Want To Make More $$$$ Listing Condos?
“Think Different” – Steve Jobs, Founder Of Apple Inc.
Imagine for a moment that we are listing a condo in South Florida with an appraised value of $300,000. We place advertisements in various magazines, list on the MLS and other related marketing avenues we frequent, and set out to support our client in the sale of their home.
Within the first week we get the following three offers:
1. $280,000 all-cash offer;
2. $290,000 with 25% down and the remainder in mortgage financing; or
3. $300,000 with 5% down and the remainder in mortgage financing.
Which one would you choose?
Understandably many real estate professionals have been burned by mortgage financing on condominiums, resulting in them accepting lower cash offers. Is this what is truly best for the client? $20,000 is potentially being left on the table, might there be another way to determine the true buyer pool for our client’s property before accepting an offer?
Spoiler alert! There is, but before we explain why let’s first discuss the true pain point with mortgage financing and condos. With a condominium, mortgage lenders must not only approve the buyer but the building as well. The lender is typically looking for information including but not limited to the budget and financial reserves, investor concentration, insurance coverage, etc. For gathering this information, a lender will review what’s known as a “condo questionnaire” that the association completes, along with its supporting documentation. The association will usually charge between $100-$300 to complete, and it is a fee incurred by the prospective buyer.
However, whether or not the condominium association will receive approval from the lender is unknown until the buyer is under contract! That means should the lender decline the property due to the association not meeting its requirements, both agents and clients alike will have wasted valuable time and resources taking the property off the market, which could’ve otherwise been spent closing on a cash offer and moving into their next home!
Here is an alternative option to consider – educate your client on the value of investing the $100-$300 up front to learn if it’s even possible to entertain offers with down-payments of 5%-25, which typically garner a higher sales price. Remove the guesswork and identify the buyer pool up front! Do you think this might make your sales presentation, and you as a listing agent, stand out? Worst-case scenario the client spends ~$300 to find out they don’t need to waste time on offers contingent on financing. Best case, that ~$300 investment returns $20,000 in added sale price!
Finance Of America Mortgage
Let us help you with your next listing. You can reach out to us by email at firstname.lastname@example.org or by phone at 561-864-2458. We are located at 951 Yamato Rd Suite 150, Boca Raton Fl 33431.
We’ll help provide you with the appropriate condo association questionnaire, and once completed, send it right back to us and we’ll review it for FREE! We’ll help your next listing presentation stand out by identifying the best market of buyers suitable for your property in order to earn your client the highest sales price for the least amount of stress!
The views of this blog, “Your Morning Shot” podcast, and on this site in general are solely those of the authors, Matt Weaver (NMLS-175651) and Zack Lewis, and do not express the views or opinions of Finance of America Mortgage. This is not a commitment to lend. Restrictions apply.