Priscilla Toomey: 10 Tips for a Successful Co-op Purchase or Sale
By Priscilla R. Toomey, Licensed Associate Real Estate Broker, Julia B. Fee/Sotheby's International Realty
Dec. 21, 2016: If you are considering a co-op purchase or sale in the upcoming months, here are 10 tips to keep in mind:
1. Almost all apartment buildings in Bronxville are co-ops, so getting approved by the board is a necessity. The apartment owner owns shares in the building, not the actual real estate. This makes for a different transaction than one in which a condo or single-family home is purchased.
2. The necessary documents from the get-go are the fully executed contract, the purchase application for the co-op board, the house rules, the offering plan or prospectus, the minutes of board meetings, the building's annual financials, and a mortgage commitment (unless the transaction is all cash).
3. When you buy a co-op, set up a place to save the offering plan/prospectus, minutes, and the annual financials. Your eventual buyer will need them to be reviewed, and it can get expensive and time- consuming to get copies.
4. Be aware of other fees, such as fees for the co-op questionnaire, assessments, any flip tax, and a move-in or move-out fee.
5. Even though it's what's within the walls that the unit owner actually owns, some buyers want an inspection of the building's systems or at least information on when the most recent upgrades of the electrical, plumbing, and heating systems were made.
6. It is often a good idea to become familiar with the building's pet policy, especially as it relates to dogs. Some buildings state weight restrictions, but when asked, they are actually breed restrictions. And these days, pets that are service animals or companion animals are often asked about.
7. It helps to know the differences between the board application and the board interview. The former usually requests in-depth financial and background information, the latter is often more of a "meet-and-greet."
8. Count on at least 90 days from the date a contract is signed in order to close. And keep in mind that until both parties have signed the contract and the initial payment, usually 10%, has changed hands, both parties can change their minds without penalty.
9. The board sets the percentage of equity that buyers must include for their purchase. However, boards typically want the buyer to have money "in reserve" after what is spent for the purchase, so this needs to be analyzed and incorporated into whether a particular applicant is qualified. The board may even want the applicant to have more in reserve than their lender requests.
10. Include the management company's requirements in your communications and review the board application in great detail and depth before it's submitted, to make sure it is complete and thorough so that it doesn't get kicked back and thus delayed. And keep in mind the formality of the process--letters of recommendation should be on letterhead and in hard copy, not emails, and dress for the interview should be business clothes, not casual.
Pictured here: Priscilla Toomey, licensed associate real estate broker, JD, ABR, Top5, certified EcoBroker, SRES with Julia B. Fee/Sotheby's International Realty, 2 Park Place, Bronxville, NY 10708; cell, 914-559-8084; email,
Photo courtesy Julia B. Fee/Sotheby's International Realty
