HOA defaults derail financing

REThink Real Estate

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Q: I'm looking to buy my first home, and I found this one condo complex in town that I fell in love with. They are only a couple of years old, but they're selling for about half of what they sold for when they were new -- and there are still some never-lived-in units being sold by the developer. I was outbid several times, and then my broker and I started to see a lot of the units we had lost come back on the market. We found out that the homeowners association (HOA) dues delinquency rate is 29 percent, so most of the contracts are falling apart because the lenders won't do the buyers' loans. Now there are a ton of units over there at even lower prices than before, but it seems like no one can really buy them. Are there any alternative ways to buy a condo when the HOA delinquency rate is this high? A: Your situation illustrates why I constantly advise condo owners to slash every other discretionary expense before they fall behind on their HOA dues. Almost nothing devalues...