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Thread: Buying a new construction condominium

  1. #211
    http://tinyurl.com/2ag28z Front_Porch's Avatar
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    Without knowing the building, I'd say these are totally legitimate issues. We are seeing a bifurcation in the credit markets between conforming (under $417K) and non-conforming/jumbo loans (over $417K) so it's possible that you're trying to borrow a big number.

    Also, your attorney might have a point of view here -- sometimes your attorney can shake documents/promises out of the sponsor's attorney that your mortgage banker cannot.

    ali r.
    {downtown broker}

  2. #212

    Default

    Quote Originally Posted by Front_Porch View Post
    Without knowing the building, I'd say these are totally legitimate issues. We are seeing a bifurcation in the credit markets between conforming (under $417K) and non-conforming/jumbo loans (over $417K) so it's possible that you're trying to borrow a big number.

    Also, your attorney might have a point of view here -- sometimes your attorney can shake documents/promises out of the sponsor's attorney that your mortgage banker cannot.

    ali r.
    {downtown broker}
    Thanks for the feedback Ali. The loan is under $417k so that's not the issue in this case. It's the fact that this new condo is not fully sold and hasn't yet accumulated its reserve fund and formed its condo association.

    Calling around some lenders, I get the feeling this is a legit issue but not quite the showstopper that my broker is suggesting. How could any new condos could get off the ground?

  3. #213

    Default re: aggregators

    Front Porch,

    It's not just because of the size of your company. I went to look at open houses this past weekend. I did an open house search on StreetEasy, had my list ready, and just out of curiosity I checked out the NYT's site. I found quite a few additional properties. StreetEasy has been going three, four days without listing a single new property from both Elliman and Corcoran. I'm not sure why.

    If you're doing the open house circuit particularly, make sure you check out the times as well as one of the aggregators.

  4. #214

    Default

    christophergraz, my suggestion in this situation is to go to a direct lender(s), rather than through a broker. This removes one person from the mortgage approval process and puts you in direct communication with the lender(s). You are more likely to get straight answers regarding your situation and condo/building.

  5. #215
    http://tinyurl.com/2ag28z Front_Porch's Avatar
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    As someone who has both worked with brokers and direct lenders, I would respectfully disagree.

    The broker is going to get paid to make the loan happen, and it's in their best interest to shop lenders until they find someone who will loan to the builidng.

    With a bank, they have the products they have, and they're not going to switch 'em around for you.

    ali r.
    {downtown broker}

  6. #216

    Default

    not necessarily true. if you have a fair amount of assets (liquid cash and illiquid) in a (retail) bank or are willing to transfer them to a prospective lender, they will bend for you. this is all relative, but the point is that there is a certain amount of discretion that these lenders have for existing customers to keep retention and for pulling in new customers. if you have some weight to throw around, i would consider it one of my preferred methods to secure a loan.

    Quote Originally Posted by Front_Porch View Post
    As someone who has both worked with brokers and direct lenders, I would respectfully disagree.

    The broker is going to get paid to make the loan happen, and it's in their best interest to shop lenders until they find someone who will loan to the builidng.

    With a bank, they have the products they have, and they're not going to switch 'em around for you.

    ali r.
    {downtown broker}

  7. #217
    http://tinyurl.com/2ag28z Front_Porch's Avatar
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    If you can promise to bring assets in, great, that works.

    But everything I own is at one bank where I am a "Gold" customer and they did a fine job for me on my mortgage at my primary residence and on my mortgage at my secondary residence, and then they screwed me on my HELOC (strike one) and then misapplied a mortgage payment (strike two) which took three years to fix and even became a chapter in my book because I was so frustrated. (Guess what strike that was?)

    Now I'm fairly stuck because most of my financial life is pretty intertwined with this bank, and the threat to leave is nowhere nearly as important to them as the flirtation to come over.

