sponsor sales

WTF? You bought at the peaky peak with an overhang of 50% units owned by the sponsor (who bought at $100psf) and r pissed cause mkt went down $200k? Flmaoz.

Hi my name is w67, I am here to make fun of financial retards.

Here is an out, stiff the helocs and stop paying the mortgage. You are welcome.

I agree with w67. Prices have decreased alot in 2 years. It sounds like the sponsor is trying to sell the units at the current market price/value. What is wrong with that? I would be surprised if the Coop made any legal agreement with the sponsor regarding minimum selling price (especially for a sale a few years later).

Also, you may be better off after the sponsor sells the apartments because:
1) new buyers will find it difficult to get a mortgage in a Coop with 50% sponsor owned (more difficult in this market); so this makes it difficult to get a good price for your apt anyway. So, Less sponsor ownership should help your market price in the long run.

2)if the sponsor is selling off units in a low market, then he may need cash. If he needs cash, you may be better off letting him sell the units rather than default on his obligations. A default will hurt you more.

I think you should take a good hard look at the REAL CURRENT market for your apartment, given prices have decreased and it is MORE difficult for a buyer to get a mortgage on an apt in a bldg that is 50% sponsor owned.

you will be better off if they sell their units. tough it out, the market will come back eventually... or not.

The sponsor has no reason to sell at "extremely discounted prices." They will sell for what they think they can get. It is a business, they won't throw money away. The market went down over the past 2 years, that is just reality.

liz..are there any studios at sponsor prices? thanks

If sponsor is offering deep discounts because they are about to go belly up, then pray that they sell them quickly --at any price--before you and coop association have to go to court to decide who is going to pay the carrying charges for all the empty apts in the building. I would start saving now in case your maintenance doubles next year.

This little gem of a discussion clearly shows the state of NYC real estate (in all its splendor) now!

I think new developments and sponsor holdings are a special case - all due to the 50% sold, 90% occupied rules impacting financing. Until that goes away, this issue persists and sponsor units will sell at a discount as their reserves are bled.

Anyway, there are people working on fannie to change these restrictions for NYC, and rightfully so.

thanks for the info (except for the one a-hole) -- and FYI, despite the state of the market, the current sale price is at least $100k below the current, comparable sale prices

Serious question, then: why don't you buy the unit if it is such a great deal?

Doh! That hurts my feeling. But not as much as your $200k loss on your studio.

do you ever think before you post?

Gcondo. Good question. No.

I knew that! heartless!

Gcondo. I am surrounded by financial retards. A friend of my wife bought $1mm 2bdrm condo in 2006. Had one child and were trying like crazy to have 2nd. In vitro, upside, tantric, the works. I remember point blank 2 yrs ago explaining to them they should sell their 2bdrm, rent a 3 and buy a 3 bdrm when mrkt bottoms. Did they listen, no. Flash forward. Last Saturday she's 6 months preggers with another girl and now he ask 'me again should he sell 2bdrm?!!!!!! Flmaozz. I said you know first 2 yrs, the crib gonna be in your bdrm anyway. Flmaozzzzz they are toast.

FLMAO??? And this is a friend you are talking about? You are a real humanitarian.

I also tried to show him how to have a boy. But you need upper arm stength.

Ok, now I am curious....

they should be happy they have girls. I have boys and they drive me bananas. I, too, am a financial retard. I can admit this freely and openly and I have the evidence to prove it!

I am a genius only in hindsight.

cheers!

Dude, W67, it's not that I disagree with your substance, but what's with the demeaning tone? Liz comes here with an honest question and is clearly concerned about the paper loss on her apartment, and you have to belittle her like that?

post87. I think what w67 is attempting here is to direct OP's ire and frustration away from sponsor and onto self in his own famously vitriolic way. This poster may be here with an honest question but must face the fact that when she bought, there were countless predictions that the market was going to go down. In fact, other cities were going down in flames by 2007 with countless stories of how sponsors were dumping apts. But many, like this poster bought anyway without doing the proper research ---and, I might add pricing out other buyers who knew true value.

She is not the only one. My neighbor, a very savvy lawyer, plopped down 10% for a 2 bed at The Harrison. By the time to close came around, the apt had devalued to the point where she walked away from a substantial down payment. Two yrs ago, people were reckless with their financial decisions and W67 was right there pointing it out. People are reckless now and W67 is still here making exact same point.

