Coop Board Unhappy with Purchase/Sale Price?
I am trying to buy a Coop in Brooklyn and my broker has gotten feedback that the Board is unhappy at the low sale price/lack of appreciation of the unit. Supposedly, they even tried to urge the seller to stop the sale and to rent out the unit until the market recovers. Obviously, they cannot…
I am trying to buy a Coop in Brooklyn and my broker has gotten feedback that the Board is unhappy at the low sale price/lack of appreciation of the unit. Supposedly, they even tried to urge the seller to stop the sale and to rent out the unit until the market recovers. Obviously, they cannot force the seller to sub-let instead of to sell, and if they don’t approve me, I should be able to recover my deposit (and will only be out mortgage application, legal fees). There were some earlier issues that might actually have put the onus on me if the deal failed, but this news seems to have redeemed me.
Has anyone else faced this? Are there any worries I should have? Will I need any proof to ensure my deposit refund? Do I even want to buy into a building with a board like this or is this the norm for any Coop looking out for its best interests?
It reminds me of corporate news when the shareholders veto a hostile takeover bid due to a low offer price.
I have been on the coop board of my building for several years now. I will never buy a coop apartment again.
Its unfortunate but it all boils down to those who paid a higher, in many cases, MUCH higher price cannot bear to see this lessening of value possibly affect them.
Its human nature and like many have said here this IS a business.
When its completely selfish – even when the other owners are still sitting pretty – thats hard to take. I was on the board for 8 years of the small village apartment building I lived in and many times it was just too much to witness the truly grotesque side of my fellow shareholders. As much as I loved owning my own home/shares the whole co-op situation can be extremely tough.
Our first co-op purchase in Manhattan, we got word through the managing agent before our board interview that the board was unhappy with the proposed purchase price. It was an estate sale, the place had been vacant for a year, and our accepted offer was about 10% less than recent sales for comparable units in the building. We hung tough and made the case at the interview that this was a distress sale and any future buyers would see that this price was an anomaly, not evidence of a downward trend. The sale went through at the agreed-upon ‘low’ price.
It was a large, stable, well-managed co-op and a good investment for us, so we were willing to fight for the sale. If we had any doubts about the building or the unit, we would have passed.
I had a coop board change by laws on me. Usually it’s the people who have NO intention of ever leaving who run these boards. I will never buy into a coop again. I say, hope you get rejected and pay the condo premium if you can. Remember, one day you are going to want to sell your apartment, and are also going to have to deal with this.
If the board rejects you, you get your deposit back and move on.
If they approve you, that shows they’re willing to work with sellers and be flexible/reasonable even if they have some misgivings about the purchase price (and would presumably do the same for you in the future).
I’m not seeing the downside here…
“the Board is unhappy at the low sale price/lack of appreciation of the unit”
Oh, you gotta love this shit!
bklynbuyer2,
This is symptomatic of the calm before the catestrophic market meltdown. TRUST ME ON THIS! Why the hell are you looking to buy anyway? Rent! It’s cheaper after depreciation. We still have at least another -37.5% off peak to go based on income and rent fundamentals (10x annual and 3x median, respectively). Divide that loss by the hypothetical/average 60 months between purchase and resale. You’ll get a figure much higher than nearby rentals. If not, sacfrifice and rent somewhere else.
Let mortgage rates go up and compound the price collapse. You outsave the hikes and put more money down on a cheaper apartment.
“There were some earlier issues that might actually have put the onus on me if the deal failed”
Please tell me you’re not a marginal buyer. That’s the typical profile of late per First/Bond, last week’s NYT RE article and others (first time buyers limping to the closing table with borrowed funds from friends/family). If so, swallow, gargle and rinse what I’ve written above.
“It reminds me of corporate news when the shareholders veto a hostile takeover bid due to a low offer price.”
Yeah, I think that’s what happened at GM a few times.
Good luck! Hope you get your deposit back.
***Bid half off peak comps***
bb2, I hope you’re going to play LOTTO. A combination of address, asking and offer price should be able to get you into a single family brownstone in no time.
Does a decrease in unit values (as represented by lower comps) affect the building’s ability to secure mortgages, or are those mortgages driven by the underlying land and built space w/o regard to the actual apartment values?
Didn’t Biff have a good word for busy-body meddlers?