Brokers and salespeople are in the unique position of being the first to know the property is for sale. There are certain questions that can be asked and documents that can be obtained which can disclose potential problems. Each type of property is different. Each has its own set of issues that must be considered when taking a listing. Below are issues dealing with the three most common residential property types. This list is not exhaustive just a guide. Again each property will have its own unique set of concerns. It is the seasoned and well trained real estate salesperson who will be able to predetermine these issues and resolve them so they will not interfere with a smooth transaction.
The first type of property is the Condominium Unit. A Condominium owner holds “fee simple” title. This is the highest form of ownership under the law and entitles the property owner to full enjoyment of the property, limited only by zoning laws, deed or subdivision restrictions or covenants, and in the case of Condominiums, the ownership is subject to the Condominium Declaration. The Declaration is a recorded document which legally establishes the structure as a condominium. The Declaration will refer to the offering plan.
• Obtain A Copy Of The Offering Plan: The offering plan sets forth all information concerning the condominium building including each unit interest and the percentage of the “common elements” associated with each unit. The Offering Plan will also set forth the rules and regulations governing the Condominium. The Offering Plan will be amended from time to time and you must obtain a copy of all amendments. In addition you should obtain at least two years of the buildings financial statements. The buyer’s attorney will want to review these documents before the deal proceeds. In order to avoid any delay in getting the deal to contract you must insure that these documents are ready for immediate review.
• Mortgage Lenders Are Important: Lender’s have guidelines before they are willing to provide Mortgage financing to a purchaser’s of a condominium. The Condominium must be scrutinized and approved. The Lender’s want to insure that the building’s finances are in order and the insurance and bonds are adequate to protect the banks interest. Lenders keep a database on approved projects. In order to avoid a delay and possible financing denial the listing agent should determine which lenders are currently lending in the building. This information should be given to a prospective purchaser and it the deal should be conditioned upon purchaser applying for loan financing with a lender who has approved the building. This holds true with Cooperative Apartments as well. You may have an extremely qualified buyer with a pre-approval from a reputable mortgage lender, however if the building is not approved you can experience a tremendous delay while the lender obtains all the information they will require to obtain approval. If the building is already approved by a specific lender, you know that you have already cleared one tremendous hurdle. If you find a building that is not approved by any lender, you can reach out to a lender you are familiar with and see if they will approve the building without an active deal. Many lender’s will go ahead and pre-qualify a building so that they can obtain future deals.
• Make Sure Any Improvements Have Required Approvals: Any interior renovations or modifications should have been approved by the Condominium Board. You should be familiar with the property and should be able to determine if there have been any improvements to the unit. You should determine early on if the improvements were done with board approval and if there were possible structural changes that should have required a change to the Certificate of Occupancy. It is not that uncommon to find that units have been combined or walls added or moved to reshape or partition rooms. These will always require board approval and often an updated Certificate of Occupancy. While it is difficult to have such work done without condominium knowledge, you should get all approval paper work in order. It should be made immediately available for the prospective buyers. In the event this work was done without proper approvals, the Seller will be able begin work to rectify the problem which will avoid delaying closing.
• Be Aware If The Condominiums Right Of First Refusal: Since a Condominium Owner owns the property in “Fee Simple” the Condominium Board can not specifically deny a purchaser’s right to purchase the unit. They can, however exercise their “Right of First Refusal” and buy the unit from the seller under the same terms as the prospective buyer. They are given this right under the terms of the Condominium Declaration. The Condominium board can, in effect, use this to weed out what they may consider to be an undesirable neighbor. Simply avoid a transaction they are against such as where they feel they purchase price is too low Most condominiums will require potential buyers to fill out a complete application before they will waive their right of first refusal. Again, this right is not often exercised, but you will not be able to close until the waiver is received. Most Condominiums are given 30 days to review the application and issue the Waivers. Any delay in providing this material to the board can cause a delay in closing.
