This week I talked to a couple of potential buyers who expressed interest in the entry level condominium market. As with any buyers, one of my first bits of advice is to get pre-qualified with a lender. Talking to a lender helps to assess your financial position for purchasing a home or condo. It also gives you a sense of what you might expect for monthly payments at different price ranges. In a sign of the times, there is now a new reason why it is in the interest of an entry level condo buyer to get pre-qualified.
The entry level condo market has been hit harder by foreclosures than any other segment of the market. This segment saw speculation, sub-prime financing and economic hardship contribute to a growing pool of foreclosures. Many of the complexes that saw a spike in foreclosures have also seen an increase in delinquent maintenance fees. When maintenance fee delinquencies reach a certain point, banks will raise a red flag on a complex. They fear the stability of the association and restrict or prohibit lending within the complex. It appears that there are some entry level condos on Maui that are falling into this category. A lender should be able to provide some insight on condos where there are restriction on lending. This will allow allow a condo buyer to focus their search accordingly.
