It may dangerous to your financial health. If you are thinking about buying a Metro Detroit condo in a new condo complex think carefully. The issues you have to worry about is what happens if the condo complex never gets completed? That creates financial issues for the condo association.
- The bank may foreclose on the condo complex.
- The builder may leave construction liens because contractors may not have been paid.
- Landscapers may not have been paid.
- The existing condo owners may incur higher fees because they now have to cover larger maintenance costs. If the complex has proposed 500 units but only 150 units are built. The maintenance costs of the roads and grounds now have to be divided amongst the smaller number of condo owners.
The next issue is that you may never be able to sell this new condo for many many years. Many banks won’t loan on condo complexes that are not finished. Many banks won’t make loans on condo complexes if there are association problems. If there are financial issues with the condo association a bank won’t finance a new buyer. A bank will turn down a new buyer condo loan if
- if the association is insolvent
- if the association has lawsuits or judgements against it
- if the association is not collecting enough association dues.
- if a large percentage of the condos are empty
In this rough economic market I myself would not recommend any of my home buyersto buy in a partially finished condo complex. Let me clarify this. If it is 90% I might but less than that I would say you need to look elsewhere. The reason I say this is because what is going to happen is that the builder is going to start dumping the last condos at very low prices. I had a client that bought a Taylor condo a few years back. The builder was stuck with about 14 condos. The builder kept lowering the prices to unload them. He was selling them as low as $120,000. My client lost $50,000 in value before the condo complex was done.
Can you afford to lose that much money?
Buying a Metro Detroit condo in a complex may become unsaleable (unmortgageable) in the years to come. So pick your Metro Condo complex carefully and do your due diligence carefully before buying.
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My quote of the day is:
Love makes life so confusing, but without love
would you really want to live?
~ Unknown ~
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