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July 20, 2009
Buying With No C of O?
Hi, We are closing on the sale of our house in a few weeks and we found a condo in a small 4 story bldg(6 units, 3 are In contract) and would like to put in an offer. However there is no C of O yet. Can we obtain a mortgage? Do we have to wait until they have a C of O to move in? I will consult my lawyer obviously once my offer gets accepted, just wanted to hear your thoughts. Also the condo seems to be priced right for this market, but should we still submit an offer at 15% off the newly reduced asking price?
Thanks so much!
Comments
Yes you can still obtain a mortgage for a condo in a building that doesn't have a C of O yet. However, it could be more difficult if the mortgage broker has reason to believe that the development will have serious trouble in obtaining one eventually. If that's the case, then you probably shouldn't buy there anyhow.
You cannot legally move in if there is no permanent or temporary in place. It would defeat the entire purpose of a C of O if you could.
Posted by: davfgreene at July 20, 2009 12:42 PM
Yes you can get a mortgage HOWEVER....
1. The bank will need checked to see if the condo is viable in the long term. Meaning there are enough in contract and the general finance is solid.
2. There must be enough in contract by Closing or the bank will refuse to Close.
So you need enough in contract to get an approval and to Close.
The condo will get a Temporary CoO, that will be enough to close. Eventually (several weeks to several months later) it will get a permanent CoO.
Posted by: crimsonson at July 20, 2009 12:57 PM
Yes you can get a mortgage HOWEVER....
1. The bank will need to check to see if the condo is viable in the long term. Meaning there are enough in contract and the general finance is solid. This is done via a developer questionnaire and some other processes.
2. There must be enough in contract by Closing or the bank will refuse to Close.
So you need enough in contract to get an approval and to Close.
The condo will get a Temporary CoO, that will be enough to close. Eventually (several weeks to several months later) it will get a permanent CoO.
Posted by: crimsonson at July 20, 2009 12:58 PM
Developer can't close without TCO (temporary certificate of occupancy) which is what bank also needs to close on mortgage.
CO can be delivered later.
Posted by: chas at July 20, 2009 2:55 PM
Even if you have a temp C of O, a developer could leave you stranded without a final C of O. I would not close without an escrow amount for obtaining the final C of O should the developer not follow through.
Posted by: maeve at July 20, 2009 4:52 PM
you can go ahead and pursue it, but get a good lawyer to protect you. back a couple of years ago, most people bought in early like this, but condos were funded and sold out. now, you run the risk of development running of dollars. just do some research, etc... and, sure, ask for more off.
Posted by: wine lover at July 20, 2009 7:09 PM
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