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Working on a REO assignment of a condominium unit in the Chicago market. The property had minimal deferred maintenance and thus not impacting value much. However, the property had pending litigation against the developer, most units having mechanic leins, and the association having a special assessment of $135 plus the $172.50 regular monthly assessment. According to the management company, there is no ending date for the special assessment. Monthly assessments for units of the subject's size and bedroom/bath counts were averaging in the market place between $150 and $180. The market was in over supply 15+ months with values declining.
It is to my experience that conventional lender's will not loan on condo units with pending litigation and mechanic leins. Therefore, the only buyer for this unit was concluded as a cash buyer. The unit was purchased in May of 2006 for $182,000. The building has no resales and the market area has minimal recent and past sales of REO properties to draw any conclusions. The market does have some recent and past sales of newly converted units but very minimal recent and past sales of re-sales of newly converted units. Considering the only buyer for the unit is a "cash buyer", I want to make a terms of sale adjustment of minimally 10% for the difference of a conventional buyer and a cash buyer.
I only have one REO listing within the association of a duplexed unit with five rooms, two bedrooms, one bath on the main level with the duplexed basement level having two rooms including a bedroom and an additional full bath (subject unit is 5/2/2 ~ simplex~ 1 level unit). This property sold at time of conversion for $309,000 and currently has a list price of $209,000 (only 10 days on market). Am I thinking on the right path for making a terms of sale adjustment. Does a 10% downward adjustment appear in line?
It is to my experience that conventional lender's will not loan on condo units with pending litigation and mechanic leins. Therefore, the only buyer for this unit was concluded as a cash buyer. The unit was purchased in May of 2006 for $182,000. The building has no resales and the market area has minimal recent and past sales of REO properties to draw any conclusions. The market does have some recent and past sales of newly converted units but very minimal recent and past sales of re-sales of newly converted units. Considering the only buyer for the unit is a "cash buyer", I want to make a terms of sale adjustment of minimally 10% for the difference of a conventional buyer and a cash buyer.
I only have one REO listing within the association of a duplexed unit with five rooms, two bedrooms, one bath on the main level with the duplexed basement level having two rooms including a bedroom and an additional full bath (subject unit is 5/2/2 ~ simplex~ 1 level unit). This property sold at time of conversion for $309,000 and currently has a list price of $209,000 (only 10 days on market). Am I thinking on the right path for making a terms of sale adjustment. Does a 10% downward adjustment appear in line?