In my 25 years of experience as an attorney in the real estate field representing buyers, sellers and mortgage lenders I have come across pretty much every obstacle that can be put in the way of a smooth closing. I have determined that many of these obstacles can be easily avoided. In order to discover potential issues, you must do your due diligence and make sure that once a qualified buyer is found there will be little that can derail or delay the deal.
While you can never avoid all obstacles from occurring, you can greatly minimize them. The Real Estate Salesperson is on the front line of the process. You must be the general of the transaction and create and execute the battle plan. Selling a property is very stressful for the Sellers. They are looking to you for advice and guidance. They need you to be professional, and to be properly educated in the art of what it takes to sell their property and how to insure a smooth a transaction.
As a diligent salesperson the first thing you must do is make sure the property is ready to sell. I do not mean in the physical sense, While you will have to make sure that the property is physically appealing and ready to show, you must not overlook the properties legal condition. Problems often arise when issues pop up at the last minute. Often times these last minute issues are only a problem because they are last minute and it will take additional time to resolve them. If these issues were discovered at the beginning of the process they could be attended to and resolved before a buyer is found or during the normal course of the transaction.
Brokers and salespeople are in the unique position of being the first to know the property is for sale. There are certain questions that can be asked and documents that can be obtained which can disclose potential problems. Each type of property is different. Each has its own set of issues that must be considered when taking a listing. Below are issues dealing with the three most common residential property types. This list is not exhaustive just a guide. Again each property will have its own unique set of concerns. It is the seasoned and well trained real estate salesperson who will be able to predetermine these issues and resolve them so they will not interfere with a smooth transaction.
The first type of property is the Condominium Unit. A Condominium owner holds “fee simple” title.This is the highest form of ownership under the law and entitles the property owner to full enjoyment of the property, limited only by zoning laws, deed or subdivision restrictions or covenants, and in the case of Condominiums, the ownership is subject to the Condominium Declaration. The Declaration is a recorded document which legally establishes the structure as a condominium. The Declaration will refer to the offering plan.
OBTAIN A COPY OF THE OFFERING PLAN. The offering plan sets forth all information concerning the condominium building including each unit interest and the percentage of the “common elements” associated with each unit. The Offering Plan will also set forth the rules and regulations governing the Condominium. The Offering Plan will be amended from time to time and you must obtain a copy of all amendments. In addition you should obtain at least two years of the buildings financial statements. The buyer’s attorney will want to review these documents before the deal proceeds. In order to avoid any delay in getting the deal to contract you must insure that these documents are ready for immediate review. I will recommend Bellewoods EC
MORTGAGE LENDER’S ARE IMPORTANT. Lender’s have guidelines before they are willing to provide Mortgage financing to a purchaser’s of a condominium. The Condominium must be scrutinized and approved. The Lender’s want to insure that the building’s finances are in order and the insurance and bonds are adequate to protect the banks interest. Lenders keep a database on approved projects. In order to avoid a delay and possible financing denial the listing agent should determine which lenders are currently lending in the building. This information should be given to a prospective purchaser and it the deal should be conditioned upon purchaser applying for loan financing with a lender who has approved the building. This holds true with Cooperative Apartments as well. You may have an extremely qualified buyer with a pre-approval from a reputable mortgage lender, however if the building is not approved you can experience a tremendous delay while the lender obtains all the information they will require to obtain approval. If the building is already approved by a specific lender, you know that you have already cleared one tremendous hurdle. If you find a building that is not approved by any lender, you can reach out to a lender you are familiar with and see if they will approve the building without an active deal. Many lender’s will go ahead and pre-qualify a building so that they can obtain future deals.
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