2010 Mar 11th

What’s Wrong With That Building?

Do Multiple Units for Sale Mean Trouble?forsalesigns

In Hoboken, there are often times when a particular building has multiple units for sale at the same time.  Is this a problem or an indication that there is “something wrong” with the building?  Not necessarily.  Hoboken is still a somewhat transitory town.  Singles become couples, families grow and need more room, people change jobs and move to other areas.  Just because two or more units are both for sale simultaneously does not necessarily indicate a problem with the condo building.  It may just be coincidence that multiple owners decided to sell at about the same time.

How Does a Buyer Really Know?

This is where asking questions, having a good realtor and a good lawyer come into play.  Talk to the neighbors.  There is nothing stopping a prospective buyer from being friendly and saying hello to people walking into or out of the building.  Ask if they have lived there long and if they are happy.  Ask if they have had any problems with the building or the condo association and if they think the building is well run.  There is no reason you can’t simply tell them the truth – that you’re thinking of buying a unit and wondered how they like living in the building.

While you are out shopping for properties, your realtor should advise you of other units for sale in a building in which you are interested.  He or she can make inquiries of the seller as to why there are multiple units on the market.  If the seller doesn’t know, the realtor can urge the seller to find out.  The other sellers are all neighbors, after all.  The realtor might also be able to contact the other listing agents and speak with them about why the other sellers have put their homes on the market.  If the building is professionally managed, the management company may be another source of information.  These preliminary inquiries are a good place to start.

Then you have the attorney review process.  Once you make an offer and reach agreement with a particular seller, you have the right to have your attorney review the contract, the condo documents (the master deed & bylaws) and any other associated information.  It is extremely important to examine the condo association financial statements (budget, bank statements, amount held in reserves, what the reserves and maintenance have been spent on).  If there is a problem, this is where you’re likely to find it.

Also, if the condo board has regular meetings and keeps minutes of these meetings those minutes can be requested.  Read the minutes – is there mention of a legal action against the building that has caused costs to increase dramatically, perhaps driving owners to sell?  Are there financial problems like, for example, a large loan taken out by the association that is coming due and might not be able to be refinanced resulting in a special assessment of the unit owners?  Or is there some sort of major repair on the horizon that has not been budgeted for and will result in a special assessment? Have your realtor ask these questions of the listing agent and have your attorney ask the sellers’ attorney.  The more you know, the better.

It’s possible many people in the building have decided to sell at once because of some underlying problem with the building or condo association.  I suspect, though, that in most cases multiple units for sale are just the nature of Hoboken.

Posted by Lori Turoff | Currently 21 Comments »

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