Damaged home being repaired by homeowners' association insurance: feasible to sell?
I own a rental property: a small condominium. Last year, following some mistakes by the homeowners' association's landscaper, a tree fell on the condo and significantly damaged it. The condo is in the process of being repaired by the homeowners' association, which filed an insurance claim. The homeowners' association is paying all costs of repair, even inside.
I wanted to sell the condo while the market is good. But repairs are taking over a year.
Is it feasible to sell the condo in its unrepaired condition, but with the purchaser benefiting from the repairs that are being made? The purchaser could, for example, pick out the paint color and appliances that the purchaser wants, all at the homeowners' association's expense.
Or would I need to sell the unrepaired condo at a very low price to be able to sell it?
- Beverly SLv 74 weeks ago
If the purchaser can pay cash..maybe - though I doubt anyone would want to.. However, no mortgage lender will do a mortgage for a home that is not in good condition.Source(s): Mortgage lender 33 years.
- SlumlordLv 74 weeks ago
You could try to sell it in the manner you suggest. Most people want to move in immediately so it might not be feasible but no harm in trying.
- babyboomer1001Lv 74 weeks ago
It's up to you. Some buyers would see it as an opportunity, but most buyers want a move-in-ready unit. You could always try to sell it and if it does not sell, then pull it from the market and list it again when the repairs have all been made.
- Casey YLv 74 weeks ago
Contact a local realtor and ask them...but my first question would be...why is it taking a year to get this resolved?
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- Coffee DrinkerLv 74 weeks ago
You can sell your position to anyone who is willing to pay you to take over your position.
The problem is, that most people don't want to take over your position on this. Buyers who are wanting to live in it want to move in right away. Most investors want to immediately place a tenant and begin generating revenue.
There might be an investor out there who would jump on the opportunity, but they would expect a drastically reduced price so that once the repairs are finished they will have made a profit.
Plus, any buyer with a mortgage will be subject to their bank wanting an inspection and standard mortgages would not approve of buying a condo that's in the middle of a long rebuild. Again this narrows down who can buy it resulting in a lower price IF you find someone who can pay cash or is willing to take the extra steps of getting a rehab loan or other special financing.
Your best bet is to hold the property until its finished. The insurance should be paying for you or the lost revenue from not being able to rent it out.
You could talk to an attorney about your options for a lawsuit against the insurance company and/or contractor, but you'd need to lay out a case of how the delay is causing you financial harm. Perhaps just a letter from an attorney would speed things up. Another option would be to ask the insurance company if they would buy it from you. They can sell it when the job is complete.
- GTBLv 74 weeks ago
not smart to do and do not recommend it
- Anonymous4 weeks ago
Is it possible to sell now? Yes.
But you will have a smaller pool of buyers who can do that as it may be difficult for them to get financing or homeowner's insurance while the condo is in a state of disrepair.
It sounds a bit messy for the buyer if you expect them to pay you what the condo will we worth after the repairs (rather than what it's worth now) and expect their lender to lend on that basis. Yes, there rehab loans, but that's not generally a thing when a third party is paying for the repairs. How would the new owner make sure the HOA pays for the repairs? Would a new condo owner want to live in a fixer when there are plenty of other condos available without all the practical or legal hassles?
- RobertLv 64 weeks ago
I would think you could look for potential buyers and explain it to them just as you did here. You have a unit which is being rebuilt and you would be willing to sell it for $$$$. The buyer can choose the interior colors and appliances and the unit will be available for occupancy on (date). Or you can also choose to sue the condo association for lost revenue for all the months the condo is not livable because of their damage and the amount of money you would have made renting it.
- SimplytheFACTSLv 74 weeks ago
possible, but not likely, once the structural repairs are nearly done, it might be for feasible...but until you are to the point of picking out paint, not likely.
and they won't get any upgrades, will just be replaced with similar quality...if you have a basic range, that is all they will get, nothing fancy.