• Get A Copy Of The Deed And Determine Open Liens On The Property. It is a good idea to determine who the actual titled owners of the unit are. Obtain a copy of the Unit Deed. Also determine what liens may be against the unit. Mortgages, Judgments etc. You can do this by obtaining a preliminary title search; this can prove to be a real time saver in the event there is a problem. One such problem is where the property has been placed in an irrevocable trust. Some owners do not realize that their estate plan has put the property in a trust that would require additional parties to be involved in the sale and in some cases court intervention would be necessary before the property can be sold. In addition, in order to have a valid listing agreement you must have all those who have a right to sell the property sign the listing agreement. It is in the brokers’ best interest to insure that they know who owns the property. A preliminary title search can also determine all liens that currently exist. While most sellers will know what mortgages they have and approximately how much they owe, they will not know if all prior mortgages or other liens have been satisfied of record. A preliminary title report will show if any open liens exist. Once a Mortgage is filed the only way it can be removed is by filing a Satisfaction of Mortgage that has been prepared and signed by the lender. It is not uncommon to have a mortgage that was paid off year ago still showing up on record due to lenders failure to file a proper Satisfaction. The seller may have the original Satisfaction of Mortgage in their records, however, if they do not, they will have to obtain a Satisfaction from their prior Lender. This can cause a tremendous delay. Many lender’s have been taken over or merged with other lenders, and many are no longer in business. If a Satisfaction cannot be obtained the only way to remove the lien of record is by court order. This may take a lot of time and expense. The sooner this is determined and acted on, the better.
• Find Out About Common Charges And Assessments: Common charges are the monthly amounts due to the Condominium to pay the expenses necessary to run and maintain the Building(s) common areas. The amount is based on the unit owner’s proportionate share of the common elements as set forth in the Declaration. Special “Assessments” are amounts the Condominium Board determines are necessary to fund some type of project they feel necessary. Assessments are commonly used to fund capital improvements such as structural or equipment repairs. You must determine current common charges and if there are any current assessments. You must also ask seller if they have received any notice, or have any knowledge of any increases in common charges or any planned assessments. Seller is going to have to represent their knowledge of this in the Contract of Sale, so in order to avoid problems later on this information must be made available to a prospective buyer.
• What Is Included With The Condo: You must determine what is being sold. Some units have storage or parking spaces included right in the unit Deed, as either separate “fee” or “deeded” ownership or as a limited common element set aside for the exclusive use of the unit owner. Separate Deeded spaces may be considered and contracted for separately. Other developments may have non-transferable rights and the new owners would be put on list to obtain the rights to parking and storage. This must be determined and disclosed to prospective purchasers.
• Detached and Semi-Attached Houses and Townhouses: Single family homes semi detached and townhouses are forms of ownership where the Seller owns and is transferring the structures and all the land beneath it. You still may be subject to covenant, restrictions, and governmental restrictions, however, there is no board to worry about and nobody that can arbitrarily prevent the deal from going forward. There are nevertheless just as many obstacles that can get in the way of a smooth transaction.
• Making Sure That The Property Has All Required Building Approvals: It must be determined what Certificates of Occupancy or Completion are present and what may be required. In order to construct a building, or perform any renovations, a permit must be obtained from the municipality where the property lies. An application for a building permit is filed and if approved the property owner can commence construction. Once complete, a Certificate of Occupancy, or Completion will be issued. This insures that the structure can remain. It is important to become familiar with the property, and the municipality where the property lies. It is not good enough for a Seller to simply say “I have not made any changes” or “I bought it like this”. It is possible that the seller may have purchased the property without the required Certificates but it does not make them any less responsible for having them. In some cases they may refuse to obtain the required Certificates and demand that the house be sold as is. So now, before wasting your time, you can determine if you wish to accept the listing, and if so you can now make sure that you find a buyer willing to accept the property “as is”. If this is not discovered or disclosed early on it will not be picked up until the purchaser does their title search at which point you may lose the buyer or if they wish to proceed forward the Seller will then begin the process of obtaining the required Certificates.
• Avoid Possible Title Issues: A preliminary title will be able to find out any possible violations that may exist on the property. A FHA lender will not allow the file to close with an escrow, nor will they allow any violations to exist, so it needed to be resolved before they will permit a closing. If seller had known at the time the property was listed they would have had plenty of time to resolve the issue and it would have not become an obstacle. There are a Myriad of violations that may exist. The problem is that most do not involve the simple payment of money and require building department involvement and inspection. These bureaucrats do not care that you are trying to get the property closed so it is important that these issues be discovered as soon as possible..
• There Will Be A Property Inspection Performed: because Morgan Utah is a “Let the Buyer Beware” (Caveat emptor) state. Prospective buyers will often have a Home inspection performed. If a seller is not familiar with the condition of there property and the possible problems that may be disclosed, they will be at a disadvantage in negotiating a price. It is important that the houses structure and all mechanical and electrical systems be evaluated to determine potential issues. Where easy repairs are available the seller should be encouraged to undertake them. When major issues are present repairs should be considered, but if impractical they should be disclosed and the buyer should be aware that the condition is factored into the agreed upon price. This will clearly not deter the buyer from raising additional issues, at their inspectors urging, but it will avoid any major hurdles. If major issues were discussed in advance and the buyer went through with the cost of the inspection with that knowledge, chances are they are firmly committed.
