When buying a condo in Olympia, WA the biggest question is whether or not a lender can provide a loan. Not only does the buyer need to qualify for a loan, but so does the condo complex.
Listing agents, buyer’s agents and buyers should ask these five questions to help determine if the buyer’s lender can offer a loan.
1) What is the owner-occupancy rate? What is the ratio between owner-occupied units and renters? Lenders like to see high owner-occupancy rates because an investor is more likely to default on his secondary properties than his primary property.
2) How many owners own more than one unit? You want to know if there is one owner/investor who owns several units. For lending eligibility, typically one investor cannot own more than 10% of the units.
3) What is the delinquent rate for monthly dues? How many owners are delinquent in paying their monthly fees? This puts a strain on building and maintaining the condo reserve account, and additional fees can arise for condo owners if the association pursues legal action to collect the delinquent fees.
4) Is there any pending litigation against the association? There could be liens put upon the units and potential special assessments charged to condo owners to pay for legal fees.
5) How much is in the reserve account? Typically, lenders would require there are 10% in reserves set aside in the condo budget for maintenance. For the condos in Olympia, WA, this has been the most common challenge in obtaining a loan.
If you are a buyer or a Realtor, be sure you get these answers and then speak with your lender. Your lender will be able to determine if the condo complex is eligible for a loan. Not only does the buyer have to qualify for a loan but so does the condo complex.
Check out condos for sale in the Olympia area by using the map below! And if you’d like buy a condo, call me today!