Things to Know When Considering Contract For Deed Condos in MN
Buying a condo for sale in MN can be a challenging process and can be even more challenging when looking for contract for deed condos in MN. Contract for deed condos in MN are hard to find but The Antonov Group has a solution for you! We specialize in contract for deed financing and whether you are looking for urban lifestyle or prefer a quiet condo development in the suburbs, The Antonov Group with Remax Results is here to help you.
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Make an informed decision
Whether you are buying a condominium in Plymouth or a Minneapolis condo for sale, it requires preparation and information gathering, so that you may make an informed decision about your real estate purchase especially when you are looking at contract for deed condos in MN. Every condo development, dynamics of the HOA, complexity of Rules and Regulations and even composition of renters vs owner occupants in the development can play a crucial role when you decide to sell a condo in the near future because it will affect financing of a potential buyer. It is important to learn important details of each HOA before you move in.
Living in a condo means living with hundreds, sometimes thousands, of condo owners under one roof where all are governed by an HOA (home owners’ association). Although HOA’s are not a bad thing, they can get very confusing and can be a turn off for many potential condo buyers. Knowing a few important things beforehand can help ensure a comfortable living in the long-run.
Difficulties when financing Condos in MN
Even if you are pre-approved for a home loan (FHA or Conventional), it doesn’t always mean you are able to buy any condo for sale in MN. There could be a number of different reasons that might prevent you from obtaining financing. Here are just a few of them:
- Monthly HOA fees
- HOA Rules and Regulations
- HOA Reserves
- Owners vs Renters
- 25%+ commercial space in a development
- Pending Lawsuits
- Special Assessments
Monthly HOA fees
Condos have homeowners’ association (HOA) in place to take care of maintenance of facilities and providing different amenities to the residents for which they charge HOA fees. Living in a condo means these fees have to be paid as well and there is no way out. Most of them are monthly but sometimes it would be a quarterly or a yearly fee (very rare). They can range anywhere from a few hundred bucks to thousands depending on HOA, number of amenities included and type of ownership.
HOA Rules and Regulations
In condos, each building only has a wall to separate one condo owner from the other so s set of rules is essential. Prior to making any offers on condos, research the association and talk to a few residents to feel out the vibe. Don’t worry if you do not get all of your questions answered. Once your offer is accepted, you receive a 10 day right of rescission that gives you 10 calendar days from receipt of HOA Resale Disclosure, Bylaws, Rules and Regulations, etc to review them and back out if you are not OK with them with all Earnest Money to be refunded back to you.
The rules could be pertaining to things like pets being allowed or not, the kinds of pets allowed and weight limits, permission to have guest visitors, renting, even use of colorful curtains could be on it, noise and additions/limitations of your property…Make sure you read the rules to know what you are getting into.
Each association has a reserve fund, of which about 10% goes for replacing items. Checking out the reserve fund review of the association will give you an idea as to how liquid the association is. If it does not have sufficient finances, buying a condo there might not be a good idea as you won’t be getting a satisfactory maintenance to continue to enjoy your condo or might have to deal with constant assessments due to lack of finances.
Owners vs. Renters
Knowing the ratio of owners vs. renters occupying the condos is another important thing to know. Most condo complexes only allow a certain number of renters in the complex as it is believed that owners take care of their home better and work on building the quality of life in the complex. It also effects financing and may prevent future buyers from buying it.
If you plan to rent out the condo you are buying, having a certain # of rentals limit can put your condo on the waitlist and you will end up with a vacant unit that can’t be rented until its your turn.
25%+ commercial space in a development
A lot of condo buildings Downton Minneapolis will have 25% of its usage devoted to commercial purposes which means that not every loan can be used to purchase condos there. Actually, you will have only a few options left:
- Conventional with 20%+ down payment
- Portfolio loan
- Contract for deed/owner financing
Lawsuits against the homeowners association (HOA), builders and developers in the recent past or the current time period would give you an idea of the issues of peace, security and safety in the complex. So proper homework can prevent you from dealing with numerous headaches during your condo ownership.
Sometimes contract for deed condos in MN are going to be in troubled HOAs that lose their financing status and selling on contract for deed becomes the only option. So if you decide to look for contract for deed condos in MN on your own, you might end up buying a unit with a pending lawsuit that would prevent buyers from obtaining financing until lawsuit is settled. Always use a real estate professional and do proper title work or seek legal advice.
Just like buying a single family home condos too can have special assessments from the city, county or state but they also can have special assessments from the HOAs that they are in. For example: imagine a situation when HOA is low on funds and is barely making it. All of a sudden roof starts leaking, damaging each unit. HOA makes an insurance claim that gets denied due to poor management or another cause. Now HOA is going to have to tap into their savings and pay for the repairs. Due to the need to pay for these expenses, HAO will distribute these costs across owners and now each owner can be stuck with thousands and thousands worth of special assessments that need to be paid off. Luckily, they stretch them out over the course 10-20 years. Unfortunately, very few buyers will want a unit with bunch of assessments on it.
Search Contract For Deed Condos in MN
When it comes to actually looking for contract for deed condos in MN, you will come to realize that there aren’t that many of them. Very few condo owners want to carry financing for you unless their HOA is in trouble and there is no way buyers can obtain financing for it. That’s why it is important to do your homework ahead of time. However, The Antonov Group is able to help you buy any condo for sale on the market using contract for deed financing which opens up a whole lot more condos for sale in MN to choose from.
To start your search, simply use the condo search or fill out a form below and one of our real estate agents will get back to you!
To make your contract for deed condos in MN search easier, we made a list of quick links below. Search condos by community or by city. Most condos will be located in Downtown Minneapolis and Downtown St Paul and townhomes are going to be more common in the suburbs.