So we recently had our co-op board interview; very painless and quite pleasant actually. During the discussions the pres. of the board asked who the seller's broker was. Once she saw who it was she stated that she knew for a fact that this broker really wasn't familar with the building, and then she proceeded to asked if we were informed about the assessment currently looming on the not too... [more]
So we recently had our co-op board interview; very painless and quite pleasant actually. During the discussions the pres. of the board asked who the seller's broker was. Once she saw who it was she stated that she knew for a fact that this broker really wasn't familar with the building, and then she proceeded to asked if we were informed about the assessment currently looming on the not too distant horizon. Well, of course our answer was no. This was not uncovered during our due diligence as it is not in place yet, and was not mentioned in the minutes of the prior six months that we reviewed. I am currently trying to see if this information was communicated in any written form to the shareholders prior to our signing of the contract.
The big question is - do we have any leg to stand on to re-negotiate price after the fact? I guess I'm feeling that if this information was made public prior to signing of the contract we should have been informed. Now I know that there is burden of responsibility on us as buyers to do our due diligence but I am curious as to whether anyone else has experienced something like this.
thanks.
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Response by glamma
over 16 years ago
Posts: 830
Member since: Jun 2009
that sucks. would it have been a deal-breaker if you knew? did you ask if they had assessments and were told otherwise?
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Response by gutter86
over 16 years ago
Posts: 74
Member since: Mar 2008
It would not have been a deal breaker, but clearly a bargaining chip to get a better price. Assessments- past, current and anticipated is one of the first questions I ask when I see a place. Of course the answer was an unequivocal "No".
This planned assessment has not even been finalized in terms of amount or even where it will be coming from (i.e. montly spread out over 1 or 2 years; retaining the tax rebate; one time lump sum, etc...). So clearly this is not something that could have been a hard negotiation, but it would have been used by us nonetheless. I suppose a bigger issue is the taste it leaves in my mouth - which is rather sour at this point.
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Response by w67thstreet
over 16 years ago
Posts: 9003
Member since: Dec 2008
Simple really. Fake disgust, rant and rave and then have broker take it out of their 6%. Next question.
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Response by gutter86
over 16 years ago
Posts: 74
Member since: Mar 2008
No need to fake any disgust, that's for sure - it is all too real....broker certainly has a cushion in that there is no buyer's broker and the seller's broker is a one-person shop so the entire 6% would belong to the broker anyway. So you are so right W67 - show me some of that money.
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Response by w67thstreet
over 16 years ago
Posts: 9003
Member since: Dec 2008
In this market, the seller will cave or th broker will. 6% of zero is...... Sometimes borkers need a helping hand. FYI, it has always been the case a % of the brokerage fee was used to bring the two sides closer, I always take for granted that fee is fully 'working' capital for buyer and seller. Lmao. Enjoy the purchase
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Response by gutter86
over 16 years ago
Posts: 74
Member since: Mar 2008
But unfortunately they already have 10% of my money - so let's see who blinks first.
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Response by jifjif
over 16 years ago
Posts: 232
Member since: Sep 2007
How would you find this out if you are buying directly from the owner?
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Response by gutter86
over 16 years ago
Posts: 74
Member since: Mar 2008
I'm not buying directly from the owner, but even if I were the course of action would be the same. You go through the management company and review board meeting minutes and past year's financial statements. Unfortunately the minutes available at the time of performing due diligence were two months old as anything more current had not yet been prepared and approved by the board for availability. So in my case either this information was not yet public or the seller and its broker were withholding very recent information.
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Response by w67thstreet
over 16 years ago
Posts: 9003
Member since: Dec 2008
A letter from attorney seeking clarification as to who knew what when and where should get you 10% back no problem, the question is do you want to risk losing the deal cause there is no way you will lose 10% if there is even a hint of info being withheld. Now ask the seller. ' do you feel lucky, punk?'