    In hindsight, I wish I had used a mortgage broker who would have explained to me how I was getting reamed on the HELOC (it didn't occur to me to distrust people who had already done a pretty good job on two mortgages) and the next mortgage I get I'm using a broker because I think he has more leverage than I do.

    ali r.
    {downtown broker}

  8. #218

    Default Offerings on new construction

    what type of negotiations are people getting now on new developments...do you see people coming in at 10% below asking price or only negotiating on closing costs?

  9. #219
    http://tinyurl.com/2ag28z Front_Porch's Avatar
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    I haven't heard of any new development accepting 10% below list EVER, would love to hear anecdotes if anyone's got them.

    ali r.
    {downtown broker}

  10. #220

    Default new dev negotiations

    Quote Originally Posted by Drexel View Post
    what type of negotiations are people getting now on new developments...do you see people coming in at 10% below asking price or only negotiating on closing costs?
    I haven't heard of anyone negotiating 10% off new dev.. $10k is more reasonable in some areas. Particularly Harlem.

  11. #221

    Default Lumiere facade renovated already !

    man , this builing on west 53 st off of 8th just
    was built around 2005 and already there is work on the outside.
    the building is covered with protection netting.
    I asked the doorman whats going on and he said there is exterior balcony work.

    Hate to see what monthly maintenance they have to pay to do this .

    Bad construction i guess

  12. #222

    Default

    Ali, I agree that one of the general advantages of (good) brokers is that they shop around for you. I recommended that christophergraz try a direct lender because he was questioning whether his broker was giving him the straight scoop.

    Quote Originally Posted by bananaman View Post
    christophergraz, my suggestion in this situation is to go to a direct lender(s), rather than through a broker. This removes one person from the mortgage approval process and puts you in direct communication with the lender(s). You are more likely to get straight answers regarding your situation and condo/building.
    Quote Originally Posted by Front_Porch View Post
    As someone who has both worked with brokers and direct lenders, I would respectfully disagree.

    The broker is going to get paid to make the loan happen, and it's in their best interest to shop lenders until they find someone who will loan to the builidng.

    With a bank, they have the products they have, and they're not going to switch 'em around for you.

    ali r.
    {downtown broker}

  13. #223

    Default Mortgage commitment with no signature?

    Hi folks. Firstly, thanks for all the useful input that you've provided from my original posting.

    This broker floated rates that seemed higher than usual, quoting the "new condo" factor as the reason. I mentioned the rates that I was getting from other lenders (which were lower but not lowball IMHO), his rates magically fell back into line. :-) He did claim that one of the two lenders he tried rejected the loan application due to the new condo situation.

    (Note: I originally posted a paragraph about signatures on commitment letters here. But I seem to have gotten some bad advice from the junior lawyer working on my case, which has since been corrected by the senior lawyer. So I've edited this post to remove what is now irrelevant stuff.)

    Regarding mortgage broker vs direct lender... I have a straightforward transaction, good credit, and a good financial situation. The new condo issue seems hit or miss -- either the lender rejects outright, or they accept it with no additional effort required. I definitely would have preferred the greater visibility of a more direct approach with the lender. Worst case, I might have had to try a 2 or 3 lenders before I got a hit, but I think I could have gotten it sorted out.

    I'd recommend a mortgage broker only if you've got credit troubles, or a complex or unusual case. It's advice I'd heard before but didn't take seriously enough.

    That being said, aside from seeing how far I'd be willing to go on the rate (that is, on his commission), I don't think this broker has done anything wrong or unethical. Keeping fingers crossed until closing!
    Last edited by christophergraz; April 23rd, 2008 at 07:35 PM.

  14. #224
    http://tinyurl.com/2ag28z Front_Porch's Avatar
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    Christopher, when is your closing scheduled?

    ali r.
    {downtown broker}

  15. #225

    Default "Substantially Completed"

    I'm in contract for a new construction and received an amendment stating that the building will be "substantially completed" by or on June 1, 2008. I was wondering if there is a definition as to what that should mean like, the building is completely closed in, or say closed in and walls up and now working on interiors. Or anything in between?

    And are they required to file something like this because they are 9 months behind the stated "substantially completed" date in the offering plan?

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