Getting Screwed at Closing

I think the only way that you could get "screwed" as you say is if they don't show up, and then either demand more money or wont' return your calls. Then, all your plans are in disarray and you'll have to fight them to get your deposit back.

Posted by: guest at October 9, 2007 11:32 AM

One little thing is the warranty on all the new appliances.

If they bought them 9 mths ago and you close tomorrow. You only have a 3mth warranty.

Posted by: guest at October 9, 2007 11:43 AM

Thanks Slopefarm, that sounds consistent with what I have heard. How can protect myself against these possible inconsistencies? Is it prudent to hire an inspecter to do the final walk-through with us? Do we create a lsit and have the seller sign something saying they are obligated to fix?

Thanks!

Posted by: guest at October 9, 2007 2:05 PM

Please do privude your recommendations Philip - Though its a little late for inspection before signing the contract. Especially since it was a condo conversion and there really wasnt anything to inspect when we went into contract.

Anyhow - someone to do the final walkthroguh would be great.

Thanks!

Posted by: guest at October 9, 2007 3:05 PM

I think the real way you can get "screwed" in buying a condo conversion is that the developer often has YOU pay the transfer taxes. This adds considerably to your closing costs. But this should have been clear in the documents you were given before you got into contract. If you signed up to it, you can't get out of it now. You can only try to get some of it offset for other items (like a credit for appliances if they don't provide them, or if you want to provide your own.)

Also, they don't always finish up the building systems - make sure your inspector looks at the adequacy of the electricity, hot water, etc., provided. If it isn't finished by closing, don't rely on any promises that it will be finished after you close - get money set aside for it, if you can.

If the unfinished items are building-wide issues (common in brownstone conversions) like hot water (if you don't have your own water heater) or sufficient electricity for the buildings' needs, (or problems with the roof, facade, sidewalk, etc.) - if you can't get the developer to fix everything before you close, you may want to try to have him set aside funds for the whole condo to use to finish up, as they often leave you with no reserve fund.

People tend to focus on what's in their unit - that's easy to see - but it is the building-wide stuff that costs the most to fix/finish up. That's where your inspector comes in handy.

I walked away from one brownstone condo conversion (before getting into contract) due to some of the above issues (which I found were then common with developers), and never regretted it. Though, in hindsight, going through the hassle now of getting the building finsished (at the new owners' expense, most likely) may be easier in the long run - when you later get to rent out or sell without coop board involvement.

Just be prepared with knowledge of what work you (and the condo as a whole) will need to do, as you may not be in a position to have the developer actually agree to finish everything. Good luck.

Posted by: guest at October 9, 2007 4:05 PM

Having been screwed on both sides of the buy/sell of co op transactions, here is my advise to purchasers... especially first time ones.

1. In co ops especially - do your due diligence and talk to other residents of the building you are moving into.
2. Pay particular attention to the condition of the building externally and the condition of the internal common areas.
3. Stop by the laundry room and strike up a conversation with anyone who is there... are the machines all in working order? What do the notices on the BBoard say? Is it clean. (Indication as to the general upkeep of the place)
4. Ask to be introduced to the Super. The reaction to this request and any subsequent meeting will give you a gut feel about what you are investing in.
5. Meet your prospective Managing Agent - just pop into their office and see who will be your first contact to get anything done

Especially if you are buying from the sponsor - get an independent inspection!!! Sponsors sell to you 'as is' and encourage you to use their attorney - to save you money. It is cheaper, but you are better of paying for your own attorney to get an HONEST assessment of the reputation of building's management, the financials for the cooperative, AND an HONEST disclosure of any violations - past or present - from the City building departments. There are a LOT of surprise assessments, maintenance increase costs, etc. that come down the pike AFTER you sign at closing!

TRUST ME, you will thank me if you do this. I have been mislead by the sponsors sales agent as well as the attorney I used on one transaction. My naivete as I believed them when they forecast schedules for the improvement of infrastructure, disclosed a lack of code violations, and did not disclose pending legal actions which were filed a week after I closed.

Maybe it's just bad luck, and I did survive. But I believe in helping you avoid these headaches.

Also, look under the Management Topic in this Forum. LOTS of good advice there!

Posted by: guest at October 11, 2007 10:55 AM