The Serious Differences Between a PUD and Condominium

The Serious Differences Between

a PUD and Condominium

PUD and Condo (Condominium) ...

I'm sure you've heard or read these terms when talking or reading of something real estate-related.  They're kind of odd sounding.  Hard to forget.

But beyond their rather funny names, what are they? What are their characteristics?  And when you buy/own one, what determines legal ownership? 

First:  Condo (short for Condominium), is probably the most commonly heard of the two terms.  A Condo property (typically referred to as a "Unit") lies within a legally platted Condominium site having a legally formed "Condominium Association".  

A Condo property is established and recorded as such.  The recorded documents also establish "Declarations and By-Laws" and rules (known as covenants).  The rules outline, detail, and mandate how the Condominium Association runs.

In short, a Condominium is actually a designated legal method of home ownership ...

Condominiums share some similarities with PUDs.  And for that reason, anyone considering the purchase of a Condo should make sure to check what legal form of ownership and property they're considering.

To accomplish that, a potential borrower must check the Condo Declarations and Legal Description for the subject property.  Simply viewing the property does not reveal legal ownership.

Above I referred to Condominium Associations and the fact that they have "covenants".  It's wise for all prospective Buyers to educate themselves fully regarding the details of the Covenants/Rules for their potential new home prior to entering into a Contract to buy. (At this time, it's also crucial that potential Buyers obtain information regarding the financial "health" of their future Association.)

When a Buyer purchases a Condo Unit, they purchase the individual right to only their Unit.  The Homeowners Association "owns" the land on which the Units sit.   A new Unit Owner becomes an "equal owner" of the commonly owned facilities within the Condo project (should there be any) with other Condo Unit Owners.

Facilities and services found within their Condo Association can include Common areas.  Common Areas are defined as those areas of multi-owner real property meant for the exclusive use of all individual owners.  

These areas are maintained by the HOA with the Homeowners Fees/Dues paid by each Unit Owner.  These fees are typically paid monthly to the Homeowners Association or their professional management company, but other payment arrangements can exist.

• Examples of Common Areas are:  Hallways, Laundry Rooms, Storage Areas, Balconies, Patios, Mechanical Rooms, Parking Lots, Driveway Access, etc.
• Common Area Recreational Facilities can include:  Green Areas, Playgrounds, Water Retention Areas, Pools, Tennis Courts, Exercise Facilities, Security Gates, Party, Clubhouse, or Recreation Rooms, etc.
• Typical HOA Services can include:  Snow removal, landscaping, exterior maintenance of units and Common Areas, and more.

Homeowners Associations often have established rules that must be followed by property owners.  These rules come in the form of Covenants,  Conditions, & Restrictions ... known as CC&R.

Things commonly covered by the CC&R are:

• Noise Level Restrictions
• Smoking Restrictions
• Pet Ownership
• Use of Clubhouse, Pool, Tennis Courts, etc.
• Parking Restrictions
• More ...

Again, it's wise for potential buyers to educate themselves thoroughly regarding HOA rules prior to signing a contract for purchase.  Why?  Some HOA rules and regulations can prove to be a poor fit and not fulfill the needs of some Buyers.  Better to be aware and know this info upfront.

Second:  The funny sounding name PUD?  It stands for Planned Unit Development.   

The biggest difference between the two types of properties ... PUD and Condominium ... is a legal one.  PUDs are a different legal classification of ownership from Condos.  

Let me say that again ... 

The Buyer's legal ownership held in the two types of properties is different.  

PUDS feature ownership of an individually-owned parcel or site.  In other words, the unit owner owns the land on which the unit lies (and possibly even some land that surrounds it).  That is in stark contrast to Condominium ownership. 

PUDs can be made up of attached or detached units.  Planned Unit Developments can exist of condominiums, townhomes, single-family homes and even retail and commercial space may sometimes be found within these developments.

Like a Condo, a PUD is governed by a Homeowner Association (HOA) that mandates HOA Fees be paid by individual unit owners.  These HOA Fees cover the upkeep, maintenance, and repair of common areas and facilities.  

