co-op board rejection
Started by anonymousxyz
over 15 years ago
Posts: 3
Member since: Apr 2009
Discussion about
I am a co-op owner who has been trying to sell my apartment. i was in contract with a buyer, and had an offer i thought was quite reasonable in the current market. however, my buyer was rejected by the co-op board. of course they won't specifically tell me it was because of the price, but the board president did tell me i should consider raising my price as a strategy. they do think they are protecting the other shareholders by not creating lower comps, but in the long run this strategy is obviously not going to make the other apartments worth any more. Is there anything I can do?
nope
One job of the listing agent is to make sure that the board package is perfect---and to make sure that you have picked the appropriate buyer. Next time, see if you can run the potential buyer's financials past a board member BEFORE you have a signed contract. It won't guarantee anything, but it's a good indication. If you don't have a broker representing you, consider hiring someone with experience to review the board package--sometimes an attorney will do it, and sometimes a broker will do it for a fee. It's worth it to you to make the strongest case possible in this market.
Do you really think that it was the price or could it possibly have been that your buyer did not have the cash account that he/she needed? So sorry that this happened to you.
If the reasons you cite is true, they are being really stupid. In the current climate (and the subsequent years to follow), buyers being denied systematically is much, much worse in a long run than lowering the comps. Who'd invest money into an apt they won't be able to sell when they want/need to? Just dumb.
OP asked if he can do anything about this sale, now. lets try to stay on topic
actually i am asking about what i can do now, AND in the future as I move forward with trying to sell (if the board remains in denial).
for the future, make friends with some or all of the board members and see if you can influence them in any way. if your apartment wasn't on the market, i would suggest running for the board but that's not going to work under your circumstances.
as i have said many times in many postings, try to see the situation as best you can from their perspective. i personally disagree with what they appear to be doing but can understand their motivation. they are and should be much more interested in the shareholders who are staying than those (such as yourself) who choose to leave.
very tough situation that i am afraid will be repeating itself across the city.
If the board specifically mentioned raising your price as a "strategy", then it is very clear what happened. They are concerned that selling at a reasonable price (current market value) will devalue THEIR apartments. This is circular logic of course, as prices will continue to come down over time and the BEST thing would be to allow a sale NOW at the current prices.
I hate to say it, but you dont have much recourse when it comes to an unreasonable board. I have made a number of posts here about how boards are causing more problems then they are worth. Not to go off topic, but I have personally found boards mentalities so stuck in the boom times that I simply walked away. As a member of the coop, you have every right to demand they change their tune. Talk to your fellow tenants and explain the situation. Help them understand that denying qualified applicants is STUPID, and will only hurt their resale value if/when they choose to move....
don't have much recourse=no recourse.
be careful about starting a mini war. you still have to live there. as mentioned above, try to be friends with the board. everyone is scared and people who don't want to leave are going to buy into the (false, in my mind) argument that you are a trouble maker who is lowering values for everyone.
nan:
"and to make sure that you have picked the appropriate buyer."
Nan, that's priceless, thanks for the humor.
It's not a question of picking "the right buyer", how about "any" buyer. I know of 11,016 sellers that would take "any" buyer. Currently there are about 500 buyers per month. How do you think the other 10,516 sellers are going to be feeling by the end of April? Worried they picked the wrong buyer, NO, more like worried they can't find anyone with a heartbeat and a paycheck. Reminds me when I was trying to get laid in high school, I used to tell my friends, "I'm trying to pick the "right" one. Bullshit, how bout anything that would say yes!
precisely
I see your point Patient, but if you know that the board is troublesome and you say yes to just anyone, then you get "screwed"....even in this market with tons fewer buyers, it doesn't do you any good not to vet properly. For all I know the potential buyer was qualified, and the board package was pristine. My point is that particularly now, everything counts.
egad...get real. if only one person makes an acceptable bid, what would you do? reject them in favor of ? nobody? this is precisely the kind of broker crap that drives everyone nuts. useless advice that has no bearing on the situation. how do you choose amongst a pool of one? eeny, meeny, miny ?
and how much do you expect to get paid for this kind of advice?
Actually Columbia, my useless broker crap and your advice are remarkedly similar. I suggested that the op take the potential buyer's financials and present them to a board member. You said "make friends with some or all of the board members and see if you can influence them". Maybe you're more broker-y than you know.
