Larry Cragun has a Warning For [New Construction] Condominium Buyers:
A common practice is for condo developers to obtain a construction loan to build the project. Some then hire a contractor to deal with the construction and the subs. The contractor is dependent on the solvency of the developer to be paid. The arrangement is made for the bank loan to be reduced as each condo sells.
But what if something goes wrong? Sounds like a lien may show up on your place. Larry points out that people may be in this situation:
My guess is that there are a lot of condo projects that have this potential problem. I know of at least two. My proposal is, if you are a condo buyer - add a real estate attorney to the process. Be very interested in facts not words.
So which new construction project recently stalled out at 60% sales and now has liens?
Bonus link: A condo loan or refinancing soon will be tougher:
As a result of underwriting changes by giant investors Fannie Mae and Freddie Mac, plus severe new restrictions by private mortgage insurers, getting a loan on a condo unit — or even refinancing one you already own — could prove tougher than you imagined.
Popularity: 8% [?]
3 responses so far ↓
1 Leann Sparks // Apr 21, 2008 at 10:46 pm
And the winner goes to…The Parc. Major pain to deal with. Make sure your lender can handle the problem early on is my advice.
2 Matthew Warren // Apr 23, 2008 at 2:48 pm
Hmmm..The link/article suggests there’s TWO condo development with liens. What’s the other one?
How can you check on whether a new development has a lien or not? Anyone know?
Keep blogging, Matt Goyer!
3 Kathryn Mills // Apr 25, 2008 at 10:55 am
Just go to King County Court website (or whatever county website the condo is in) and check the property assessor link…. Then type in the name of the property and/or builder/developer and if there are any liens against the property- the lien holders names will show up.
Leave a Comment