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Dorchester Grandma · Guest

I have found a nice foreclosure condo in Dorchester that I want to buy and it is now under agreement until I sign the Purchase and Sale agreement. I understand that I would need a real estate attorney at closing. I would like to know how I can save money on both the attorney and the closing costs. Does anyone have any ideas?

I want to hold on to as much money as possible for redoing kitchen and bath, painting, patching etc. I am getting it for $85 and I am putting 20% down. I have to take out a conventional loan because I will be the first one in the building so it would not qualify for the soft second loan for first time homebuyers. There is no condo association so I would have to purchase master insurance which will be split 3 ways when the other floors go up for sale. The entire building is going into foreclosure which seems to be common now in DOT triple deckers

Samchady · Guest

Seriously consider not buying this. You are only buying a piece of a building with no association that needs a lot of work. What happens if those other units don't sell? You'll be stuck at a minimum of paying the insurance for a long time, and those places will compromise your value also. What if someone buys all three of them and rents them out and votes down every improvement you want to make to the common areas? And what if they decide not to fix them up and hurt your value?

If you decide to go thru with this, you should read a few books from the library on buying a condo and saving money. They are an easy read. Be sure you can afford to cover all the master insurance for a few years just in case.

What I was told by my broker is that you can hire an attorney yourself and get an exact quote on the cost - shop this cost with a few attorneys since its all the same service for the most part. Hold their feet to the fire figuratively by telling them that you want no other costs - the quote has to be for every service they charge for, and get it itemized so you can compare against the other quotes.

Don't skimp on one thing - get the attorney to read through the condo docs (if there are any) so you know what you are getting into.

Closing costs can be put into the mortgage with some lenders. Shop around like on bankrate.com and you can find finance companies with no closing costs on the loan. You might pay a slightly higher interest rate, but, if you need all your cash, it would be worth it.

john p · Joined: 10 Mar 2006 Posts: 1820

Grandma, could you offer some more detail?

What are your assumptions for how much your bathroom and kitchen might run you? Any idea on the cost of the insurance? What's the condition like on the outside and how long ago did they do the roof. Is it a flat roof? What condition is the deck? Is there any water in the basement? Are the floors level?

Are the windows modern insulated windows and is the exterior wall insulated? Is it gas or oil and what was the average winter bill last year? Is the wiring updated? How about any appliances?

JCK · Joined: 15 Feb 2007 Posts: 559

I'm a bit wary of small condo associations. If you get along with your neighbors, it's fine. If you disagree on fundamental issues (e.g., should we fix things?), and there are only two or three owners, it might be unpleasant. You could end up in a situation where you're being forced to live in a dump (at least the common areas), if they other owners refuse to pay for necessary renovations.

I second all of Sam's points.

Don't buy an expensive headache, unless you're really up for it.

john p · Joined: 10 Mar 2006 Posts: 1820

Great to hear from you again JCK.

Can you tell us what type of "common areas" exist for this triple decker?

From what I imagine, if you're on the ground unit, you'll have you're own porch and front door and your rear entry goes out into a hall that has a staircase up to the second and third floor units right?

If that's the case the only shared common area is the back hall and the basement. If it has new vinyl siding and a roof, you should be good for a while...

I wonder if you could by the three units and rent out two of them? If the triple decker was selling for $85k per unit and you bought all three for say $255k, the mortgage would be roughly $2k per month for the whole triple decker and the single unit would be like $980 or so a month. Anyway, if you could get a couple of renters for say $750 per month, that would give you only $500 on your end to cover the mortgage and it gives you another $480 a month to squirrel away in a fund to cover the months that someone might not be renting the unit or for future repairs.

If the place is a total dump and has been neglected I'd keep looking.... I'm surprised that you can get a floor in a triple decker for $85k...

john p · Joined: 10 Mar 2006 Posts: 1820

After further reflection; scratch that...

Dorchester Grandma · Guest

The place is in good shape. nice hardwood level floors, most of the walls good, ceilings all good except 2 of them which need paintng. Bathroom and kitchen need work, and bathtub reglazng. and the bathroom window sill is rotted from the previous idiots letting the shower run over it
.
Common areas are ok though the front hall has dirty walls. The heating system will be removed and replaced by the bank since the gas furnace is covered with asbestos. If they don't it do it then it will be a deal breaker for me. My son in law has an electrician friend who will replace the fuses with a circuit system

The porches are in pretty good shape and the whole place seems to be structurally sound with a nice stone foundation. The basement seems dry. It has all new windows. The exterior is cedar shingles and looks ok to me though I am not an expert. It is a double bow triple decker with a flat roof.

I am going to talk to the bank lawyer who is a real estate lawyer about the insurance. I want to make sure that I am not stuck paying it, for a long time to come. It is about $3200 per year according to one of the agencies that I called. My real estate agent thinks that the bank that owns the property should be footing the bill for insurance.

This place is in a good area, near a nice park, has 6 rooms, even a sunroom which leads out onto the front porch. I love the hutch in the dining room and the pantry off the kitchen as well as the yard which is flat and quite large. It is the kind of place that I want for an amazing price so I am going to do things carefully, get whatever legal help that I need etc because there is no other way that I could afford a charming condo like this if it was not a foreclosure which I can get for $85

Dorchester Grandma · Guest

The place is in good shape. nice hardwood level floors, most of the walls good, ceilings all good except 2 of them which need paintng. Bathroom and kitchen need work, and bathtub reglazng. and the bathroom window sill is rotted from the previous idiots letting the shower run over it
.
Common areas are ok though the front hall has dirty walls. The heating system will be removed and replaced by the bank since the gas furnace is covered with asbestos. If they don't it do it then it will be a deal breaker for me. My son in law has an electrician friend who will replace the fuses with a circuit system

The porches are in pretty good shape and the whole place seems to be structurally sound with a nice stone foundation. The basement seems dry. It has all new windows. The exterior is cedar shingles and looks ok to me though I am not an expert. It is a double bow triple decker with a flat roof.

I am going to talk to the bank lawyer who is a real estate lawyer about the insurance. I want to make sure that I am not stuck paying it, for a long time to come. It is about $3200 per year according to one of the agencies that I called. My real estate agent thinks that the bank that owns the property should be footing the bill for insurance.

This place is in a good area, near a nice park, has 6 rooms, even a sunroom which leads out onto the front porch. I love the hutch in the dining room and the pantry off the kitchen as well as the yard which is flat and quite large. It is the kind of place that I want for an amazing price so I am going to do things carefully, get whatever legal help that I need etc because there is no other way that I could afford a charming condo like this if it was not a foreclosure which I can get for $85

Guest · Posted: Thu Nov 20, 2008 5:27 am GMT Post subject:

AM SORRY FOR POSTING 3 TIMES. The computer that I am using, not mine, is very slow and it did not appear to have posted Embarassed

Editor's note: No problem - I got rid of the extra posts.

JCK · Joined: 15 Feb 2007 Posts: 559

Have a good inspection done.

Check for lead paint issues, and whether the place is actually indicated as having lead paint (vs. unknown). Most places are listed as "unknown." But if it's been registered as having lead paint, I think that causes a whole new level of potential headaches. Someone else here will undoubtedly know more about this than I do.

Also, see if the roof is in good shape. And check it out for yourself. My inspector said, when we bought our place, that sellers often lie about the condition of the roof.

Best of luck.