I am interested in a condo in a high-rise on the beach. There are three units for sale, one on the eighth floor, one on the fourth floor and one on the first floor. The one on the eighth floor and the one on the fourth floor went under deposit in less than five days. The one on the first floor had been sitting for 80 days, most likely because it was listed for close to $30,000 over what it should have been. This was the unit that I wanted. I placed an offer, $40,000 less backed up with comps, and a cost analysis of how property was increasing over the last 10 years. We came to an agreement and my appraisal came in a couple thousand dollars higher. However my inspections showed that the sliding doors were failing and given we are in a beach setting would cost me a total of $16,000 to replace both doors if I wanted them to be hurricane compliant and in code. Also the water heater needs to be replaced and I received an estimate for $750. There were other items but they weren't big enough for me to make an issue about it. The seller would not negotiate other than giving me $1500 cash back at closing. Needless to say I was told I am the perfect buyer. With assets, no debt, a strong salary, and a credit score of 820 I have no problem getting financing. I was also putting 25% down. I was four days from closing, when it was found a litigation suit was filed by the HOA board as the plaintiff the previous week and I lost my financing and 4% interest rate and $1500 lender credit. The lawsuit doesn't concern me as I read all the details but it does look like it will carry-on for about a year. I have exhaustively searched for additional financing with no luck. I proceeded to tell my realtor if the seller would drop the price an additional $20,000 I would give her an all cash offer and a quick closing as I have exhaustively searched for additional financing with no luck. By what I understand she has rolocated and has an offer on another house contingent upon the sale of this condo however she is countering that I pay cash plus she will finance the last $20,000 at 4 1/2% which I am not willing to do. Is there any other negotiating tactics or should I just walk away? I love the property, but I am hating the headache and feel this deal is not worth any additional money. The seller in my opinion has been unreasonable from start to finish.
Updated 3 months ago
Thank you both for your responses. The unit is technically on the second floor (over covered parking) with a good view just not the "supreme view". :) The seller came back and took our reduced offer and we are pleased. I honestly didn't think she'd take it given it was 10% below appraised value but she did. Thanks for your input. We definitely learned a lot with this particular purchase.
It depends if you are willing to risk losing the unit, or not.But likely they will come around, as their agent I’m sure has explained to them about the financing issue with the hoa being in litigation, particularly if they really need to sell in order to buy the other property.
@Tara Griggs Many banks will not finance a condo unit while there is on-going litigation on the part of the HOA. It seems like this may have been the reason you lost your financing.
You should realize that there aren't that many cash buyers out there that are willing to throw down 100% cash on a condo. So you have a lot more negotiating power than you think. Additionally, it sounds like the seller is in a bind, as her other deal can't close until she sells. Finally, you are buying the non-view unit presumably, which may be harder to sell period. I would threaten to walk completely unless you get a 10% price reduction for paying 100% cash. But I guess it depends on how bad you want the unit...
Thank you both for your responses. The unit is technically on the second floor (over covered parking) with a good view just not the "supreme view". :). I posted my update above...they took our reduced offer. Didn't think she'd do it but they did.
Shop around, you can get a non warrantable condo mortgage so you don't have to close with all cash still. If the litigation is really unrelated as you say, the rate can be competitive with conventional mortgages.
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