We've never had a board turn down in 15 years of selling real estate in manhattan. Thought I could offer advice,but I don't want to get in a pissing match.
Easy does it there cc . . . i'll go out on a limb here and say that nshipley is one of the good ones - she really is. she's not here pimping an agenda, and she's answered questions on this thread and others truthfully and with useful insight of an honest broker - always right? no, no one is. but she's pretty good at her job, and doesn't try to bullshit here like some other brokers who you have admirably helped run off the board,
op said that the board president suggested that he raise his asking price. how does presenting the potential buyer's financials help? i am not a broker and am disgusted by all of you. repeat: how much do you expect to be paid for this type of brilliant advice?
in your 15 years of selling real estate, have you ever seen a market like this one? of course not...so once again, you are blowing broker smoke.
none of you has any concept of working for a living. the good news is that you are no longer going to be making a living.
I think Boards that reject based on price are risking putting the entire coop on a nasty trajectory towards irrelevancy. Lets say a coop has normal turnover of 2 units per year. Now due to economic concerns they have 3 on the market. 1st unit to find a buyer gets rejected based on price, this seller now, potentially, has his unit on the market for twice as long as usual. Time waits for no man, woman, (or heshe), now a 4th unit comes because of the delayed closing on the first. Now the buy side is thinking what the hell is going on with this building, they have never had 4 units for sale at the same time. Buy side waits and watches the 4 units chop themselves to death. Can you say 22 E 88th. Dangerous path to take, can you say "unintended consequences". "God help me, I do love it so"
completely agree
Moral of the story is never buy in a coop, stick with condos to avoid all this crap.
still have to deal with brokers, though. ugh.
Brokers helped create this mess (RE, mortgage, etc)
They are all miserable...
And coop board in NYC...oy...so many seem so delusional
Advice, although crappy, is you're screwed...most people are morons and won't listen to reason. Get ready to stay the long haul, sorry chief.
I would certainly give it a go and make nice once, but knowing how most jerks in nyc coop boards are (last place i lived i wanted to cut my own throat most of the people were so stupid) you going to have to either a) run for prez like cc says (and in my jaded ridiculous opinon, make life miserable for the people on the board) or b) leave steaming bags of burning dogshit on the board members doorsteps.
Sorry...wish it wasn't so.
P.S. Brokers suck
Convince the non-morons in the building to vote in a new board. (Ha! I crack myself up.)
sucker punch the board members and feel good for the minutes before they sue you?
I'm sorry to hear about your situation anonymousxyz. The process of selling a place is already painful enough that you shouldn't have to contend with the additional stress of losing a buyer.
It helps to speak to the managing agent. Someone within the firm usually has the best insight on the criteria for any buyer specific to your building. Also, any broker (this is where they can be helpful) who has had success in your building can walk you through the board members and their preferences.
Regarding the argument for boycotting coops because of some coop board conspiracy to block potential buyers is, in my humble opinion, somewhat hilarious and a bit too simplistic.
I've never seen a rejection take place because of a low price in my 35+ years of living within a coop, but have seen much conjecture on the topic. There is, however, a reality in the idea that any buyer has to be financially scrutinized by complete strangers and be prepared to present a well-documented, highly-liquid profile post-sale. The idea of what is a good candidate is very subjective and is based on a coop's rules.
If being judged by others isn't your thing (who does like this?) then you're probably equally uncomfortable with any social or professional situation.
You can make lots of noise and become the most hated person in the building. Then the board would want to get rid of you ASAP. That's what I would do. I would blast my surround spund speakers. Get a dog that barks 24/7. Start screaming and cursing in the lobby.
coopownr98, you said it.
pray to jesus
Columbia, are you off your meds again? Calm down & THINK instead of spewing your nonsensical antibroker crap. You often seem OK & then you go nuts. Hmmm..........
anonymousxyz, you may want to try to raise your price ON PAPER ONLY. Talk to your lawyer.
youcannot, interesting idea. Maybe offer to pay monthlies. for a set period of time or pay for a partial renovation. Since your board is being idiotic, you may be able to throw in some concessions that make up the difference and get a deal done. Situation still sucks though.
youcannot and wishhouse are right on track here -- stay with your rejected buyer, and try to find out from board members how far apart your buyer was from what they envisioned in terms of price --
if it was close, it's possible that you can through again with the same buyer at a higher price with you eating closing/maintenance costs for awhile.
