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November 5, 2007
Is this co-op trouble or typical?
I am (nervous) first time home-buyer trying to purchase a coop. After getting an accepted offer on a unit in Ditmas, I spoke to some people who live in the building and heard some disquieting stories. Not everyone was dissatisfied, but it became clear that the building had been in poor condition when it was rental units, and had been upgraded cheaply by the sponsor when converted to coops. The coop board apparently is under the thumb of the sponsor.
My budget isn't so big, so I'm not looking at "fancy" buildings. Is this just something I should take into account in the contract and my negotiation with the sponsor (it's a sponsor sale), or is it something I should run from?
Thanks for your input.
Comments
Check out the postings under management. At the least, pay for an independent inspection of the apartment. Consult your attorney and review the financials for the building carefully. If you can, post or ask about the management company. Shareholder dissatisfaction does not just happen. While sponsor apartments are inexpensive, it is a big investment for you... best to do your homework before you make a commitment.
Good luck!
Posted by: guest at November 5, 2007 10:44 PM
agree w/ poster above. also, as you probably know, Ditmas is a very small market with a handful of really active brokers -- who read these pages. so by all means ask your questions, but also know that the seller and/or seller broker may be reading. be sure to protect your anonymity lest the seller get wind of your hesitancy. -- a fellow buyer
Posted by: guest at November 6, 2007 12:33 AM
Plus if you heard the board is under the sponsors thumb you should also check to see what percentage of the units they own. If they plan to sell them all eventually that situation will reverse. If they plan to hold the units and rent them then whatever situation is going on now will continue.
Posted by: guest at November 6, 2007 9:06 AM
Agreed. If the sponsor owns a lot of apartments (and therefore the board) then the building's finances can be run for the betterment of the sponsor - and not the betterment of the building.
Posted by: Johnny at November 6, 2007 9:18 AM
The board's minutes, which you should read, are often interesting.
Posted by: guest at November 6, 2007 10:17 AM
In addition to what was said about sponsor-owned units, those units as also competition for any other shareholder who wants to sell. And, banks do not look as kindly on either financing coop loans in buildings with non-resident owners (sponsor or investors) or refinancing the underlying mortgage. If it looks like the sponsor will continue to control the buidling for the next year or so, I would pass. With all the new condos coming on the market there will be much more pressure on prices in the next year already.
Posted by: guest at November 6, 2007 3:53 PM
a good attorney can guide you properly.
Posted by: guest at November 6, 2007 4:46 PM
As long as the price is right, you will be OK.
with time, the sponsor's percentage will diminish and the building will get niocer and nicer. But believe me, it will take a long time. So do not buy for a short term thing.
Posted by: guest at November 6, 2007 5:29 PM
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