Ed Colby: The trying world of condo buying
May 7, 2002
We always run into trouble when we buy property, but it’s never our fault. In 1986 we lucked out and found a repossessed Carbondale condo for $43,000, except the deal fell through on closing day.If you know Carbondale, you know these condos. They’re those twin four-plexes on Lincoln Avenue, just off Eighth Street. They look like big violet-colored barns. With 1,000 square feet crammed into four levels, from basement to attic, we described our unit as “like a double-wide trailer tipped on end.” It had a postage-stamp-sized yard with three poplars, a deck and a picket fence. It had Mount Sopris in the living room window. You could have pets. It was perfect. The price was definitely right. With a 7 percent mortgage, our payments would be under $300. We could swing that. The reason this place was so cheap was that everything was cheap. Oil shale went bust in 1982, and real estate collapsed from Grand Junction to Carbondale, where it hit rock bottom in late 1986. Condos were 50 cents on the dollar. We weren’t shrewd investors. We never are. We just happened to look at the right time. Our sale was a little different in that the seller and the buyer were separate branches of the same company – a now-defunct savings and loan. One of the requirements of the lender (located upstairs in the S&L building) was that the condominium association maintain “fidelity bond” (theft) insurance on its funds.This sounded reasonable to us, but when we contacted the condo association, Rosemary told us they had enough bills to pay already. They didn’t need theft insurance for their paltry account, and they weren’t going to buy it. But good luck to us nonetheless. The sellers (downstairs in the same building as the lenders) said not to worry. This deal would fly.On closing day, everybody met at the savings and loan offices, and Linda and I started signing papers. Halfway through the inch-thick stack, we came to one that said that we personally guaranteed that the condominium association acquire and maintain fidelity-bond insurance. We said, “Wait a minute. Before, you said not to worry.” Somebody said, “That was the sellers. We’re the lenders. They’re downstairs. We’re upstairs.” We said, “Impossible.” They pleaded. If the condo association continued to balk at buying the insurance, the worst that would happen is Linda and I would have to buy it ourselves – at a cost of “only a few hundred dollars a year.” We said, “If it’s so important to you, why don’t you guarantee it?” They said they couldn’t possibly. We’d have to. We said “No way.” They said “No deal.” There wasn’t any negotiating. They were pretty matter-of-fact about it. We walked out of the closing, and the realtors went home. I was stunned and speechless, but Linda girded her loins. “They can’t do this,” she said.She led me to the vice president’s office. His secretary said he was busy. Would we like to make an appointment? Linda said, “Tell him we need to talk to him right now. Or I’ll tell him.” She was not speaking quietly. She was making a scene.We were immediately ushered into the vice president’s office, where Linda vividly outlined our predicament. The vice president was a diplomat. He understood our frustration. He sympathized. He wanted to help, really, but he needed the fidelity bond insurance in order to sell our loan on the open market. He was also clearly uncomfortable.There was a long silence. Just to keep the conversation moving, I made what I thought was a pretty weak suggestion. I said, “What if we agree to vote for fidelity-bond insurance when it comes up at condo meetings? Would that be a fair compromise?” Apparently at this point the vice president just wanted us out of his office. He said, “That might work.” Linda’s eyes shone as the vice president drew up a most bizarre rider to the sale.We closed without the realtors and moved in the next morning.We lived in Carbondale for nearly six years. We were active in the condo association and found our fellow owners to be almost as cheap as we were. As for the fidelity-bond insurance, well, I can honestly say the issue never came up.Beekeeper and ski patroller Ed Colby’s column runs on Tuesdays. His e-mail address is email@example.com.
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