Condo document and due diligence

Loft – Market House in downtown St. Paul

People who buy condos and townhouses get to review condo documents for ten days before they make a final decision on their purchase. It is a state law in Minnesota and it is called the ten-day recission period.

The ten-day recision period starts after the buyer has received all of the documents.

I am familiar with the condo rules for many condo associations. I am surprised by how often buyers do not read most of the documents. They miss the surprises and the occasional gotcha.

The buyer has the contact information for someone in the association who can answer questions. It isn’t a good idea for real estate agents to answer questions about the documents. I have had clients get advice from their attorney.

Reading and understanding condominium documents are part of the buyer’s due diligence. Condo associations have to show their budgets and current financial status and if there are any pending lawsuits against them.

Condo rules can include rental and pet restrictions and parking rules. I know of one association that prohibits all pets except for goldfish and one that allows all pers except birds.

There are rules about the placement of potted plants and sometimes rules about garage doors that have to be kept closed. Some condo associations have tons of rules and others have few.

Do your own homework and read everything before making a final commitment.

Pro tip – There is one local management company that is the reason why I would not live in some of the condo buildings. I think it is always a good idea to talk to the representative from the management company and directly to someone on the board of directors for the association.

You don’t have to be here to sell

The snowbirds don’t seem to be returning to Minnesota like they usually do this time of year. They may be staying where they are for now.

It is possible to sell your condo, townhouse or St.Paul home without leaving your winter home. We have worked with homeowners we have never met and there are services that will pack up a house and movers who will move it.  I have has success with selling furnished homes too.

All paperwork is handled electronically and there isn’t any need to have a computer with special software or any computer at all.

There are people who are buying real estate right now. So far they are getting approved for loans and we have had several closings take place post-COVID-19 epidemic.

There is still a shortage of homes for sale especially in St. Paul. It is hard to predict what the real estate market will be like in the next year. So far prices are up from a year ago.

A Rossmor Loft

Tasteful furnishings

Ramsey Hill Condo

Over the years I have worked with many clients who have “good taste”, yet I can only think of a few instances where tasteful the furnishings in a home helped make it more saleable.

The furnishings that appeal to one generation may not appeal to another. There are some classic pieces of furniture that have a universal appeal, they are smaller more versatile pieces like chairs, end tables or must-have furnishings like kitchen or dining room tables.

Sometimes removing the furnishings actually helps sell the home especially if it is a smaller home. Staging also helps make homes look more appealing but staging is sometimes misunderstood. It isn’t about filling a home with furniture. It is more about using a few items to show how the space could be used or decorated.

The condo in the picture sold quickly and the owner sold some of the furnishings with it. It was staged by taking some of the furniture out and rearranging what was left and adding some lighting. Rugs were removed and so were family photos.

Less is usually more and having no furniture is better than having the wrong furniture.

A look at the St. Paul Condo market

The condo market in St. Paul is strong. There is currently a 2.2 month supply of units on the market which is slightly higher than the 1.8 month supply of houses. There is a strong seller’s market for condos. Here is a loot at the median prices over the past 10 years.

St. Paul – Condo sales

There are currently 85 condos on the market ranging in price from $99K to 2.3 million. They come in a variety of shapes and sizes and can be found in all neighborhoods.

The data used to make the graphic and other information in this post was found in the NorthstarMLS which is deemed reliable but not guaranteed.


Condos are now more FHA friendly

Starting today, October 15, 2019, it will be possible to buy a condo using an FHA loan even if the condo project (building or complex) does not have FHA approval.

E 6th street
E. 6th street – mears park

Up until now, FHA loans could only be used if the condo project was approved for FHA financing. Approved condo buildings are rare in St. Paul.

There are some rules it isn’t like you can buy any old condo with an FHA loan.

“As of October 15, FHA will insure mortgages for selected condominium units in projects that are not currently approved.  An individual unit may be eligible for Single-Unit Approval under the following conditions:

  • The individual condominium unit is located in a completed project that is not approved;
  • For condominium projects with 10 or more units, no more than 10 percent of individual condo units can be FHA-insured; and projects with fewer than 10 units may have no more than two FHA-insured units.

Minimum Owner-Occupancy Requirements

FHA will require that approved condominium projects have a minimum of 50 percent of the units occupied by owners for most projects.

FHA Insurance Concentration in Condominium Projects

FHA will only insure up to 50 percent of the total number of units in an approved condominium project.”

If you are buying a condo and wish to use an FHA loan talk to your lender. What is an FHA loan? Short for “Federal Housing Administration” These loans require less of a down payment.

If you own a condo this means that there may be a larger pool of qualified buyers. If you would like to buy a condo you may be able to do so with an FHA loan. Feel free to contact me if you are interested in selling your condo or in buying one.

Downtown Condos more affordable

The downtown St. Paul condo market has always been unique. The neighborhood is different from any other in St. Paul and so is the housing stock. Many of the condos were built or created in the early 2000s. In the last decade, more rental housing has been created and most of it is luxury apartments.

Median prices in downtown St. Paul are lower than they are for the rest of the city. It wasn’t always that way. Per square foot prices are higher downtown.

Median home sale prices downtown vs the rest of the city