Seller Financing

most of the time there's seller financing when you cannot get a mortgage on the coop buildings financials.

i would try to go the conventional way and make sure that there is a mortgage contingency that excludes the seller. otherwise, you can be stuck purchasing a dud with no way out.

The board will view seller financing very negatively, because in their eyes you have not undergone due diligence from a traditional bank lender (pre-approval means nada). You can still pass, but you will need a very comprehensive package. Dot your "i"s and cross your "t"s.

ali r.
DG Neary Realty

I second ab's comment. If your lender is competent, there are things they can uncover. In my case, a lawsuit against the condo I was weeks from closing on.

Seller financing might be OK if pre-approved by the Board. If seller is on the Board or got a written statement from the Board approving the financing that might be fine. It also is a matter of the type of Co-Op you are buying into. for example, small CO-OPs usually have all owners on the Board. the advices here might be relevant but without additional information they might also be pre-mature.

ab_11218: Good point, but not the case here. The building is in good financial shape and conventional financing is available. This is a case where the seller just wants to open up to a larger buyer pool.

front_porch: I completely disagree with your point-of-view. I've done some research on my own, and that is not at all what I'm finding. Any co-op that relies primarily on a bank's underwriting to make a decision on my financial worthiness is not a co-op that I want to have anything to do with. It's lazy and reckless. If co-ops had relied solely on bank's underwriters to determine an applicant's financial strength during the bubble they'd be in big trouble right now. The reason that good co-ops are good is because they actually evaluate the candidates on their own. Furthermore, do you really think that the bank's underwriters are going to be as concerned about my financial stability as the seller will be? No. This amount of money will be a lot more important to the seller than it would be to a bank. A co-op board would think about that as well.

angray: Yes, the key word being "competent". Anyone here think that the people running the underwriting departments during the bubble were competent? Anyone relying on them to make a financial decision is just dumb. And just because lending requirements are tighter today doesn't mean that co-op boards should care much more about a bank's "underwriting".

angray: Sorry, forgot to address the angle you took. Yes, I agree, if the lender is competent, then it could be beneficial to me.

realtime: Good points. Thanks for your input.