5 Things You Should Know When Buying Foreclosed Real Estate in Chicago
Chicago homes buyers can find great deals in foreclosed Chicago real estate. There are many bank-owned properties on the market right now, including townhome and condo units. However, before submitting an offer on a foreclosed unit in a Chicago condo building, you should find out more about the property—including these five things…
#1 Condition of the Homeowners’ Association – Ask the association board to provide you with information about its current standing. For example, what percentage of its owners are late in their assessment payments? It is important to know this since many banks will not approve mortgage loans for units in buildings with more than 15% delinquency on monthly assessment payments.
#2 Back-Assessments Due on Unit – Under Illinois law, the buyer of a foreclosed condo unit can be held responsible for up to six months of unpaid assessment fees from the previous owner. Payment of back-owed assessments can sometimes be waived by the bank through negotiations, so discuss this with your realtor.
#3 Condition of Unit – Some foreclosures have been vacant or even boarded up for many months. Which means they are susceptible to mold, water damage and other matters of neglect. Make sure to have the unit inspected by a professional to locate any problem areas or things that could develop into an issue down the line.
#4 Owner/Renter Ratio – This refers to the number of owner-occupied units as opposed to the number of renter-occupied units. Some lenders will not approve mortgage loans for properties in buildings with a high ratio of renters to owners.
#5 The Building’s Standing with Lenders – Some condo buildings have been essentially black-balled by certain mortgage lenders for various reasons. Ask your lender if there are buildings they do not provide financing for so you know from the beginning where to focus your search.