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Trying to sell an NYC co-op comes with a few unique pitfalls and unexpected moments of drama. The particular 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 are the bane of many a buyer and seller. With their power to reject buyers without explanation 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 are a few tips on how you can improve your odds of getting a buyer past your board.
Get Your Co-op in Pristine ConditionGet Your Co-op in Pristine Condition
Before listing your co-op for sale, you’ll want to ensure your co-op is in top condition for entering the market. Doing so will raise the market value, which will please your co-op board. If you 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, 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 with their own subjective opinions and biases. If you want to get a buyer past them, it will help immensely if you already know them. This means going the extra mile in getting to know your board members. It’s not enough to politely nod to them in the hallway and remain a responsible but quiet shareholder; you have to take things further.
If one is hosting a small party or get-together, try to show up. You could try inviting some of them over occasionally for a few drinks. Send them birthday cards, and learn their children’s names. Small actions like this can help 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. In short, aspire to be proactive neighbors.
Choose an Agent that’s Familiar with Your BuildingChoose an Agent that’s Familiar with Your Building
Every board has its little quirks and preferences. When choosing a listing agent to represent you, pick one with 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 create a good board package. It saves time for everyone and ensures a smoother sale.
By contrast, hiring an agent with a poor reputation for previous muddling board packages can diametrically work against you. Ask your board for recommendations if you’re unsure about choosing the right listing agent. 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 has to have water-tight financials and references. Following the previous step and hiring an agent familiar with your building 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.
Try to get a list of potential questions the board may ask during the interview process. Ask them if you’re unsure what your board is looking for in a buyer. This would also be an excellent time to ask if there are any upcoming assessments or rule changes you should be aware of. Once you’ve selected a buyer, ensure 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 buyers 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 from buyers with flawless board packages, 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.
An excellent listing agent can come in handy in a situation like this. 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 or reducing the property’s value by keeping it on the market for too long.