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Response by 30yrs_RE_20_in_REO
over 16 years ago
Posts: 9877
Member since: Mar 2009
Look at the language in your contract of sale; passing on of information about any maintenance increases or assessments is clearly enunciated in almost every contract of sale (in fact, if you used a "standard" Blumberg contract, it would have to have been crossed out not to be there).
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Response by kmbroker
over 16 years ago
Posts: 116
Member since: Jan 2008
if the assessment has not been finalised & is not in the minutes chances are that no one other then the board interviewing you was aware of this assessment... do you know how long it will be for? or how much it is? if you do then you can go to the seller with an amount that you want them to reimburse you or share with you. Usually a Board does not share with owners that there is going to be an assessment & how much it is until they have voted on it. Looming on the horizon is very nebulis. you can tell the broker/and your lawyer that you have been informed by the Board of this assessment & you want compensation as you would have taken this into consideration when making your offer if you had known. However, with out a definate amount difficult to negotiate good luck
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Response by manhattanfox
over 16 years ago
Posts: 1275
Member since: Sep 2007
Before you get so angry -- you say that it was not yet in the board minutes. therefore it is not yet official. How would the seller's broker know? You could have interviewed with the board and they could bring up the assessment the day after you were approved. assessments happen.
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that sucks. would it have been a deal-breaker if you knew? did you ask if they had assessments and were told otherwise?
It would not have been a deal breaker, but clearly a bargaining chip to get a better price. Assessments- past, current and anticipated is one of the first questions I ask when I see a place. Of course the answer was an unequivocal "No".
This planned assessment has not even been finalized in terms of amount or even where it will be coming from (i.e. montly spread out over 1 or 2 years; retaining the tax rebate; one time lump sum, etc...). So clearly this is not something that could have been a hard negotiation, but it would have been used by us nonetheless. I suppose a bigger issue is the taste it leaves in my mouth - which is rather sour at this point.
Simple really. Fake disgust, rant and rave and then have broker take it out of their 6%. Next question.
No need to fake any disgust, that's for sure - it is all too real....broker certainly has a cushion in that there is no buyer's broker and the seller's broker is a one-person shop so the entire 6% would belong to the broker anyway. So you are so right W67 - show me some of that money.
In this market, the seller will cave or th broker will. 6% of zero is...... Sometimes borkers need a helping hand. FYI, it has always been the case a % of the brokerage fee was used to bring the two sides closer, I always take for granted that fee is fully 'working' capital for buyer and seller. Lmao. Enjoy the purchase
But unfortunately they already have 10% of my money - so let's see who blinks first.
How would you find this out if you are buying directly from the owner?
I'm not buying directly from the owner, but even if I were the course of action would be the same. You go through the management company and review board meeting minutes and past year's financial statements. Unfortunately the minutes available at the time of performing due diligence were two months old as anything more current had not yet been prepared and approved by the board for availability. So in my case either this information was not yet public or the seller and its broker were withholding very recent information.
A letter from attorney seeking clarification as to who knew what when and where should get you 10% back no problem, the question is do you want to risk losing the deal cause there is no way you will lose 10% if there is even a hint of info being withheld. Now ask the seller. ' do you feel lucky, punk?'
Look at the language in your contract of sale; passing on of information about any maintenance increases or assessments is clearly enunciated in almost every contract of sale (in fact, if you used a "standard" Blumberg contract, it would have to have been crossed out not to be there).
if the assessment has not been finalised & is not in the minutes chances are that no one other then the board interviewing you was aware of this assessment... do you know how long it will be for? or how much it is? if you do then you can go to the seller with an amount that you want them to reimburse you or share with you. Usually a Board does not share with owners that there is going to be an assessment & how much it is until they have voted on it. Looming on the horizon is very nebulis. you can tell the broker/and your lawyer that you have been informed by the Board of this assessment & you want compensation as you would have taken this into consideration when making your offer if you had known. However, with out a definate amount difficult to negotiate good luck
Before you get so angry -- you say that it was not yet in the board minutes. therefore it is not yet official. How would the seller's broker know? You could have interviewed with the board and they could bring up the assessment the day after you were approved. assessments happen.