I've recently seen a Coop that would make a great primary residence our family. I am a first time buyer. This is a 50% down payment building. There are common charges, energy charges, and parking charges(in building parking). I do not have an agent, the apartment was found on streeteasy. OK team...what do I need to know?
Agreed with broadwayron. Figure out if they have sufficient cash reserves to ride out the downturn. If you don't know how to parse a set of financial statements get someone who does.
If the co-op won't allow you or your lawyer to review its books, walk. Presumably at least some co-ops still think they have leverage over buyers; savvy buyers will know that those co-ops that are willing to address buyers' concerns have the least to hide.
- what liquid assets do they expect after closing. Since its a 50% down building, dont be surprised if they expect 100% of apartment value in liquid assets after close
- pending and past assesments
- is there an underlying mortgage on the building.
- are all units owner occupied?
It's not necessary for all units to be owner-occupied (though in a small building it is vastly preferable) but there should be a healthy ratio (at least 70%)
Any underlying mortgage is tax-deductible.
Some misc. items that are worth asking:
*Has the building completed its Local Law 11 requirements?
*How's the electric? (Many prewar estate-condition units need costly refits that include bringing up wiring from the basement).
*Are washer/dryers allowed? If so, can you vent through the wall? Are through-wall AC units allowed?
*What's the policy on renos? How strict is the board in approving gut renos (say, moving the kitchen from one location to another)?
*Who pays the flip tax (buyer? seller?), and what's the percentage?
*How old's the boiler? What condition are the elevators in?
*Don't forget to look carefully at the basement. You can tell a lot about a building by its basement.
It's hard to know whether you need a real estate agent or not...some other agents will claim they only work with other agents. How much experience do you have with all the paperwork involved in submitting an application to the co-op board? Do you know good real estate lawyers? Etc.
For some people these questions would suggest using an agent; for others, not so much.
Get a really good real-estate attorney; Also, if you bring in a buyers agent representing you, the overall brokers fee, paid by the seller, is split (usually). It doesn't cost you anything - unless of course you think you can negotiate the price down by 2-3% because you're not using a broker....this can be a touchy conversation with the sellers broker.
Who is qualified to review co-op financials? Does one need an acctant? Will a good RE attorney be able to offer an opinion? Certainly this is out of the realm of the broker, is it not?
I would not use a broker to review financials, even if the board allowed that. Brokers are salespeople, not finance people. A real estate lawyer should be sufficiently trained in basic accounting to figure out if the co-ops books balance (i.e., Assets = Liabilities + Equity), whether there is sufficient assets and equity in the corporation to fund its liabilities, and insure that its cash flows are steady.
I just think it is funny that there are many comments from people saying that we are a useless resource, yet every other day I see buyers here asking "what should I do"
I've recently seen a Coop that would make a great primary residence our family. I am a first time buyer. This is a 50% down payment building. There are common charges, energy charges, and parking charges(in building parking). I do not have an agent, the apartment was found on streeteasy. OK team...what do I need to know?
Look at their books... cashflow.
Agreed with broadwayron. Figure out if they have sufficient cash reserves to ride out the downturn. If you don't know how to parse a set of financial statements get someone who does.
If the co-op won't allow you or your lawyer to review its books, walk. Presumably at least some co-ops still think they have leverage over buyers; savvy buyers will know that those co-ops that are willing to address buyers' concerns have the least to hide.
you need to find out:
- what liquid assets do they expect after closing. Since its a 50% down building, dont be surprised if they expect 100% of apartment value in liquid assets after close
- pending and past assesments
- is there an underlying mortgage on the building.
- are all units owner occupied?
and make sure the building is NOT leasing the land.
street easy should get paid for representing buyers :)
It's not necessary for all units to be owner-occupied (though in a small building it is vastly preferable) but there should be a healthy ratio (at least 70%)
Any underlying mortgage is tax-deductible.
Some misc. items that are worth asking:
*Has the building completed its Local Law 11 requirements?
*How's the electric? (Many prewar estate-condition units need costly refits that include bringing up wiring from the basement).
*Are washer/dryers allowed? If so, can you vent through the wall? Are through-wall AC units allowed?
*What's the policy on renos? How strict is the board in approving gut renos (say, moving the kitchen from one location to another)?
*Who pays the flip tax (buyer? seller?), and what's the percentage?
*How old's the boiler? What condition are the elevators in?
*Don't forget to look carefully at the basement. You can tell a lot about a building by its basement.
*What is the building's sublet policy?
I knew this was the best place for advice!!!
Do I need a realestate agent? There is one representing the seller already.
It's hard to know whether you need a real estate agent or not...some other agents will claim they only work with other agents. How much experience do you have with all the paperwork involved in submitting an application to the co-op board? Do you know good real estate lawyers? Etc.
For some people these questions would suggest using an agent; for others, not so much.
Get a really good real-estate attorney; Also, if you bring in a buyers agent representing you, the overall brokers fee, paid by the seller, is split (usually). It doesn't cost you anything - unless of course you think you can negotiate the price down by 2-3% because you're not using a broker....this can be a touchy conversation with the sellers broker.
Who is qualified to review co-op financials? Does one need an acctant? Will a good RE attorney be able to offer an opinion? Certainly this is out of the realm of the broker, is it not?
What are some of the relevant ratios to examine?
I would not use a broker to review financials, even if the board allowed that. Brokers are salespeople, not finance people. A real estate lawyer should be sufficiently trained in basic accounting to figure out if the co-ops books balance (i.e., Assets = Liabilities + Equity), whether there is sufficient assets and equity in the corporation to fund its liabilities, and insure that its cash flows are steady.
One doesn't need to be a CPA to do this.
Find a great attorney
I just think it is funny that there are many comments from people saying that we are a useless resource, yet every other day I see buyers here asking "what should I do"
Useless Resorce?
Great Advice and Comic Relief!
lol
The apartment is http://www.streeteasy.com/nyc/sale/361975-coop-180-east-end-avenue-yorkville-new-york
It needs a gut renovations. any advice?