In the current Chicago real estate market, foreclosed properties are in particular demand amongst homebuyers. In fact, according to a recent survey by RealtyTrac/Trulia, some 85% of Chicago residents who are currently searching for a home have expressed serious interest in distressed properties. The good news for these buyers is that the city of Chicago and its various suburbs are host to a bounty of foreclosed condos that were given up either by homeowners or local developers.
Before purchasing a foreclosed condo, buyers should familiarize themselves with the ins and outs of distressed condo buying so as not to run into any surprises or hang-ups along the way.
The first thing to keep in mind when looking at a foreclosed Chicago condo is that buyers of distressed properties can be held responsible for the payment of the unit’s unpaid assessments for up to six months. Many banks, however, are willing to negotiate with buyers about these assessments, so it is important to explore all of your possible options before resigning to cover the back-owed assessments on a foreclosed condo.
Make sure the homeowner’s association for the condo is stable. Tell the seller or association itself you would like to review pertinent information about the building. Look to see that no more than 15% of the current condo owners are in arrears on their assessments. When the percentage of owners with unpaid association dues hits 15% or higher, your bank may refuse to finance your purchase in the building. Banks might also deny mortgages for condos in buildings that have too many renters and not enough homeowners. So check the vital stats on the condo building you are interested in before committing.
Find out if the homeowner’s association of the building you are interested in has first right of refusal on purchase contracts. If this is the case, it is possible for tenants to wait until an offer comes in on a foreclosed condo and then match it, taking it for themselves. Making friends with a current tenant of the building you are interested in could be a worthwhile means of getting information about other tenants and the homeowner’s association. If you do not already know someone that lives there, try connecting with a contact at the building through one of the many social media sites that have become popular in today’s Internet-savvy world.
Always bring a contractor with you when looking at foreclosed condos. Remember, bank-owned properties are sold as-is, so asking the bank for credit to do repairs is out of the question. A contractor can put a realistic number on how much you should expect to spend on the condo post-purchase to get it in move-in condition.
Finally, do not hesitate if a good deal on a foreclosed Chicago condo pops up. This can be a great opportunity to get in at a deeply discounted price and an excellent chance to make a long-term investment. If you are able, consider paying for the condo in cash to speed up the closing and make the entire buying process as quick and stress-free as possible.