Agents, appraisers and lenders discussed the importance of being educated on the specifics of a condominium building or project when selling a condo unit, during a panel yesterday at the 2017 REALTORS® Conference & Expo.
During the panel “Dispelling Condo Confusion for Agents and Appraisers,” real estate agent and appraiser experts discussed the many issues and challenges that are unique to buying and selling condos and emphasized the need to be completely familiar with the home agents put on the market.
The amount of information needed for the transaction to take place smoothly can be overwhelming. For example, comparable listings are not enough when it comes to valuating a condo unit. Information like how many unit owners are 60 days delinquent, the bundle of rights associated with the property, the health of the condo association’s finances, and if the project is 100 percent complete or are additional phases planned all affect the appraised value, as well as potential lending options.
But how do the seller and his or her agent organize all this information? “The mother ship of data collection is the Fannie Mae Form 1076 condo questionnaire,” said panelist Maureen Sweeny, certified residential real estate appraiser. “Attempting to hunt down information from management companies is the biggest time thief for appraisers, and this five page questionnaire will give appraisers everything they need, keeping the transaction on schedule.”
This detailed data is something that the listing agent will want to have on hand to advocate on behalf of the seller. Panel moderator Lynn Madison, a Realtor® and real estate instructor, recalled a situation where a buyer was looking at two units in the same condo building and wanted information about whether his pet would be allowed in the building. “One listing agent had all of the information about the condo’s rules for dogs, the numbers of dogs in the building and details about dog-related amenities in the community. The other agent had none of this information. Which unit do you think he bought?”
This data needs to be collected on day one of the selling process, not after the unit has been listed, said panelist Sam Powel, a Realtor® with Dream Town Realty in Chicago. “If I don’t have a contact for the property’s management and all the details about the project, we are going to wait to go to market.”
Having this information on hand is just as important when it comes time to finding financing. “The biggest source of condo confusion is that there is a necessary set of documentation that is needed by the appraiser and the lender based on the specifics of the project or building,” said panelist Joshua Shoemaker, National Condo Building Manager for Chase Bank. “When the appraiser or lender says ‘I need these five documents’ and they only get four, that’s when delays and confusion set in.”