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

	Aug ’09	Sept	Oct	Nov	Dec	Jan ’10	Feb
Agent Visits	10 (start Aug. 13)	11	12	3	15	12	9 (thru Feb 11)
Listing Price	$217,500	$217,500	$217,500	$209,000 (Nov.12)	$199,950 (Dec.03)
Offers Net		$207,800	$209,000
Listing Status	Active Aug. 13	Pending Sept. 14	Active Oct. 02 Pending Oct. 17	Active Nov. 12	Active	Active	Active

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.

(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.