Why these sales fall apart
Most buyers get pre-approved for a conventional or FHA loan without anyone asking about the building. The pre-approval covers the buyer, not the project. The project review happens after the contract, when the lender orders the association questionnaire — and a decline at that point costs everyone weeks and often the deal. The fix is to move the project question to the front.
What to do before you list
- Find out the reason. Hotel operation, litigation, repairs and assessments, insurance, commercial space, ownership concentration — the answer decides which lenders will look at it.
- Collect the documents a portfolio underwriter will ask for: the questionnaire, budget, reserve study, recent minutes, insurance declarations, and any litigation or assessment disclosure.
- Line up a lender who has reviewed the building and will say so to buyers.
- Price with the financing in mind. Comparable sales in the building already reflect its status; sales from warrantable buildings nearby may not be fair comparisons.
What to put in the listing
A short, factual line in the agent remarks — that the building requires portfolio or non-QM financing, and that a lender familiar with it is available — filters out buyers who cannot close and signals to the rest that the path exists. It is also a disclosure question in many markets, and the agent should handle it accordingly.
Handling an assessment in the contract
An open special assessment is negotiable like anything else. Sellers commonly pay installments already due, credit the buyer for some or all of what remains, or price the unit to reflect it. Clarity in the contract about who pays what, and when, keeps the lender's review of the buyer's monthly cost from becoming a surprise. The assessment page covers how lenders count it.
For listing agents
Korbin is a licensed real estate agent as well as a loan originator and works with listing agents on exactly this: reviewing a building before it goes on the market, telling you which lenders will finance it and what they will ask for, and talking to your buyers before they are under contract. It costs the seller nothing, and it keeps deals from dying in week three.
Common questions
Can I sell my condo if it is non-warrantable?
Yes. Your buyers need cash or a lender that finances the building. Lining that lender up before you list is the most effective step.
Why did my buyer's loan get denied because of the building?
The lender's project review found an agency ineligible characteristic. The buyer's credit was not the issue; the lender's program was.
Does being non-warrantable lower my condo's value?
It narrows the buyer pool, which the building's recent sales usually already reflect.
Should the listing say the building is non-warrantable?
A factual note about the financing required helps qualified buyers and saves failed escrows. Your agent will advise on disclosure obligations in your market.