If the current economic crisis has taught us anything, it’s to be mindful of our financial decisions and to examine every aspect of a deal before jumping in feet first. Americans all over the nation have found themselves in difficult situations, just because they failed to weigh their options.
The Wall Street recently reported that condo boards are having a difficult time collecting unpaid association dues when tenants default on their home loans. Some associations have even resorted to “foreclosures on units already seized by banks” because they have a lien on the property. And others are temporarily renting out condos until the foreclosure goes through so they can collect the dues, which are needed for utility and maintenance costs.
Condo boards say banks have been stalling on foreclosures to keep from paying dues. However, banks say they are getting pressure from both sides: associations who want speedy foreclosures and politicians who want slow foreclosures so firms can work to modify loans.
Whatever the reason, these situations should be a reminder that it’s important to look beyond price when looking for a Chicago condo. Before the contract is finalized, due diligence is required. It’s not a good idea to buy a Chicago condo just because it’s cheap, particularly in this unusual economic climate. Below are some guidelines to keep in mind as you are looking for Chicago real estate. It may seem time consuming, but you don’t want to end up in a building with utilities that cannot be maintained due to a lack of funding.
1) Check to see if the building has a five-year plan.
2) Personally review the board meeting’s minutes from the last 6 months to a year.
3) Identify at least three similar buildings, and create a spreadsheet to determine if you are overpaying for the real estate. Your spreadsheet should contain criteria such as square footage, the building’s age and condition, views, and floor location.
4) Does the building have an outstanding loan or line of credit?
5) What is the volume of foreclosures in the building, if any?
6) Are there any residents who have not paid their condo association dues? And what is the total outstanding amount?
7) Are there any new government regulations that may impact the building’s capital resources in the next 5 to 10 years?
If you need help answering some of these questions, or want to understand more about Chicago homes for sale, please contact Chicago real estate agent Sheldon Salnick at (312) 498-5080 or [email protected]