Boston Condos for Sale and Contingencies
Boston Condos for Sale and Apartments for Rent
Boston Condos for Sale and Contingencies
Due diligence for condo buyers. If you buy a Boston condo for sale its important to have contingencies. Contingencies can include the condo documents and rules, bi-laws and financials. Some condo associations will even share meeting minutes from home owner association (HOA) condo meetings.
A buyer can cancel the purchase with no penalty if there is something in the condo documents that isn’t acceptable. Over the years I have had a few buyers cancel a condo purchase because of rules like pet restrictions, rental restrictions and other restrictions on how the unit can be used.
Sometimes the condo assoc. doesn’t have adequate reserves to cover maintenance or unforeseen repairs. Which means owners may receive large assessments to pay for repairs.
Maybe the condo month fees are just too high.
It is important to understand that it is the buyer who needs to read and understand condo documents and that any questions should go directly to the condo assoc. Seller’s do not always have the facts and real estate agents should stay out of it. Everything is in writing from the association.
NEVER rely on what a real estate agent or a condo owner says when it comes to anything that the condo assoc. controls. Go directly to the management company or designated member of the condo board of directors. Get everything in writing.
Buyer’s agents and listing agents should refrain from answering questions or acting as a go between when the buyer is doing due diligence. Some real estate agents get too involved. Seller’s should always direct questions to the association.
Agents may assist their clients by providing phone numbers and email addresses or forwarding documents to the buyer but should not be answering questions for the association.
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Boston Condos for Sale and Contingencies
Owning a Boston condo and buying another has never been easy. During a buyers market sellers usually comes out ahead by waiting until they have an offer on their Beacon Hill condo before they make an offer on a Boston Seaport condo
Boston Condo Sellers Market
In the current Boston condo market which is a strong seller’s market homeowners often opt to buy first and then sell. In some cases, they may end up owning two Boston condos for a couple of weeks. Lenders have programs for that. Explain to your lender that you want to buy non-contingent.
Some homeowners are able to pay off their mortgage before they go house hunting, giving them some time to move out before they sell their condominiums.
Offers that are contingent on the sale of the buyer’s house/condo are rarer than they used to be and go to the bottom of the pile when there are multiple offers.
If at all possible secure your next home before selling the one you already own. We are seeing some homeowners selling their house/condo contingent on finding a Boston condo to buy. That can also work.
Boston Condos for Sale and the Bottom Line
People are moving again.
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Boston Condos for Sale
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Boston Condos for Sale and Contingencies
The Boston real estate market has come roaring back after the initial Covid slowdown in 2020. We are heading into a robust Spring, and it seems like Boston downtown condo buyers and sellers are making up for last year’s lost time.
That’s led to very competitive offer situations and high sale prices, particularly for Beacon Hill and Back Bay condos in smaller buildings. Most multiple-offer situations end up with a handful of buyers waiving all contingencies (e.g., conditions of the sale) in order to make their offer as attractive as possible to the seller.
Boston Condo Buyers and the danger of waiving contingencies
But do Boston condo buyers realize what’s at stake when they waive all contingencies? Sometimes I’m not so sure.
When you make an offer on a property, you typically include an earnest money deposit that you place into the escrow account upon offer acceptance. That money sits in the escrow account and is related to what’s known as the “liquidated damages” clause in the contract. In other words, if a buyer backs out of the sale without using one of the contingencies as the reason, the sellers are within their rights to retain that deposit money for damages incurred.
That deposit is at risk if a buyer waives the major contingencies (e.g., inspections, appraisal, loan) and a complication arises in one of those areas that force the buyer to reneg on the contract. Given downtown Boston’s real estate prices, that amount of deposit money is significant.
I discuss all the ins and outs with my clients about contingencies and whether it’s possible or desirable to waive them in a competitive situation. There are certainly many instances where buyers should not be waiving major conditions. This decision is very specific to one’s financial situation, and shouldn’t be taken lightly. Make sure you discuss the larger perspective with your agent and lender before you risk your deposit money.
Boston Condos for Sale
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Boston Condos for Sale and Contingencies
There are all sorts of contingencies that can be put on an offer to buy downtown Boston real estate. The two most common are inspection contingencies and contingent on financing.
Buyers can also make an offer contingent on the sale of their own home. It happens all the time but those contingencies get complicated. Usually offers that are contingent on the sale of Boston real estate can be bumped by non-contingent offers from other buyers.
Here are a few things that can and do go wrong:
- A non-contingent offer comes along and the seller accepts it and the contingent buyer’s offer gets canceled because they do not get an offer on their home fast enough.
- The contingent offer isn’t accepted because there are several other offers that are non-contingent.
- The seller asks that the contingency is removed within 48 hours because they can and they got cold feet and you all agreed to the 48 hours.
- The buyer gets an offer on their property but it is a contingent offer, which means it can not be used to remove the sale contingency.
- The buyer gets an offer but the financing on that offer falls through and the offerer is unable to perform.
Sometimes there is a chain of 3 or more home sales that depend upon that first home sale in the chain closing.
Contingent on another real estate sale
When selling your Seaport or Beacon Hill condo that is contingent on the sale of someone else’s home it will cause a lot of extra stress if your purchase is also contingent on a sale.
I have been through chains of sales with multiple contingencies and they often work out. I have learned to go into these situations believing that everything will work out and I encourage my clients to do the same.
Downtown Boston Real Estate and the Bottom Line
In a strong seller’s market is especially important for home sellers to have a plan and know where they are going to live after their home is sold.