Because of the differences between these two properties legal ownership, I can't stress strongly enough once again how important it is that legal ownership of a property be firmly defined and established prior to a Buyer entering a purchase contract .  (If the Buyer is obtaining a mortgage to purchase the property, this will be of vital importance to the Lender also.) 

The legal ownership of the property cannot be determined by appearance or physical aesthetics of the property alone.  Other documentation or descriptions can contain clues as to legal ownership, but the only foolproof way to determine if a property is a PUD (or not) is via a review of the Covenants & Restrictions for the development.  

Although the names Condo, Condominium, or PUD may sound funny ... there's nothing funny about a Buyer contracting to purchase one legal form of property when they believe they are buying another.  It's why I stress the importance of potential Buyers not overlooking this first vitally important step ...  

Address all legal ownership questions prior to signing a real estate contract.

There are thousands of Condo and PUD units across Chicago and the Chicagoland suburbs, so it's critical that our area Buyers ... and the professionals representing them ... know and understand the pros and cons, unique qualities, and distinct characteristics of both these forms of legal ownership.  

Education is the best form of insurance you can provide yourself when it comes to transacting real estate and mortgage financing ...

* When in need of Mortgage info or service when buying, refinancing, or investing in a home in New Lenox - elsewhere in Chicagoland - IL & WI, contact me.
I'll be happy to put my 40+ years of mortgage experience and expertise hard to work on your behalf.
I'm easily found at:

Gene Mundt

Mortgage Originator - NMLS #216987 - IL Lic. #031.0006220 - WI Licensed

American Portfolio Mortgage Corp.

NMLS #175656

Direct: 815.524.2280

Cell/Text: 708.921.6331

eFax: 815.524.2281

gmundt@goapmc.com

www.genemundt.com

   

Gene Mundt, Mortgage Originator, an Originator with 40+ years of mortgage experience, will offer you exemplary mortgage service and advice when seeking:
Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago
and the greater Chicagoland region, including:
The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena,
Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook,
Romeoville, Naperville, etc.), DuPage County, the City of Chicago,
Cook County, and elsewhere within IL & WI.


Referrals are Appreciated and Welcomed

  

THEIR Goals, Not Ours. Serving Our Clients' Needs

THEIR Goals, Not Ours

Serving Our Clients' Needs

With schools celebrating the Spring holidays, we were lucky enough to have our grandchildren with us for a few days.  Needless to say, we were thrilled.  

As I'm sure other grandparents will attest, nothing is better than having your grandkids around.  It's a great opportunity to do some spoiling ... and that's just what we intended to do.  

One afternoon, my wife took the kids to the local mall.  Quickly growing kids with longer legs and arms means there's always a need for new clothes.  Gramma was in heaven shopping for her cuties.

As with most malls these days, this one had kiosks scattered in the mall aisles.  At one, a vendor approached my wife asking if she wanted to examine the fragrances she had for sale.  Marilyn declined the offer.

But this vendor wasn't going to be thwarted easily.  She again offered a spritz of fragrance to my wife saying that it would "enhance her day".  Again the vendor heard a "no" from my wife.  

The vendor didn't give up.  She then followed my wife to the entrance of a nearby store and spritzed her anyway.  Angrily, my wife gathered the kids and entered the store. 

Clearly, this vendor crossed the line.  They didn't take no for an answer.  They, via their pushy actions, ultimately did their business and product harm.  My wife will never buy their product now.  I'm thinking that's not the outcome they were seeking.

What this vendor didn't know (or obviously care) is that fragrances can be a trigger for migraine sufferers.  One sniff of the wrong smell can cause hours of intense pain.  My wife's had severe migraines for decades.  The vendor had placed her in danger.

But even beyond that important issue, this vendor placed their will and wishes above my wife's.  They assumed they knew better what was "good" for her.  

I think this tale provides a very important lesson for all businesspersons ...

We can think we're pretty smart.  We might think we know better than our clients what is "right" or even "good" for them.  What will fulfill their needs best ... what will deliver them the best results.

We may believe these things because we have years of experience in our field and have honed our expertise.  That all our experience and expertise lead us to sound conclusions and good outcomes.  

But ... in the end, the choices must remain our clients' ...   

