Why condos aren't easy

It seems that it should be easy for a Realtor to sell a condo or townhouse, no? After all, they cost less than houses (in some areas), the inspections are easier, etc. etc.  But no.

There are two reasons for this: First, most lenders need home owners association financial documents and the HOA management companies can be all over the map with competence.  Some are super-professional and get docs out right away.  Others...just aren't as heads up.  You'll have to beg for documents to be produced, pay rush fees in advance, etc.

The second reason is the lenders themselves, especially the big banks like BofA, Chase, Wells, etc.  Yes, I know their interest rates are better than mortgage brokers' rates now, but they have very tight underwriting standards and restrictions.  And when they do get what they need, it usually sits on somebody's desk for a few days before it gets processed.

So if you're buying a condo or townhome, make sure you're on top of your lender and the HOA management company.  And allow extra time for the escrow to close.

Another short sale fail. This time, it wasn't the bank's fault. And there's a moral to the story, of course

This is 1200 Flores in West Hollywood.  It is up the street from Marix, the fun and famous Mexican restaurant.  My buyer client lives in one of the units and learned early in the year that it would be short-saled.  We submitted an offer as soon as we could -- in April -- and went through the normal short sale waiting (and waiting) period.  The sale was approved in August.  Yay!

However, because the sale hadn't been approved, the listing agent didn't order the documents that the lender needed from the home owners' association until the approval was received.

Fun real estate fact: in addition to buyers, lenders need to review home owners association documents.  They don't want to fund loans on units in buildings with lots of "distressed" (short sale, foreclosure) units, they want to make sure the reserves are adequate, etc.  And they don't want to make loans on buildings with litigation because, obviously, a negative outcome can affect the financial health of the HOA.  

Okay, the documents are ordered and it turns out there IS litigation on the property.  The buyer/tenant had no idea.  Getting info about the lawsuit was like pulling teeth.  The HOA management company wasn't too interested in talking to the lender or me, the listing agent wasn't interested in assisting us, and the HOA president didn't understand the seriousness of the problem.  The lending machinery came to a standstill.  We tried lots of stuff, but couldn't get the litigation to settle.  The listing agent pulled the plug on us last week as he has cash offers and doesn't want the bank to foreclose (in fairness, he had given us extra time to get this sorted out).  After six months of agony, my buyer is content to let this set sail.  He still lives there and will be living there for the time being.  So, no loss, except for many hours and our tolerance for this process.

Moral of story: if there's litigation on a condo complex, even if it's up the street from delicious Mexican food and margaritas, run the other way!

Home owners association meetings -- what really happens

Have you ever wondered what goes on at an HOA meeting? I bet you think it’s all wonky budget review and discussions of how to beautify the complex over coffee and cookies. Good laughs all around and concensuses reached, right? Think again. Here’s an edited version of our complex meeting last week. Names changed to protect the inane innocent.


President: We need to discuss upcoming repairs.

Interrupter #1: The hot water is too hot.

President: That’s because we just had the recirculating pump replaced. Remember when we had no hot water at all?

Interrupter #2: I never noticed; I only take cold showers.

Interrupter #1: The hot water is too hot. A toddler could get burned (Note: no toddlers live in the complex)

President: The stolen metal garage grates need to be replaced and we have quotes here.

Interrupter #1: Let’s just get plastic grates made and painted to look like wood, sort of like they do at Disneyland. Cars can roll over plastic grates, right?

Interrupter #2: We need to put up fake security cameras so nobody will steal them again.

Vice President: But people still steal from 7-11 all the time and they have real cameras.

Interrupter #3: I have a “sniper” sticker on my car and an NRA sticker in my window.

Interrupter #4: What kinds of guns do you have? (Long digression about preferable guns ensues. Several residents appear to have a survivalist streak and we all discover that the complex is extremely well armed).

Interrupter #2: The dumpster area is too dark and I can’t take out my trash anymore.

Vice President: There are several hours of daylight every day wherein you can take out your trash.

Interrupter #2: We need a better light over the dumpster.

President: I’ll have the management company get a quote. Now, back to the grates…

Interrupter #1: We have a lot of new bugs around. It’s probably because nobody is taking out their trash because the dumpster area is too dark.

President: What do the bugs look like?

Interrupter #1: They are long green things with many legs. They look like centipedes, but are not. They are probably here for the garbage.

Vice President: Those are caterpillars. They will turn into butterflies and fly away, and it will be beautiful, just like in the 1960’s…

Interrupter #2: Somebody peed on the garage gate.

Interrupter #1: It was probably a coyote.

Interrupter #2: No, it was too high up for a coyote. I’m tired of the building being attacked. We need fake security cameras…

The meeting went on just like this for another 30 minutes. The interrupters continued to interrupt, but eventually repairs were discussed and a sort-of consensus was reached. Stay tuned for next month’s updates from our complex. Here’s hoping all HOA members either bone up on Roberts’ Rules of Order before then or take their meds.