• Cooperative Apartments: Many feel that the most frustrating property to sell is a Cooperative Apartment. A cooperative Apartment is a form of ownership that is not considered real property. The cooperative apartment building is owned in “Fee Simple” by a corporation formed for the sole purpose of owning the entire building. A purchaser of a Cooperative Apartment is actually purchasing shares of stock in the Corporation which owns the building. As a shareholder, the purchaser is also entitled to a proprietary lease to a specific unit allocated to the shares they purchased. Due to the corporate structure and the Corporations ownership of the building the Board of Director’s of the corporation has broad powers in running the building. All prospective purchasers must be approved by the board and can be rejected for no stated reason whatsoever.
• Know The Boards Rules And Requirements: You Can Avoid Many Obstacles By simply knowing what the Board requirements are. It is imperative that you are familiar with what the maximum loan the board will allow a purchaser to get in relation to the sales price. Some Coops will not allow any financing at all, while others will limit the amount of the loan to a certain percentage of the purchase price. Each building has its unique requirements and it is up to the salesperson to find this out so that it can be marketed appropriately and proper purchasers can be found. It also helps to find out about previous purchasers, who they have accepted and who they have rejected. Your buyer, no matter how qualified, or wealthy is only acceptable if they are acceptable to the board. Some buildings are very tough on certain professions. They may reject all “trust fund” kids who do not require a mortgage, have a great income, but do not work. They may see them as young irresponsible people who will not mesh well the other owners. Other buildings may accept such buyer’s with open arms. You should not attempt to fit a square peg into a round hole. When it comes to coop boards it is best to go along with their requirements.
• Obtain Copies Of The Stock And Lease: If there is currently a loan on the unit the original Stock and Lease is most likely being held by the Lender. In order to secure their loan lenders insist on taking possession of the original Stock Certificate and Proprietary Lease until the loan is paid in full. Obtain the lender’s information. Make sure that the Seller’s attorney immediately notifies the Lender that they are selling a Coop and that they request the original stock and lease. The failure to timely order the payoff causes many delays in cooperative closings. If the Seller does not have a loan make sure that they are in possession of the original Stock Certificate and Proprietary Lease. If they cannot locate the original they will have to obtain a replacement with the Board. Many Boards require that a Fidelity Bond be issued before they will issue a new Stock and Lease. This protects the Coop against possible fraud and will take time to obtain.
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Morgan, Utah
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Morgan, Utah
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Morgan’s Old Commercial Street, March 2008
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Location in Morgan County and the state of Utah
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| Coordinates: 41°2′28″N 111°40′34″WCoordinates: 41°2′28″N 111°40′34″W | |
| Country | United States |
| State | Utah |
| County | Morgan |
| Settled | 1860 |
| Named for | Jedediah Morgan Grant |
| Government
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| • Mayor | Ray Little |
| Area | |
| • Total | 2.96 sq mi (7.68 km2) |
| • Land | 2.96 sq mi (7.68 km2) |
| • Water | 0.00 sq mi (0.00 km2) |
| Elevation | 5,069 ft (1,545 m) |
| Population
(2010)
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| • Total | 3,687 |
| • Estimate
(2019)[3]
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4,273 |
| • Density | 1,441.63/sq mi (556.59/km2) |
| Time zone | UTC−7 (Mountain (MST)) |
| • Summer (DST) | UTC−6 (MDT) |
| ZIP code |
84050
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| Area code(s) | 385, 801 |
| FIPS code | 49-51910[4] |
| GNIS feature ID | 1430488[2] |
| Website | Official website |
Morgan is a city in the U.S. state of Utah and the county seat of Morgan County. It is part of the Ogden-Clearfield metropolitan area. It is named after Jedediah Morgan Grant, a leader in The Church of Jesus Christ of Latter-day Saints who served as an apostle and as a member of the LDS First Presidency under Brigham Young in the mid-1850s. As of the 2010 census, the city population was 3,687 people and estimated at 4,260 in 2018.[5] Morgan is also a location where some of the movie Troll 2 was filmed in 1989.
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