Trying to sell an NYC co-op tends to come with a few unique pitfalls and unexpected moments of drama. The unique ownership structure of cooperatives, whereby each resident is a shareholder rather than an owner, presents a challenge to any seller. Ask anyone who’s tried it, and they can tell you how difficult it can be. The reason? Co-op boards, the bane of many a buyer and seller. With their power to reject buyers without reason and their usually opaque standards for selecting candidates, they present a unique challenge that has to be considered before you even think of listing.
To help you prepare and avoid the worst of the drama, here’s a few tips on how you can improve your odds of getting a buyer past your board.
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Get Your Co-op in Pristine ConditionGet Your Co-op in Pristine Condition
Before listing, you’ll want to ensure your co-op is in top condition for entering the market. Doing so will raise the market value, which is sure to please your co-op board. If you’re going to do any renovations, focus on the kitchen and bathroom. It needn’t be a gut job; get them reasonably up-to-date and squeaky clean. If you don’t have the funds for a makeover, then a fresh coat of paint is better than nothing.
Rent some storage to keep your things tucked away while listing. Doing so will make the home look more spacious and ensure against any buyers finding your stuff when they look around. As a final touch, you should have a cleaning company come around to perform a deep clean.
Develop a Good Relationship with Your Co-op BoardDevelop a Good Relationship with Your Co-op Board
Board members are just people, and they each have their own subjective opinions and biases. If you want to get a buyer past them, it will help immensely if you’re already known to them. This means going the extra mile in getting to know the members of your board. It’s not enough to just politely nod to them in the hallway and remain a responsible but quiet shareholder; you have to take things further.
For a start, you could try inviting some of them over for a few drinks on occasion. If one of them is hosting a small party or get-together, then make an effort to show up. Send them birthday cards, learn their children’s names, in short, aspire to be a proactive neighbor. Small efforts like this can help a great deal when you need them to sign off on a buyer. Just make sure they come from a genuine place of wanting to be a good neighbor.
Choose an Agent that’s Familiar with Your BuildingChoose an Agent that’s Familiar with Your Building
Every board has its own little quirks and preferences. When choosing a listing agent to represent you, pick one that has experience working with your board. It’ll make a big difference when it comes time to submit a buyer’s application. Agents familiar with the building’s standards will know how to vet a good candidate and help them put together a good board package. It saves time for everyone and ensures a smoother sale.
By contrast, hiring an agent with a poor reputation for muddling previous packages can diametrically work against you. If you’re unsure about choosing the right listing agent, ask your board for recommendations. They’ll be glad you asked before hiring anyone.
Vet Your BuyersVet Your Buyers
The transaction process for buying a co-op is not like other properties. The buyer really has to have water-tight financials and references. If you’ve followed the previous step and hired an agent who’s familiar with your building, then they can help you vet each potential buyer. When deciding between multiple offers, it’s always better to choose the most likely to pass board approval.
If you’re unsure what your board is looking for in a buyer, then ask them. This would also be a good time to ask if there are any upcoming assessments or rule changes you should be aware of. Try to get a list of potential questions the board may ask during the interview process. Once you’ve selected a buyer, make sure they know these questions and are prepared for them.
Try and Determine what their ‘Preferred’ Sales Price isTry and Determine what their ‘Preferred’ Sales Price is
A persistent problem with NYC co-ops is that boards, concerned about falling prices, may reject a buyer if they feel the price is too low. Merely determining if this is the issue can be tricky since boards don’t have to state the reasons for rejection. But if you’ve had several rejections in a row from buyers that had flawless board packages, then you have good reason to suspect this may be the case. It’s important to understand that while boards can reject sales on a one-off basis for being too low, they cannot set a minimum share price below which they will not sell.
In a situation like this, a good listing agent can really come in handy. As a first step, you should already have a comparable market analysis (CMA) to be confident about your asking price. Your agent can also try making a few inquiries to learn the board’s preferred price range. Of course, that doesn’t cover the possibility that the board may be unreasonable in the sales price they’re looking for. A little probing from your agent might be enough to overcome this. Boards who reject too many buyers risk bringing a lawsuit upon themselves or reducing the property’s value further by keeping it on the market for too long.