Thanks, post87deflation! Exactly...it's not that I'm so stunned w the decreased value--i really just wanted to know if the sponsor could legally sell off units so cheaply...I'm probably not selling anytime soon but am always looking, just in case I see something amazing. Despite the current market value of my apt, I still feel that it was a good deal when i bought it- I have a unique living situation and the setup of this apt works for me--and by the way, it's not a studio-more like a 1 1/2 bedroom...just seems like there should be some regulation-hypothetically, if the sponsor apts were worth $100k 20 hrs ago, And i bought mine for 1 mil 2 hrs ago, what if the sponsor was selling off units for 500k? Doesn't that seem like it should be illegal? The board would have no say on the approvals and the entire value of the bldg would be compromised -- but, the sponsor would still be making a huge profit- maybe it is legal-??? also, was anyone else stunned by w67...oh, let me clarify- not the rotten attitude but the fact that he's married...whoa!! I guess there really is someone for everyone-nice!

wow...you're just confirming w67th's opinion of you.

you don't like the outcome so your conclusion is that there should be a law against it?

frankly, i'm stunned by your lack of financial acumen. you spent $1 million for an asset with no idea of how the marketplace works? and now you've lost at least $200K yet you maintain that it was a good deal? should we feel sorry for you or laugh at you?

unbelievable.

the answer to your question is no, it is not illegal.

why would you think it would be illegal?

I am often faced with people who use hindsight to judge someone's decision making process. it's annoying and pointless.

Of course, if the buyer bought in 2004 at the high, and sold in 2006 and made 200k, even though you were screaming in 2004 that the market was at a peak ---- well, whatever, you get my point.

It's not cool to diss what turned out to be someone's bad decision, regardless of how obvious you think it should have been to them at the time lol.

sponsor is selling at lower prices for one reason only.. because they have to.

I know that coop boards frequently reject sales in order to avoid having low comps on units in the building. I would expect that such activities actually hurt the building in the long run, by giving the board a reputation for being difficult, and having a chilling effect on future offers for apartments in the building. Better to focus on issues related to the prospective buyer and his/her ability to pay the price that is agreed, whatever that price may be.

Sponsors, obviously, negotiate for themselves the flexibility to sell without board approval, so they can sell for whatever price they think the market will bear. If they thought

Thirty Helens Agree: You should only own if you are a sponsor (nodding all around).

post87 says: "I know that coop boards frequently reject sales in order to avoid having low comps on units in the building."

i say: do you have any evidence that you are willing to share that supports this?

because....I am not aware of any such thing.

I think you need to rethink where the market really is? Why would the sponsor sell for less money than he/she could get? If it is really that undervalue, then it will sell immediately, so lets see how it plays out.

this thread has scared me from buying anything. Wake me up when pricing gets to 600 psf. Then I'll bid 550

Lizathomewith20cats, que que que? Yo no hablo financial retardo.

Hey Liz you can join my class action lawsuit. I'm suing my parents, they no teach 'me no manners.

CC: I have only an anecdote - my own situation when I was trying to sell a coop apartment in 2008. I came with one buyer before the crash, and they rejected her because of some contingent liability she might someday have to pay.

Then after the crash I came with another buyer, this time all-cash, but at a price 15% lower because of the crash. The board was fine with the buyer but still rejected the sale because of the price.

I know the singular of data is not anecdote, but that was my experience, and I've spoken to several brokers who say they see that sort of thing frequently. It's probably not possible to do a detailed statistical analysis of the reasons for coop board rejections, since boards generally don't put their reasoning in writing and aren't required to do so. But if such an analysis were possible I would be very surprised if fewer than 25% of coop board rejections during the downturn have been because of the sale price.

but...you've got to see that you're building a case out of one experience which, in and of itself, isn't confirmed and some broker talk. out of curiousity, do you still own this place or did you eventually sell?

"this thread has scared me from buying anything."
me too.

Liz, I wish you the best. Just stay attuned to the situation & look at all your options.

Eventually sold to that same second buyer. We had to work out a higher price with a kick-back, and split the extra transfer taxes with the buyer.

I see your point, CC, but I don't see that there's a way to get any actual data on the subject, so all I have to go by is my one experience plus some broker talk. Also, Liz's assumption (that it should be illegal to sell coop apartments too low) would tend to confirm at least some expectation out there on the part of coop shareholders that the board will "halt trading" to a certain extent to avoid depreciating comps being recorded during a downturn. None of this is great evidence, but do you have anything pointing the other way?