Are you working with a Realtor on your home purchase in Boston? I certainly hope so! If you are going at it alone, you may overlook the most important contingencies when buying a condo. In Massachusetts there are two contingencies written into the offer to purchase paperwork. But what’s not in the standard offer is the most important when buying a condo.
Here are the three contingencies you must have in your offer to buy a condo:
1. Inspection Contingency. Conduct an inspection with a licensed inspector who comes highly recommended. You will have 7-10 days (including weekends) to conduct this inspection. Ensure you receive the report in a timely manner, and if you need more time, file for an contingency extension.
2. Financing / Mortgage Contingency. Unless you are paying cash, you will probably have a mortgage contingency in your offer. The standard paperwork has it built into the offer. Usually, roughly a month to six weeks after the offer is accepted. If you are closing quickly, you’ll have to get it done sooner. Don’t forget to submit your completed mortgage application in accordance with the deadline in the offer. If you read carefully through the paperwork, you’ll find the buyer’s obligation to file an application by a specified day. If not done on time you jeopardize the validity of the mortgage contingency.
3. Condominium Documents Review. Although not included in the standard paperwork, the condo document review is in my opinion the most important contingency when buying a condo. It allows you time to read through the condominium documents and financial statements, and pass them on to your attorney to look for anything out of the ordinary.
Why is this so important? You will learn about the financial health of the building, rules and regulations, and a lot more detail about how the condo association functions. If the building is in a dismal financial situation and poorly run, expect the value of the condo to deteriorate or the association to have large expenses in the near term. Furthermore, the mortgage company may reject your application if the building has low owner occupancy or lack of funds.
When including the condominium documents review contingency, don’t forget to specify the documents will be provided within two business days. The listing broker should have them ready before the condo goes on market, so this should not be a problem.
Writing an offer to purchase a condo requires thought and preparation. Learn the contingencies and don’t depend on standard paperwork alone to protect your interests.