My wife's relating of this story was pretty timely for me.  I've had recent borrowers in financing scenarios that I fear may ultimately be pursuing ... for lack of better words ... "questionable" purchases and paths.  My experience, expertise, and gut tell me so.  

In these cases, I have thoroughly explained their financing options to them and expressed my opinions and provided them my advice.  But ultimately, the final decision is theirs to make.   That can leave a professional somewhat frustrated at times. 

But my wife's experiences with the mall vendor served as a clear reminder to me regarding this fact.  Once my client has received all the info necessary to do so, their job is to make a final decision as to how to proceed.

My job as their Loan Officer is to assist them in doing that ... and achieving their goals ...  

* Are you hoping to buy or refinance a home or investment property in New Lenox, Will County, or elsewhere in the Chicagoland, IL/Wisconsin area?

Contact Me!  I'll put my 40+ years of mortgage experience and expertise to work answering your questions and fulfilling your financing needs.
I'm easily found at:

Gene Mundt

Mortgage Originator - NMLS #217987 - IL Lic. #031.0006220 - WI Licensed

American Portfolio Mortgage Corp.

NMLS #175656

Direct: 815.524.2280

Cell/Text: 708.921.6331

eFax: 815.524.2281

gmundt@goapmc.com

www.genemundt.com

             

      

Gene Mundt, Mortgage Originator, an Originator with 40+ years of mortgage experience, will offer you exemplary mortgage service and advice when seeking:  Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including:  The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL & WI.  

Referrals are Greatly Welcomed & Appreciated!

Coming This Summer: Drive-In Movies in Manhattan

 Coming This Summer:  

Drive-In Movies in Manhattan

When you have a venue as beautiful as the historical  Baker/Koren Round Barn Farm property as part of your community's park district, you're going to find ways to show it off ...

Such is the case in Manhattan, IL this summer ...  

As part of the summer events planned within the community, the Manhattan Park District will be showcasing its scenic Round Barn Farm property while featuring two (2) drive-in movies on the site.

The movie "Bumblebee" ... will be shown on May 31st, 2019.  "Top Gun" follows on August 9th.

The gates of the "drive-in" will open at 7 pm both nights, with the movies starting at dusk (around 8:30 pm).  There is a cost of $5 charged. 

For more info on this and the 2019 summer concerts planned by the Manhattan Park District, visit their website at:

https://www.manhattan-il.com/manhattan-park-district

Enjoy!

*  Should you hope to buy a home or investment property ... or refinance a home ... in the Village of Manhattan, the Lincoln-Way High School District, Will County, or elsewhere in the Chicago - IL - WI area ... please contact me. 

I can help you with your mortgage financing and also provide referrals to many of our area's finest real estate-related professionals.

I'm easily found at:

Gene Mundt

Mortgage Originator - NMLS #216987 - IL Lic. #031.0006220 - WI Licensed

American Portfolio Mortgage Corp.

NMLS #175656

Direct: 815.524.2280

Cell/Text: 708.921.6331

eFax: 1.815.524.2281

gmundt@goapmc.com

www.genemundt.com

            

 

      

Gene Mundt, Mortgage Originator, an Originator with 40+ years of mortgage experience, will offer you exemplary mortgage service and advice when seeking:  Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including:  The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL & WI.  

Referrals are Greatly Welcomed & Appreciated!

Be Ready With Your Mortgage Pre-Approval If You Want an Advantage When It's Time to Buy

Be Ready With Your Mortgage Pre-Approval

If You Want an Advantage When It's Time to Buy

A scenario I'm all too familiar with played out once again over this last weekend ...

A phone call came in from a prospective home buyer. They wanted to get pre-approved for a mortgage. Their realtor had advised them that they needed a Pre-Approval Letter in order to submit an offer on a home they had viewed and fallen in love with.

Time was of the essence, as they hoped to submit their offer to the home's Seller immediately. Interest in the home was high and they were sure there would be multiple offers made.

This was my first conversation with this home buyer.  They'd been referred.  But from very first contact, we were in "crisis mode".

We shot from zero to 60 mph instantly. And right out of the gate, these home buyers were experiencing stress regarding their mortgage financing.

Now I completely understand that potential buyers might start a home search and view properties casually when they first being the home buying process. It's their way of testing the real estate waters, so to speak. 

