By Scott Shoji, September 9, 2019
By Scott Shoji, September 9, 2019
A hearty congratulations are in order to my client, Joel! He recently completed his purchase of a condo in the Civic Condominiums.
Joel came to me as a Living Room referral when I first made the move to Living Room Realty. We spent the next few years touching base until the time was right for him to fly out and take a look at some condos that he was interested in. He was coming from Arizona, had a realtor in his family, and was hoping to go with VA financing in his purchase. Joel works in logistics, and if ever there was someone who was made for that industry, it is him. He was perhaps the most organized client I have had and was on top of things before they even came on my radar. When he flew into town for a week, we toured over 30+ condos in the close-in Portland area. New, Old, Large, Small, Parking, No Parking, Converted Apartments, New Construction…we saw it all. So when it came time to make an offer, Joel was ready, able, willing and informed. We went into contract on a home that was a converted building off of NW Overton. It was small, quaint, and charming. The downside…not VA approved. Thankfully Joel had enough down to switch to a conventional route. We made an offer, went into contract after some negotiations, conducted our inspection, and were ready to finalize the sale.
A quick word about condos. The most important thing I can emphasize is an evaluation of the condominium documents to determine the financial health of the HOA, the potential or existence of any special assessments/litigation and how the building as a whole is holding up through the years. Does the HOA have a plan to replace systems as they get older? Have they budgeted for those in their reserves? Are they conducting an any reserve study to forecast these items. Other big items are, what type of financing are you using? VA? FHA? Conventional? It matters. A condominium building has to be FHA or VA approved to use that type of financing. If it isn’t, it can change, but the lender has to work with the HOA and it could take several months for that approval to happen. Most Sellers do not want to wait that long, so it behooves a Buyer using either type of financing to know the pros and cons of what happens when they find a property that may or may not be approved for them.
During our inspection of the condo docs, we discovered the HOA had to take out a loan to replace a failed fire escape and a special assessment was passed on to the owners of each unit. There was roughly $10,000 to pay off for this assessment. We began to negotiate having the Seller address that as a part of moving forward with the transaction. Then the appraisal came back…$10,000 under our agreed contract price. We debated whether to appeal the appraisal or not with some new information or not, but ultimately it was too much of a risk for Joel to take on and he decided to walk away from the property.
Within a day, another unit had come on his radar and the best part of it was the building was VA approved at the Civic Condominiums. Joel had left town already, but he had checked out the area it was in prior to leaving town and asked me to do a Facetime walkthrough of the unit with him. Technology proves it’s worth once more. With the building being VA approved, this allowed Joel to get a rate of almost a 1/4 percentage lower than a convention rate, allowing him to up his purchase price, in a newer, larger condo. We came in with a strong offer, put it under contract, and things moved rapidly from there. Joel officially closed yesterday and I had the honor of handing him the keys to his new home and got to watch him see it in person for the first time. This is the stuff I work for and is what makes what Ido more rewarding than anything I could imagine. Now he can sit back, look out his window overlooking Providence Park and take in a Timbers or Thorns game from the comfort of his living room.
Congrats Joel, I hope you truly enjoy your home in Portland. Welcome to the City!