Some San Diego real estate buyer agents don't know how to advise their clients when they're looking at a San Diego condo with pending litigation. If you are a buyer getting a loan with 20% down or less, here's what I think you need to know. There is no legitimate conventional or FHA financing available when a condo complex is in litigation. Agents want deals to close, so sometimes they get bad information because of wishful thinking. There are lenders who promise they can get buyers a normal conventional loan in buildings with litigation. What is happening here is that no one is telling the lender that there is litigation. If you read your loan guidelines carefully, Mr. and Mrs. Buyer, you will find that it is your obligation to tell your lender about litigation if you are aware of it. Wait, what!?!? The loan officer is pushing it through without telling the lender?! The buyer's agent is pushing it through without telling the lender?! It's the buyer's responsibility?! Well, the agent and loan officer may also be at fault (I'm not an attorney, so I'm not offering legal advice here), but buyers should know that they are committing a sort of fraud when they purchase a condo in a building they know has pending litigation without disclosing the litigation in writing to their lender before completeing the transaction.
Here's the deal. Some lenders don't officially ask every HOA about litigation (why, I do not know). Even if they don't ask, the buyer must tell them about litigation. Nothing may ever come of it, but you the buyer should be aware that you are taking a risk if you do go through with the purchase. Of course, there are other lenders out there who will do a legitimate loan (some private lenders, and maybe some banks who are willing to do the loan at a higher interest rate), but it will not be conventional financing. The conventional guidelines simply do not allow a loan in a building with litigation. There are many complexes in San Diego that go through litigation at one point or another, so buyers should know how it affects them. Cash buyers... do whatever you want. You don't have a lender to worry about. Just make sure that you know what you're getting yourself into before you complete the transaction.
If you are a potential San Diego condo buyer, buying between $500,000 and $2,000,000, with excellent credit, and want a professional buyer's agent who understands the complex issues facing buyers in today's market (and who is looking out for your interests at all times), consider hiring yourself an exclusive buyer agent! Give us a call today at 858-437-2662.
Justin Gramm is the founder and principal broker of Globella Buyers Realty, your San Diego Exclusive Buyer Brokerage. He also writes this blog, "For San Diego Home Buyers."
Exclusive Buyer Agents do not list homes for sale and never represent sellers. They have no "inventory" to try to sell you. They can represent you in purchasing any home. They are specialists at representing buyers only on the buyers' side of the transaction. Exclusive Buyer Agents work to get buyers the best price and terms when they buy a home.
If you have excellent credit and plan to buy a home or condo in San Diego County within 90 days, contact Justin Gramm to hire an agent on your side of the transaction. Call Justin at (858) 437-2662 or E-mail.
More about Justin Gramm on Google+.