Hi All - curious what people would expect a discount to market value to be on a nonwarrantable condo in the Boston area? Let's assume desirable neighborhood, close to public transportation, etc but no chance of ever qualifying for standard financing.
@Jonathan Howard What's the reason for that?
@Charlie MacPherson 60% of the building is commercial
Commercial or someone owns over 10% of the association? Zipcode of property?
@Jonathan Howard I've been through that before. There was a condo in Scituate harbor that had been on the market 856 days at another agency.
With 30% commercial, I knew it wouldn't go FHA/VA/Conventional, so I approached a community bank down the street and got them to proactively look at the property and agree to a portfolio loan.
I'd recommend that same approach. Local banks and credit unions would be the way to go.
Could always try to talk to some of the local community banks or credit unions to see who would keep the loan in house/portfolio loan and put together a list of banks to be given to potential buyers. Winter Hill bank could be a good option. I have a contact there if needed. I'm sure a potential buyer would have no issue being told which bank they have to use if given a few options and the situation is explained clearly.
It's extra work/headache for a potential buyer down the road if they ever want to refinance or sell plus it could be a potentially higher interest rate and down payment requirements so this in turn should make the market price lower than typical condo prices but shouldn't be a deal killer as there are plenty of community banks to shop around. I'm thinking maybe roughly 5% lower (in a sellers market). Apples to apples if the same condo that is warrantable is selling for 500k I'm thinking this should be 470k - 475k.
@Russell Brazil I'd say currently most of the condos in this neighborhood are going with conventional or FHA financing.
@Charlie MacPherson definitely agree that small banks/credit unions are the way to go. Have talked to a few and they are willing to lend on the property, the concern is that with such a high commercial % that MI company won't insure. Having to put down 20% knocks a large portion of Boston buyers out of the game.
@Nick Foundas If you could DM me your contact that would be appreciated!
I just worked with a mortgage broker who specialized in non-warrantable condos. Happy to give you his contact information if you would like it.
A good friend just purchased a non-warrantable condo in Charlestown that went $41k above asking. I think it definitely depends on the market.
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