotiate on that short sale position until very late in the game. What all this means is that a buyer is far better off buying a property that has already gone through foreclosure or even better buying property from a seller that doesn't have a loan against the property that is larger than its value.

There have been 60 foreclosures in Summit County this year. 56 of them went back to the lender. That means the lender bought it for the value of their loan. In all those cases the loan amount was greater than what the property is worth in today's market.

Once the lender owns the property it becomes a REO (Real Estate Owned). Promptly that property is put back on the market through a real estate broker for an amount far less than that loan was.

Its a great time to buy a property that's an REO or from a seller that doesn't have a big loan, but avoid short sales if you possibly can because the lender doesn't negotiate very well until they have the property hanging around their neck.