As I write this, 72 agents have set foot into this condo since I first listed it on August 13, 2009.

I fol­lowed up with all these agents. The replies by two most recent who sent me feed­back included these com­ments: The unit shows very nicely and it is priced right for sure. and I loved the condo…  Sould sell soon.

It should have sold twice.

Two buy­ers, two offers, two mutual agree­ments
With an agent vis­it­ing this Kirk­land condo every third day there should have been an offer, right?  There were two. There were two offers and two mutual agreements.

Two buy­ers unable to pay
What hap­pened? Buyer num­ber one, pre-approved by his lender at time of offer did no longer qual­ify for  financ­ing 10 days before clos­ing.  Buyer num­ber two, also pre-approved by lender at time of offer,  allegedly forged his income doc­u­men­ta­tion and the trans­ac­tion was can­celled three days before clos­ing. This time, my client got to keep the earnest money.

Have we learned noth­ing?
There is a say­ing in this busi­ness that “buy­ers are liars.”  That’s per­haps a bit strongly worded. The real­ity is that some buy­ers don’t reveal all they should to their agents and lenders because  some­times the desire to own may be greater than the desire to own up to finan­cial real­i­ties. That this is still hap­pen­ing in the cur­rent mar­ket is truly astonishing.

The two failed trans­ac­tions have hurt the seller. Poten­tial buy­ers search­ing the web and the aver­age agent are won­der­ing why this condo is stilll on the market.

Gov­ern­ment “help” can hurt
The sec­ond fac­tor which hurt this condo and many other likely first-time buyer prop­er­ties was the exten­sion of the first time  home buyer tax credit. Sched­uled to expire at the end of  Novem­ber 2009, the exten­sion until April 30th took away the sense of urgency. As a result, agent vis­its to the prop­erty dropped dra­mat­i­cally in November.

Time­line and events

Short sales change mar­ket
The third rea­son this condo  is still on the mar­ket are an increas­ing num­ber of  short sales of sim­i­lar prop­er­ties. There were no 2-bed short sales in this con­do­minium com­plex in 2009. Now there are two.

Look­ing at the bright side
Through­out these six months, my clients have been help­ful in every way a seller can be help­ful. I would call them my friends although we’ve never met in per­son. They searched for “Kirk­land Condo” on the web. They found me and liked what they saw. We were all so close twice to sell­ing this condo. The third time will be a charm.

Although some poten­tial buy­ers don’t like being on the ground floor or wish they could bring their dog (only cats allowed), there’s  noth­ing “wrong” with this condo.

Condo con­ver­sions remain an attrac­tive choice for first-time buy­ers.

(Note: this is an update of an arti­cle I wrote more than a year ago for my web­site GNADE.com .)

Although the Seat­tle real estate mar­ket has cooled off since 2006, condo con­ver­sions are still an attrac­tive option for first-time home buy­ers. With good rea­son because often it’s the only afford­able option.

Over the past four years, devel­op­ers have plucked one east­side apart­ment com­plex after another from the Seat­tle east­side land­scape and cre­ated new real estate for sale. Some of the more recent con­ver­sions are in or near down­town Red­mond, such as the River­walk at Red­mond — built orig­i­nally in 1983, The Boul­der (1985), and the Bella Vista (1981). A con­ver­sion in progress is the Cham­pagne (1969) in Belle­vue near 148th on NE 8th Street.

Option pack­ages and earnest money

First, the dol­lar fig­ure adver­tised is usu­ally just the “base price.” Option pack­ages can add any­where from three to ten per­cent. Some sell­ers ask for half of the option pack­age price to be paid at the time the buyer and the seller have a “signed-around” pur­chase and sale agree­ment . This option pack­age down pay­ment is often not refund­able. The earnest money itself can be steep, espe­cially at the begin­ning of a con­ver­sion project.

Poten­tial hur­dles

The ten­ants (lessee) rights are pro­tected by their lease con­tract and they will usu­ally vacate the premises at the end of the lease. This means that a com­plex is not nec­es­sar­ily being con­verted in the most log­i­cal fashion.

In the cur­rent credit mar­ket it is hard enough to find a lender. The num­ber of lenders for con­ver­sions is already lim­ited because the con­dos are “non-warrantable” with the Depart­ment of Hous­ing and Urban Devel­op­ment (HUD). Often, the seller adver­tises a pre­ferred lender and, in addi­tion, offers other finan­cial incen­tives for buy­ers using that lender.

Find out the details; then get involved.

The con­ver­sion usu­ally involves the gut­ting of the inte­ri­ors, new floor­ing, new inte­rior build-out, new doors, paint­ing, trim, fin­ishes, fix­tures and appli­ances. Because in a con­do­minium com­plex a buyer also buys a per­cent­age of the com­mon areas , it’s impor­tant to know exactly what’s being improved or con­verted .

I rec­om­mend to my clients to join the Board of the Home Own­ers Asso­ci­a­tion at least for the first year. That way they can play a role in revis­ing the ini­tial rules of the asso­ci­a­tion, such as allow­ing pets and des­ig­nat­ing vis­i­tor parking.

Buyer Beware!

Given the spe­cial cir­cum­stances of condo con­ver­sions is pre­cisely why a buyer should be rep­re­sented by an agent . In the more buyer friendly mar­ket of 2008, some developers/sellers are now adver­tis­ing “agent friendly,” mean­ing we “need you to bring the buyers.”

Invest­ing in con­ver­sion con­dos

The many condo con­ver­sions have con­tributed to increas­ing rents in the Seat­tle area . So buy­ing a unit in a con­do­minium con­ver­sion project with the idea of rent­ing it out may be a sound invest­ment. The num­ber of non-owner occu­pied is usu­ally lim­ited; so it pays to check first.