What Difference Does a Good Offer Make if Nobody’s Listening?

By
Real Estate Broker/Owner with Daytona Condo Realty, 386-405-4408

Friday is the day when the County schedules foreclosures for Daytona area properties. Used to be 2 days a week on average 30-35 properties a day. Not anymore. Today after a few cancellations, which is very common, there were only 5 properties left on the foreclosure list.

I drove all the way to Deland, our county seat, because there was one condo-hotel unit in Oceans Jewels Club going on the chopping block. The foreclosing bank is known for the deepest discounts, starting from 10 cents on a dollar of the balance of the loan. I did not expect 10%, but I figured that it was making sense if they would go for 40%.

I knew that the amount owned to the association was $16K, and it was making this deal not really likely. By law, no matter how the Buyer obtains the title, s/he is liable for the debt to the association in full. And if s/he does not pay in 30 days the Association can foreclose and end up owning the unit free and clear.

However, if the lender forecloses, then the Lender has to pay either one year's worth of maintenance fees or 1% of the original loan amount, whichever is less.

We tried to call the CAM (Community Association Manager) and ask whether the Board would consider accepting less money. It made perfect sense, as if the unit is foreclosed by the bank, then the association will only get about $400 (1% of the original loan amount, which was only about $40,000).

But we could not reach the manager.

While on my way to the auction, she called and explained that last time they had a similar situation, they only agreed to knock down late fees and interest, so we would probably have to pay $14K out of $16K if we buy the unit.

15 minutes before the start of the auction, I learned that the minimum the bank would accept was not 40%, as I hoped, but 60%, and it made the deal a loser. Just in case I called and asked to be connected to the manager, who again was out of the office, but they told me that she had already explained to me everything, so what on earth I wanted from them?

10 minutes later the bank took it for $100. There was no bidding. Sure, it made no sense. This is a shameful story how today the Association ended with $400 instead of $4,000 that I was offering.

What difference does a good offer make if nobody’s listening?

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Rainmaker
1,085,521
Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA
LandlordWhisperer

HOAs what have few legal resources to correctly advise them are costing EVERY UNIT OWNER money in the long run.....Jon, it is GREAT you can tell the story 

Jun 02, 2012 03:12 AM #1
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Selling Daytona paradise for heavenly good prices

Wallace - I could right a book about stupid decisions made by the Boards, their lack of understanding the laws governing the Associations, and unbelievable lack of business sense.

Jun 02, 2012 07:17 AM #2
Rainmaker
1,224,345
Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents
Lyon Real Estate - Sacramento, CA
Put 40 years of experience to work for you

This was probably a case of a bird in the hand is worth more than 2 in the bush but they wanted to play the odds instead. Some people like the all or nothing game.

Jun 02, 2012 07:46 AM #3
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Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

You can't fix stupid Jon with the Boards. Sounds like you know all the realities of the games being played with this category of property.

Jun 02, 2012 08:49 AM #4
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Selling Daytona paradise for heavenly good prices

Elizabeth - this is absolutely true. But I would n't fault the Board, I think this is a problem with too busy managers, who give poor advice to the Board.

I can't believe tha the Board would make such decision knowing how it would affect them. But, actually, I have seen them making even more crazy decisions...

Jun 02, 2012 08:59 AM #5
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Selling Daytona paradise for heavenly good prices

Gary - Honestly, I don't think that it is just the Board. I have a feeling that I could talk to the Board and show them the cards and explain how it works, they could look at it differently.

Oh, well.

Jun 02, 2012 01:11 PM #6
Rainmaker
255,968
Tim Bradley
Contour Investment Properties - Jackson Hole, WY
Commercial Real Estate Expert in Jackson Hole, WY

Take your offer to the bank and buy it that way. Silly CAM.

Jun 02, 2012 08:36 PM #7
Rainmaker
97,265
Jennie Miller, PLLC
Buy/Sell/Rent Your Home in Phoenix Metro Area - Scottsdale, AZ
AZ Broker - Real Estate Services 480-382-9681

The number of foreclosures has definatley slowed down here in Phoenix as well. 

Jun 13, 2012 10:03 PM #8
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Selling Daytona paradise for heavenly good prices

Tim - Hmm, how did you know. that is what I am trying to do now. Good thinking.

Jun 13, 2012 10:12 PM #9
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Jon Zolsky, Daytona Beach, FL
Daytona Condo Realty, 386-405-4408 - Daytona Beach, FL
Selling Daytona paradise for heavenly good prices

Jennie - seems like trends are very similar

Jun 13, 2012 10:13 PM #10
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