You have to be careful about these kinds of arrangements and work closely with the mortgage lender -- they don't want you to artificially jack up prices, which is mortgage fraud -- but there may be ways for you to work this one on the margins so that the board sees its target clearance price (which it clearly has in mind) and for the buyer to pay the same net effective price.
Nan I am extremely impressed that you have never had a turndown but this market is probably more like 20 years ago than anything we've seen in the last 15. I've had board members flat out tell me "we would never let a deal go through at $X" so I know that floor prices are something that some buildings at least are thinking about.
good luck anonxyz.
ali r.
{downtown broker]
Columbia, I read Nan's post a little differently than you - part of the listing brokers job is to make sure to offer is solid - and that includes being aware of what kind of tacit pricing floor the board has set. In this circumstance the listing broker either didn't do their job in finding out what that floor was or the package was deficient in some other area.
XYZ, can you give us some more specifics w/o revealing too much? i.e. how far off was the price offered as opposed to the most recent sales in the building, did the buyer put down 20-50%, were they willing to put maint into escrow, any other mitigating circumstances?
Sorry, the whole situation stinks.
easy to say in retrospect but...if you need to sell your place and have only one acceptable offer from a qualified buyer, wouldn't you take the chance of presenting that person to the board in the hopes that they would understand the situation? i cannot imagine the board clearly stating a floor price either before or after this process--vague and oblique is their best approach.
this is my point to this lovely broker....neither her prior experience or suggestion of choosing amongst potential buyers is at all relevant to this situation. if she or another broker had a special relationship with someone on the board and could gently explain the positive benefit of lowering the acceptable floor, that would be a completely different situation.
...
So which of your neighbors would like to purchase your apartment? Which of the board members is also trying to unload a place? The board has made the decision to keep the financial status quo. The easiest thing for them to do is reject your buyer and keep you there paying since they know you can and likely will. But.....what if you became less attractive? Job in jeopardy, divorce, anything that would put your monthly fees in question. When the board is unreasonable there are many approaches, including becoming a board member so you can see the process from the inside.
These boards need to get a clue. It's time for them to face the fact that prices are indeed no longer at peak, regardless of whether they decide to hold their breath, squeeze shut their eyes and say 'na-na-na-na--I can't hear you--na-na-na-na!' whenever someone comes in with an offer that misses their lofty expectations.
Stubborn boards do the co-op a great disservice by rejecting solid buyers outright and then allowing apartments to linger on the market at inflated prices while fellow shareholders trying to sell become increasingly disgruntled. This time next year they'll be kicking themselves that they ever rejected a sale at today's prices.
Wake up, blasted fools! It's no longer 2007.
just to be clear here, the rejection was not solely because of the price. i am just concerned, after our conversation, that the board and i are not of the same mind about the current market value of the apartment, and where the market is going. i see it as more of a potential problem moving forward. the offer i had was very much in line with the rent vs. buy equation.
Well, there may be merit in spending the two bucks and having your own appraisal done to present to the board. It's a pain in the ass, and the value will of course fluctuate in the coming months, but if they need a bucket of cold water dumped on their heads this may at least help.
I used to live in a coop with an overly activist board (and some corrupt activities occuring with doormen due to the expanse of rules...). Getting approval for anything was tough (I myself bought at a very reduced price because the board had rejected the previous buyer). I found out that a broker in the building did the majority of the sales. She was very close to the board members. I had to leave NY, but I left with peace of mind: she would get it done. And she did.
Maybe you should find a broker in the building.
"just to be clear here, the rejection was not solely because of the price. i am just concerned, after our conversation, that the board and i are not of the same mind about the current market value of the apartment, and where the market is going. i see it as more of a potential problem moving forward. the offer i had was very much in line with the rent vs. buy equation."
lol, this is very funny. it's not only about current prices but also about future prices? i'm not aware of coop boards using hte rent vs. buy equation, they should do! i'd say: reject the board!
anon - any way the buyer tanked it?
In the last downturn Boards rejected low offers for the same reason. Frequently "creative" buyers & sellers created a contract with a price say $20k or $30k higher for renovations with the provision that that amount would be refunded to buyer if renovations were not completed , that way the board could approve the contract without really lowering the values of other apts. Of course competent brokers, real estate attorneys etc. need to draw up this type of contract as there can be tax consequences on both sides. But be sure buyer is qualified