And I also understand that while casually viewing homes, a portion of those prospective buyers come upon the "perfect home" that triggers their need for more serious financing answers and actions.

But in the majority of cases, that is not and should not be the case ...  

As a result, the process of seeking and securing mortgage financing should be more measured and methodical. It should be prepared for, planned for, and executed in stages. When conducted in this proactive manner, the mortgage process is far less stressful for borrowers and they avoid much of the stress and panic that my new clients felt so keenly over the weekend.

This more measured and methodical approach is a distinct advantage to lenders too.  It allows them ample time and opportunity to ask their prospective borrowers more questions and gain more detailed information ... an advantage that should not or cannot be overlooked or minimized. 

When given time, a lender can perform a more thorough examination of financial information, credit reports, subject property (and more).  And that, in turn, means more dependable information provided by the loan officer to their clients and agents ... and fewer issues arising moving forward.

It's a fallacy that, in the current mortgage process, Pre-Approvals and Pre-Qualifications are a simple thing to provide. If performed properly and reliably, they are not. There is much info to gather and consider. Information, preparation, and execution all greatly matter ... as does your choice of Loan Officer.

Because of this, potential home buyers (and those refinancing), should allow ample time for loan officers to gain all the detailed information needed for a Pre-Approval Letter.  Time allows a loan officer ample opportunity to conduct an in-depth analyzation and opportunity to seek further info from their client if needed. The results are far better for all involved.

As an example ...

A first-time home buyer was referred to me by his father, an acquaintance of mine. This young buyer reached out to me initially via email. He then followed that exchange of information up with a phone call.

This young buyer related to me that he'd previously communicated online with 2 other lenders and had even sought Pre-Approvals from them.  I liked that he had acted proactively, but unfortunately, neither lender had reached out to him in return.  They had not provided him the information he gained during our phone conversation together.   

Some of that important information included:

• Detailed information about financing a Condo
• Substantial info regarding the Transfer Tax Fee he would incur because of his Condo city/location preference
• A breakdown of his prospective Closing Costs
• How his Interest Rate would be affected by his Credit Scores, Down Payment percentage, and Debt-to-Income Ratio
• The cost of his (required) Private Mortgage Insurance
• That a Seller could be asked to contribute/offset some or all of his Closing Costs
• That his search for a condo (and subsequent information regarding the property) could be better served by a Realtor
• A referral to a local experienced Realtor
• More ...

Most importantly during this conversation:  I was able to obtain his financial information and was then able to pull his Credit Report. This resulted in my being able to issue a Pre-Approval Letter quickly and easily on the day he wished to make an offer. We sailed right through because his proactive actions paved the way for a fluid Pre-Approval and successful, less stressful mortgage process.

Bottom line:  Don't go home shopping before you get Pre-Approved for your financing.  The stakes are too high to NOT take proactive action when you're hoping to buy and finance a home.  

The present real estate housing market does not allow for hesitation or poor preparation.  Time, money, and a home you love can be lost if you wait too long.   

Commit yourself and the time needed to a proper mortgage search ... starting with a thorough search for an experienced knowledgeable loan officer.  Start that search early. Talk to that loan officer months ahead of when you hope to buy or even start a preliminary search for a home. The more time you allow, the better.

If buying or refinancing a home or investment property in the Chicagoland - IL - WI area, I'd love to hear from you. 

* Are you hoping to buy or refinance a home or investment property in New Lenox, Will County, or elsewhere in the Chicagoland, IL/Wisconsin area?
Contact Me!   I'll put my 40+ years of mortgage experience and expertise to work answering your questions and fulfilling your financing needs.
I'm easily found at:

Gene Mundt

Mortgage Originator - NMLS #217987 - IL Lic. #031.0006220 - WI Licensed

American Portfolio Mortgage Corp.

NMLS #175656

Direct: 815.524.2280

Cell/Text: 708.921.6331

eFax: 815.524.2281

gmundt@goapmc.com

www.genemundt.com

             

      

Gene Mundt, Mortgage Originator, an Originator with 40+ years of mortgage experience, will offer you exemplary mortgage service and advice when seeking:  Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including:  The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL & WI.  

Referrals are Greatly Welcomed & Appreciated!