There are many steps to financing a condo purchase when times are good. In today’s market when things are not so hot, there are even more hoops to jump through. Just as you want a highly competent medical specialist and a world-renowned hospital when you are sick, you need a highly competent mortgage broker and a mortgage company with realistic underwriting guidelines in challenging real estate markets.

What prompted this post is a closing that took place yesterday…over a month after the original closing date. The reason was the mortgage company…and not necessarily the mortgage agent! By the way, the buyers put 20% down, had exceptional credit scores, and both husband and wife have well-paying jobs!

Three Steps to Stress-Free Condo Financing

1. Assuming that you have secured the services of a competent real estate agent, seek the agent’s guidance in selecting a mortgage provider. An experienced agent will know which companies are “condo friendly” and which agents have the best track records.

2. Use a mortgage provider that has provided mortgages in the condo complex where you buying. On Cape Cod, some of the local financial institutions are better bets than those with off-Cape underwriters. 

3. Use a local mortgage agent who is familiar with the area and the condo complex. Since they have already jumped through hoops for previous clients, they will know how to guide you through them for your closing.

Maybe “stress-free” is a bit of an overstatement, but if you follow these three steps, your purchase will be a lot less stressful.

A maintenance reserve:  What an idea!

 In the midst of our country’s major financial crisis and with daily news casts about both public and private credit debt, it is refreshing to see a condominium community that has wisely put money aside since its inception.  So while other complexes defer projects due to a lack of funds, FalmouthPort in Falmouth, MA just goes on about its business.

FalmouthPort is a waterfront condo community on Cape Cod.  Since it was built in the late 1970’s, the Association Board with its current professional management company, the American Properties Team, have managed the property in a highly professional manner. 

 Three points need to be highlighted:

1. The Board knew from day one that even though the complex was new, the day would come when repairs would be needed.

2. A Long-range Repair and Replacement Plan was adopted, and money (a maintenance reserve fund) was set aside .

3. The funds were invested conservatively.  When stocks were rising wildly, the fund did not grow as fast as some would have liked.  When the market tanked, however, the fund was barely touched.

What spurred this entry?  Today the main road was repaved.  No, there was not just a top coat applied; the old road was removed, and a new one put in its place. 

  And most important: there was not a special assessment.

We received news on Friday that at least one local Cape Cod lender, Cape Cod Five, is reinstituting 90% loans for second home buyers. (NOTE: Contact Meryl Watson for details: mwatson@capecodfive.com). This was made possible because no title insurance companies would insure more than 80% loans but now at least one company is willing to offer the coverage.

95% Financing is Available for Cape Cod Condos

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*Absorption Rate: The number of months that it would take for all Falmouth condos presently on the market to be sold. A balanced market is around 5 months.

Here are some Falmouth Real Estate  statistics by price range: 

Cape Cod Real Estate Positives:  

1. The fact that the number of Cape Cod condos listed for sale is down 11% is a good sign.
2. The absorption rate is also down.

Cape Cod Real Estate Negatives:

1. The average sales price is down 10% from the same period a year ago (2008: $407, 812; 2009: 367, 576).   
2. In the past six months, 53 Cape Cod Area condos have come on the market while 22 have been sold. 

Conclusion: The continued downward pressure on sales prices means that the Cape Cod home buyers market continues.

Until next time,
Steve

The downward pressure on the sales prices of Cape Condos continues as the challenges of getting financing continue.

Buying a Cape Cod Condo

The very same condo that I mentioned in May had a new buyer and a new lender and fell apart again at the last minute. This time it was about the buyer’s income. Needless to say, the bank (in this case Citizens Bank) had preapproved the buyer, received all the information requested in a timely manner, and gave no indication of a problem until the day of the final commitment when they issued a “declination letter.”

Another condo in a very well managed, well funded complex that has never had a special assessment, is under agreement with a strong buyer. The buyer is putting 20% down. Yesterday, the date of the final commitment, the lender (Provident) could not meet the original commitment date because their underwriters are backed up. The commitment is now due next week. Stay tuned.

You Can Buy A Cape Cod Condo At A Great Price

Needless to say, this continues the downward pressure on condo prices because buyers are reluctant to get involved.

On the bright side, however, I do have a closing today on a very nice Cape Cod condo. Bank of America is providing the financing for this one.

Until next time,
Steve

Selling Cape Cod Real Estate

We recently had the sale of a condo at Sea Oaks in Mashpee, MA fall apart over the condo association’s refusal to answer four questions that required an opinion or judgement.

Working With Cape Cod Home Buyers

The mortgage provider had sent a form to the association’s management company, American Properties Team of Woburn, MA. American Properties provided a comprehensive form of their own that provided in-depth information but failed to answer four questions. Neither the lender nor APT would budge.

What an Expert Cape Cod Real Estate Agent Can Do For You

There are several questions that I am attempting to get answered:

1. Can a condo be purchased with an FHA backed loan at a property managed  by APT or any association whose attorneys refuse to allow them to answer questions requiring an opinion? (i.e. Is the maintenance reserve adequate?)

2. Do all lenders use the same form?

3. Which lenders will accept the pre-prepared form provided by the association?

I will keep you updated.

Until next time,
Steve

Falmouth Home Buyers Are In a Great Position

Some startling statistics show that it’s a great time for anyone to be a Cape Cod condo buyer in Falmouth (MA). This is especially true what with the ample Cape Cod real estate inventory that is still growing. That means Cape Cod sellers are usually more flexible. With mortgage interest rates at historic lows, it could entice more condo buyers to emerge from their winter hibernation.

What Does This Mean to You as a Cape Cod Condo Seller?

Since there have been more Cape Cod condos coming on the market than have been sold, there is still downward pressure on prices and the inventory remains high. Condo buyers are clearly in control and will stay in control until there are three consecutive months with more Cape Cod residences being sold than come on the market. The key to selling your Cape Cod condo in this market is to price the property correctly.

What’s Your Feedback?

Leave a comment and tell us what you think.

Until next time,
Steve

Living in Cape Cod

You’re probably asking yourself, “why in the world would comedian Ray Romano  consider buying a luxury condo in Cape Cod?” First of all, Mr. Romano is no stranger to Cape Cod. As a matter of fact, Mr. Romano was the Celebrity Guest Conductor for the 22nd Annual TD Banknorth Pops by the Sea concert back in 2005. Need more reasons why you might see the “Everybody Loves Raymond” guy purchase a Cape Cod condo? Take a look at my impressive list of 4 great reasons why Ray (or any celebrity for that matter) would consider buying a condo on Cape Cod:

Comedian by Day, Conductor by Night!

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