Richard Vetstein just posted a great blog entitled Ten Questions You and Your Buyers Must Ask Before Purchasing a Condominium Unit. The information is invaluable and I will be sure to discuss this list with my buyers. But based on a recent situation I had with a condo purchase, I would like to add one item to the list:
My buyer had found the condo of his dreams. All things pointed to a flawless closing: stellar credit, hefty down payment, no house to sell, problem-free inspection, great appraisal, etc. However, the lender came back with the information that parts of the condo complex were in a flood zone. This information was not on the property disclosures, so everyone was very surprised. How could this happen?
Apparently, this scenario occurs more often than one would think. In 2008, FEMA redrew the flood maps and included properties that previously had not been in a flood zone. Homeowners may not know that they are in a flood zone until they go to sell their homes. This is what happened in my condo situation. The sellers had been there for years and did not have knowledge that their condo required flood insurance. What made this situation really tricky was that the condo association had to get the insurance to secure the value of the buildings in the event of a flood.
To make a very long story short, the condo board had to meet to discuss, approve, and arrange with the property management company and the insurance agent for the insurance. The lender required the 30-day wait period on the insurance binder; if the check was not received by the insurance provider within ten days, the 30-day wait period would be reset. Fortunately, in this case, the property manager was on top of all the details, and we only had to wait the 30 days.
The closing took place 19 days after the original scheduled closing, creating much stress for all involved. Again, we were fortunate that the seller was able to rearrange the closing on his new home, but imagine the nightmare if multiple closings were hinging on this one.
So in addition to the ten questions listed by Richard Vetstein, also verify the flood zones. If a condo is in a flood zone, flood insurance (which is very expensive) will be required by the lender and the condo board must act on it, adding another layer of complexity to the transaction.
Live and learn.
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Peggy Chirico, REALTOR®
Serving the Greater Hartford Area
Prudential CT Realty
peggychirico@gmail.com
860-748-8900
If you are buying or selling a home in Hartford County or Tolland County, please call me, email me, or visit my website. I would be happy to help you with your home search or provide a market analysis for your home.
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