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I'm considering buying a small condo in my hometown for my vacation/summer place to stay. It's an inexpensive part of the country so the price is where I can just pay cash.
What do I need to know for a cash transaction?
Is it standard/accepted to settle on a lower-than-asking price for cash?
The cleaner your offer, the more likely the seller will be willing to consider a lower amount. With a cash offer and no financing or appraisal contingency, it's a more attractive offer. Just don't waive the inspection contingency! And make sure your real estate agent has done a good CMA so you know that the value is there even without an appraisal.
Some believe that a 'cash offer' will motivate a lower price, but, short-term convenience and a greater probability of closing is more of an issue. Of course, once an inspection and appraisal contingency is included in the mix (excellent ideas), it slightly modifies the 'cash transaction' advantage.
One thing you will need to provide is a proof/source of funds with your offer.
What do HOA dues have to do with the offer? They are not contingent.
However, it does bring up the point that, as part of the contract, you should include a clause that the seller has to provide up-to-date financials, budget and a copy of the convenants-and-restrictions. Also, find out if there are any assessments coming up.
Another item to check on in the condo community is whether or not they are currently permitting rentals -- if you change your mind down the road and decide to rent it out, you may not be able to if they are at capacity on the percentage of rentals allowed. Also see how strict they are about who can live in the unit. We've run across those who insist that the residents must be on the deed, unless they are under the age of 25. You may not use any of these options, but it's good to know what your options ARE, in case circumstances change (i.e., what if you had a niece or nephew who needed a temporary place to stay, etc.)
Also check to see if the complex is FHA approved -- without FHA approval, resale may be tricky. But that's down the road, you may not care.
In my town considering only FHA approved condos would exclude 90% of them.
Yeah, that's the wave of the future. FHA is trying to get out of condo lending. They force-expired existing approvals and changed up the process. I think they used to be good for 10 years and now they have to be re-approved every 2 years. And you used to be able to get "spot approvals" for individual units, but now the entire complex has to be certified. It definitely changes the resale market for condos and makes me very glad that I sold mine (townhouse but legal form of ownership was condo) to a cash buyer!
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