Please Help me understand!

why are you listening to another couple incompetition for the same apt? AR eyou sure the other couple exists and that the broker is not using that to push you into a deal? You should take all the time you need to look at building financials and you should clearly understand how many of the units are sold (not held by the sponsor or its affiliates)
Get this in writing.
NO RUSH!

Find out if you can get a mortgage? The broker will prefer a no finance contigency so you are on the hook for a 10% deposit. DO NOT get suckered into this.

Tell them you have lost interest as there appears to be too much hair on the deal -- Let them sweat.

They suck for doing this to you if my suspicions are correct -- Tell them to pound sand. you can likely buy it for 35% less in 2 years.

Good luck.

18% sponsor held is not all that unusual. if no bank will finance Coops based on taht alone, I think a lot of buildings are in trouble.

No need to stay away, but due diligence is always in fashion, and good for you for flushing the financials. Echo no rush.

Sounds like the broker is the one who told you about the other couple's experience. I'm with manhattanfox, I wouldn't trust that report, either--heck the broker could be telling the truth, but is the other couple telling the broker the truth? Most people don't like to tell anyone, "They turned us down because we can't afford it." The 18% thing could have been mentioned in passing.

Let us know the outcome, would ya? If indeed banks are applying that sponsor threshold that would be interesting to hear.

Our co-op is 30% sponsor held and no issues for us or any others buyers over the past few years. It depends on whether the sponsor is cash flow positive or not. If the sponsor has only rent regulated units, chances are, they are under water (paying more for monthly maintenance than they are receiving in rent). If they have all market units or a mix, then they are likely cash-flow positive in which case banks should be OK. The managing agent should supply a cash-flow statement to the mortgage bank as part of your mortgage application package. Your lawyer should also be able to uncover any problems during due dilligence.

Fannie just changed its rules for financing co-ops and condos, and banks are following those rules even for nonconforming mortgages. Basically noneviction plans under NYS law are dead.

Steve - I am not sure I understand what you are saying. Can you flesh that out for me?

SteveJ - can you elaborate?