Most buyers will need a loan to purchase your condo.
Here are 3 reasons a buyer will be denied a loan:
1) Litigation - If there is another unit owner that is suing your Homeowners Association (HOA), most lenders will not lend under those circumstances.
There are certain lawsuits that lenders are OK with, but this will be determined on a case-by-case situation.
2) Low Reserves - If the HOA reserves are low, then the buyer will be denied a loan.
Having $5k in the reserves is just not going to cut it. Lenders want to feel safe that if the roof were to collapse, or if a small fire damaged the clubroom, that the HOA has enough in the reserves to cover the damages. Low reserves will lead to a loan denial.
3) The complex needs to be at least 51% owner occupied.
If there are more renters than owners at the complex, lenders tend to frown upon that. Frowning lenders don't like to lend.
If there is no litigation, there are healthy reserves, and the complex is mostly owner occupied, you will be in good shape to sell your condo to a buyer who is utilizing a loan to purchase.
📸 photo credit: Instagram @iggz2k
