Co-Purchaser vs. Guarantor
I am trying to sell my co-op apt right now and have lined up a buyer. The buyer does not make enough income on his own qualify for the apartment, but his father, a rich dude, is willing be a co-purchaser. However, I have just been told by my coop board that they frown upon…
I am trying to sell my co-op apt right now and have lined up a buyer. The buyer does not make enough income on his own qualify for the apartment, but his father, a rich dude, is willing be a co-purchaser. However, I have just been told by my coop board that they frown upon co-purchaser and will be more inclined if it is a guarantor situation. I am thoroughly confused now, maybe someone can provide some much needed clarification?
Why is guarantor more desirable than a co-purchaser? From a finance perspective, I would thought the co-op would prefer to have the rich dude’s name on the property.
Since the buyer does not make enough money on his own to qualify for a loan, I am not sure that a guarantee from the father would do any good from a lender’s perspective.
Can someone educate me? Thanks.
crimsonson=trustfundy with coop
Rob – STFU
Your stupidity is astounding.
Rob – STFU
Your stupidity is astounding.
I’d say dad will just have to live with the gift tax — should be OK if his son really wants the apartment and he really wants him to have it. But I also hope you’re continuing to do everything possible to find another buyer. And seriously, if it seems that he won’t be approved, do not go to contract with them. The worst would be to have a board turndown after all that.
quote:
very few people these days that can buy a coop in prime Brownstone Brooklyn without familial help
sad AND lame
*rob*
Lot of mis-information flying around here… if there’s a co-purchaser, the apt is definitely owner-occupied, since the son is both an occupier and immediate family of the other purchaser.
My experience of almost ten years on a PS coop board indicates that there are very few people these days that can buy a coop in prime Brownstone Brooklyn without familial help. Yes rob, I think that sucks, but that’s how it is and board members are not supposed to let there personal biases (trust funders suck) interfere with the process.
The coop probably doesn’t want to deal with the fact if the resident is late on his obligations (which he well might be) that they will have to chase the father.
In fact in my coop that exact thing happened. I think the board is being reasonable, and in fact bending over backwards to let you know this before they start the application process.
Tell the buyer to buy a condo. The scenario would work better there.
Babs,
The buyer is just starting out on a new job with good bonus potentials. However, since the bonus is not guaranteed in anyway, we can’t count that toward his income, and the base salary is quite low. It’s not a traditional bonus-based career like finance either, so the board may not understand as easily.
Coop requires 20% down. However, if Dad is a guarantor rather than a co-purchaser not co-purchaser, we run into the “gift tax” problem with the downpayment (which will be paid by dad).
To top it off, I have a hard-wired drop-dead time by which I must sell the apartment (long story). If I have not closed the apartment before the drop-dead time (in about 4 months), I will not be able sell it for another three or four years at least. That’s why I am super anxious about the board rejection.
Actually Brooke devoted most of her life to giving away as much money as possible, in part (as she’s said) because of guilt over how some of the money was earned, so she knew very well where it came from. But that doesn’t make her a bad person; quite the opposite.
That doesn’t seem like a bad purchase price. Why is the son’s income so low? Is he just starting out in a career and will make more in future years? Or is he in a lower-paying, but “socially redeeming” career — schoolteacher, social worker, etc.? Those situations might be more palatable to the board than the “spoiled rich kid” scenario.
How much is he putting down? If the father is that well off, and the down payment is big enough, and if the co-op itself is in good enough financial condition, a good mortgage broker should be able to find a willing lender, even with a guarantor. it may not be the greatest rate in the world, but even the “high” rates now are at historic lows, and he can always refinance later.