Found a condo that I am greatly interested/invested in. After submitting a written offer, I was informed that the building the unit is located in has structural issues, and that the onus of responsibility would be partially on me.
I am ready to walk away, or go “all in”, I’m totally at a loss which is the better choice. Just to be clear, the unit is in the 500-600K range, putting the percent’s noted earlier into context. I am a first time home buyer.
Some facts:
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Offer has been submitted but not accepted. The seller is not entertaining any other offers, according to the listing agent.
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Building was constructed in 2008
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HCOL Area within a major city
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Commercial/residential mixed zoned property (First floor leased by a bank)
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Bank has 25% stake ownership within the building
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Unit has 13.7% stake of ownership within the building.
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HOA Board chairperson is currently lead by the folks that are moving out of the unit that I am attempting to move into. HOA to select new chairperson on their departure.
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HOA has been quoted $120K for structural repairs
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I have been provided an inspection report, as well as an engineering integrity assessment report, performed by 2 independent local organizations
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Seller is offering 3% Cash back to me as a closing cost credit. This would cover the cost of the repairs as currently quoted. I can potentially negotiate more.
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Engineering report effectively reads no chance of catastrophic damage, but the structural load on the concrete was more than the soil underneath could handle with moisture expansion & contraction, and that the south side of the building is settling as a result.
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Repairs will involve digging rods deep into the ground and attaching them with brackets to the building, 35 of them. These techniques do appear to work, and at skyscraper scale too.
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Cracking is appearing on south side of building where I am interested in a unit on the north side of the building.
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Property interior is gorgeous, and updated. Building has no vacancies. Unusually cheaper than surrounding community.
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The organization completing the work would warranty the labor, conditionally as long as no other party makes any changes ore repairs, but transferring to new tenants
https://i.imgur.com/AWsiTBn.png – Example of the structural damage https://i.imgur.com/ZPZchIr.png – Another https://i.imgur.com/fl7BPny.png https://i.imgur.com/1i2nUE5.png
Now, with all that out of the way, my concerns:
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Quotes were done as of December, by HOA but not voted on or executed as of yet
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Bank may prefer to leave rather than pay for their share of repairs. Unsure how to evaluate. There is no real indication they are prepared to do so, and this location is this local banks single branch location.
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Cost of repairs may exceed that which has been quoted.. potentially by a lot, due to the nature of the repair
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My agent doesn’t appear phased and is suggesting that I move forward with the offer accepted, and that all these details can be worked through during the contract legal review & property inspection process, and that there is no situation in which I would lose my EMD. I’m not sure that is accurate.
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Worst case scenario is south side of building continues to settle, eventually traveling up the roof of the building and into the north side dry wall.
I think that’s all the factual information I know. Would you go through with it? Are there red flags I may be able to ask/inquire that would help ease my concerns, that I haven’t noted? Has anyone seen anything like this? Typical in major cities? Any feedback is appreciated.
*Edited in more photos
Thank you.
