My condominium is for sale in East Boston. I had a buyer interested and she began the process of financing. Yesterday that came to a halt because her mortgage broker told her he ran into a new rule that any condo less than 500 square feet must have a comparable sale in the area of the exact square footage at the exact same price, or no bank will provide mortgage financing.
Let me explain why this is a bad rule:
My condominium is 450 square feet. I have owned it for 7 years and have spent thousands on upgrades. My building has a well-run HOA and the unit comes with a deeded parking space.
Various “condominiums” in my neighborhood have recently been sold for $60k. Yes, $60k. Some are upwards of 900 sq ft. These “condominiums” are in dilapidated buildings, with no HOA, no parking and are, I personally feel, uninhabitable.
I strenuously disagree that my condo’s value should be directly tied to such an arbitrary thing as merely “square footage”. It would be obvious to anyone that my condo is worth a great deal more than $60k, as evidenced by my listing price of $134,000.
This new rule effectively tells me that the government will not let me sell my condo. This infringes upon my freedom to do what I wish with my property. It also forces my buyer to seek out something larger and more expensive which she may not be able to afford. Isn’t this exactly the situation that started the problems with foreclosures in the first place?
I was going to buy another condo since after 7 years I can now afford a better place. Since I cannot sell my condo I will have to take it off the market. This affects my real estate agent who will not be able to make a commission. This definitely will negatively affect the Boston condo market as many units within the city limits are less than 500 square feet.
I implore you to talk about this and get this issue in the press. I will be writing to my congressman to look into getting this rule rescinded. Thank you for your time.
Love to hear what Boston Real Estate Blog readers think