Profile picture for user7613537

When to walk away from an offer?

I recently made an offer on a condo in Chicago. It is a foreclosure. Everything seemed normal. Last night after 5pm my realtor called to say they wanted a copy of a second earnest money check, this one for 10%.(I had already submitted a copy of the usual 1k) They had also 'forgotten' to update their association fee' so it would be higher than what they had listed/month. They also wanted another check for 2k towards 'building improvements'. (My feeling is that a healthy association with proper reserves wouldn't need to ask this, but I haven't seen their financials yet) Then they also said that I may or may not be responsible for 6 mos back assessments. But no one can tell me for sure.They are also giving be impossible timelines. They wanted the second earnest money check by 9am this morning and I was only called after 5pm last night. The banks were closed. I should note they don't actually want the checks sent out yet. They only want copies, but I still feel weird about it. Is this normal? Or should I trust my instinct that there is something wrong here and walk away? I'm on a deadline because the place I live in now is under contract with a closing at the end of October and I don't want to make a mistake because I feel pressured.
  • September 05 2013 - US
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Answers (5)

I think that you should follow your instincts here. I tend to agree with you that well managed associations should not be ommitting a change in monthly payment. My experience with HOA/Condo's raising the monthly is that they are woefully undercapitalized. Ask your agent to write an addendum to your offer that states what your willing to accept and get in writing. It may be time to tell your agent, "listen, this is what I will do, This I WILL NOT DO. Good luck though. 
  • September 06 2013
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Buying a foreclosure can get you a great deal and give you instant equity, but they can certainly be a headache as well. I am currently working with a customer who had his offer "accepted" by the bank in February. It is now September and we are still waiting on the bank. 

Bottom line, if it doesn't feel right - walk away. If you are willing to put up with the headaches for a great deal, then go for it. Best of luck to you
  • September 05 2013
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Profile picture for Carole Tyne
If you have an accepted signed offer for earnest being X dollars than that is what you are required to deposit.  If you do not have signed back from the seller than that is counter?
Chk state laws there regarding foreclosure.   If this is truly owned by the bank than usually bank is only responsible for when property was taken over.   You are not usually responsible for back payments if brought a trustee sale or short sale situation.  
Regarding the building improvement fees or capital improvement fees.   It is not uncommon and vary from hoa association. 
Buying a property is never for sure till is records.   Would definitely make plans just incase you need to be out and it falls though.
  • September 05 2013
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Profile picture for Ofe Polack
Were you protect on your offer?  What does your buyer agent has to say?
  • September 05 2013
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Several items do seem odd.  If they have accepted your offer with the initial $1,000 Earnest money check, they can't come back and ask for more. If they have not yet accepted the offer, they could ask for more earnest money and that decision would be up to you.  10% is high.  Also- I would be concerned about the financial condition of the association and non-disclosure of what you would actually be required to pay as far as assessments go.  Talk to your agent regarding what your "outs" will be on this deal, including inspection, condo doc review, etc. If you have a couple of these contingencies in place you could proceed and still back out and get earnest money returned once you know more.
  • September 05 2013
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