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Hello,
Quick question. Condo has implemented $11,000 assessment. Two options - payment in full or 7.25% for 72 months. I am leaning towards making a full payment to save on percentage however, I am also thinking if I have to sell into three years, this assessment will not be split between buyer and seller since I paid in full. What would you do?
Thank you(Florida)
Status:
"I didn't do it, nobody saw me"
(set 22 days ago)
Location: Ocala, FL
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Remember that in FL, you would have to report any pending or current assessment if you were to sell a property/home. It would be likely that you would have to offer some reduction in price if you were still paying a monthly assessment. I suggest you speak with a realtor about this, even if you aren't selling right now.
Status:
"I didn't do it, nobody saw me"
(set 22 days ago)
Location: Ocala, FL
6,504 posts, read 10,420,082 times
Reputation: 7982
Quote:
Originally Posted by MikeJaquish
An unpaid assessment balance will create an encumbrance on the condo title, won't it?
Won't you have to pay it off to clear the title to sell?
Mike, you are correct. My error for not clarifying. The current owner has the obligation to pay any assessments levied by the association. Usually that is resolved at closing during the distribution of funds to the seller. Thanks for catching that.
Mike, you are correct. My error for not clarifying. The current owner has the obligation to pay any assessments levied by the association. Usually that is resolved at closing during the distribution of funds to the seller. Thanks for catching that.
I'm not so sure that is correct. In The Villages (Florida), all of the homes start life with a very sizeable assessment, or "bond". This debt can be paid in full at any time or can be paid over many years with interest.
Some sellers opt to pay it in full. Some opt to make monthly payments and pass any remaining bond debt along to the buyer when they sell. Generally speaking, I think that the consensus opinion is that it is better for the owner/seller to pass the remainder of the debt along to the buyer because fewer buyers want to pay the extra amount at closing to purchase the house.
Logic might tell us that it's "six of one and a half dozen of the other", but experience tells us that it's generally better for the owner to simply pay the assessment in monthly payments when due and pass along any remainder of the assessment to the new owner/purchaser. Of course, the advertisement of the property and the purchase agreement should make the presence of this debt/bond clear to any potential buyer.
Also, having lived in a condo in Florida and having dealt with assessments, if you need to sell, your condo will go faster than others because there’s no encumbrances. Your home will get an uptick in desirability.
ok, so it sounds like it's best to pay in full, save almost $3,000 in interest, and have better negotiating power when selling. Would I be able to include this in the MLS? Something like - 7 year assessment in progress but owner paid in full. Will that make a difference in selling?
Thank you all for helping!
I'm not so sure that is correct. In The Villages (Florida), all of the homes start life with a very sizeable assessment, or "bond". This debt can be paid in full at any time or can be paid over many years with interest.
Some sellers opt to pay it in full. Some opt to make monthly payments and pass any remaining bond debt along to the buyer when they sell. Generally speaking, I think that the consensus opinion is that it is better for the owner/seller to pass the remainder of the debt along to the buyer because fewer buyers want to pay the extra amount at closing to purchase the house.
Logic might tell us that it's "six of one and a half dozen of the other", but experience tells us that it's generally better for the owner to simply pay the assessment in monthly payments when due and pass along any remainder of the assessment to the new owner/purchaser. Of course, the advertisement of the property and the purchase agreement should make the presence of this debt/bond clear to any potential buyer.
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Chas863, CDD fees, which is what you’re describing, are treated like property taxes in Florida, and are usually paid over a set period, 20 to 30 years. They cover the cost of infrastructure in the development—water, sewage, street lights, roads. They are set up to alleviate the cost to the cities, who then don’t have to raise taxes for all residents to cover the cost of the new development. That way, only residents of the new development pay the CDD bond.
An HOA is considered the enforcers of all development policies governing landscaping, amenities and other rules. The HOA is responsible for the ongoing upkeep as well. The CDD bond cost and HOA fees are two totally different categories.
ok, so it sounds like it's best to pay in full, save almost $3,000 in interest, and have better negotiating power when selling. Would I be able to include this in the MLS? Something like - 7 year assessment in progress but owner paid in full. Will that make a difference in selling?
Thank you all for helping!
Your best bet is to talk with a local realtor. I don’t remember what mine did as it was many years ago. I just know my condo, in a slow market back then, sold in just a few days. My neighbors were shocked, but then again, many were retired and lived on a fixed income and most had stretched out their assessments.
Chas863, CDD fees, which is what you’re describing, are treated like property taxes in Florida, and are usually paid over a set period, 20 to 30 years. They cover the cost of infrastructure in the development—water, sewage, street lights, roads. They are set up to alleviate the cost to the cities, who then don’t have to raise taxes for all residents to cover the cost of the new development. That way, only residents of the new development pay the CDD bond.
An HOA is considered the enforcers of all development policies governing landscaping, amenities and other rules. The HOA is responsible for the ongoing upkeep as well. The CDD bond cost and HOA fees are two totally different categories.
I didn't say, nor imply, that the bond cost was like an HOA fee. Clearly, it is NOT like an HOA fee because the bond has a specific limited amount to be paid, after which it is paid in full and NEVER again needs to be paid. HOA fees go on forever.
I'm simply saying that the buyer will typically choose to buy the house that requires the least amount of money out of his pocket at closing, all other factors being equal.
Example: If House A is priced at $399K with a $35,000 bond which is payable at $290 per month, and House B (which is identical in all respects) has no bond, but is priced at $434K, most buyers will opt for purchasing House A because it is less money out of pocket. Besides, the buyer always has the option of paying off the bond later if he so chooses.
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