co-op app submitted, then outbid?!?

i dont understand. is the contract signed? you cant submit a purchase application unless contract is signed and if a contract is signed and awaiting board approval, why is broker/seller still entertaining offers unless they intend to breach the contract?

i was told that the board 'does it backwards' and that they have to approve (agent oversight/board interview) any purchaser before a contract is signed. ridiculous i know, since what is to prevent the constant upping of bids? in any case, i submitted a purchase application, the checks were cashed by the managing agent and then a day later i apparently have to make a higher offer...

Did you sign a contract ? Even if it's all cash you usually sign a contact before you do a board application. Also you are assuming that your broker brought the other bidder to the apt. If you are talking about the sellers broker, he/she has no obligation to you. I'm not sure but I think that unless you have a contract the only thing that is owed to you is a refund of the application fee if they cashed the check.

i had asked the broker to represent me as a double-commission (seller/buyer) and while we hadn't signed anything, we agreed on it verbally. so in terms of obligation, i don't know what that would entail. i was essentially told though that there was to be no signing of contracts until after the board interview, this was clearly stated in writing and verbally. i suppose i just find the circumstances so strange--an offer close to ask in cash, accepted (and for a co-op with occupancy and income restrictions), submitted application package that looked great, according to broker, and then a day later a new offer? it seems however remotely possible, quite incredulous.

The board may do it backwards, but the purchaser doesn't. Even if the BS were true, you could have signed a binding exclusivity agreement. You didn't. You were played. Put a hex on the place and move on.

... the board may do it backwards, but the SELLER doesn't.

Still, do the hex thing and move on. It's Friday the 13th after all.

If you really lose the deal, you should name the brokers and the buildin. They more than deserve the payback.

oh i will for sure... i feel stupid for not signing some kind agreement now, and i figured there might have been other offers later on but the circumstances of the co-op requirements are so specific as to be almost impossible to match, especially within two days of a submitted board package... do phantom bidders ever happen here, in anyone's experience?

I'm not a RE professional, but I've never heard of a building that requires an application package before a contract is signed. A contract is between you and the seller, and both you and the seller can sign whatever you want without the board's interference. I suspect that the broker knew that there was another interested party all along and is now trying to get a bidding war. Broker representing both parties sounds like a bad idea. Call REBNY first thing Monday morning. Also complain to the managing agent.

No contract, no deal. Thats real estate. Gotta be in writing. You have a lawyer? Because this sounds like a mess and weird.

Typical NY RE BS. Brokers and co-ops muddy the waters beyond belief. Try a well-established condo if you want to own something that is not a pain to get into and even worse when you try to get out.

Sounds like you've been played by the listing broker to get a higher accepted offer. I would lean hard on him/her to get a refund of your app fees.

ali r.
DG Neary Realty

This sounds very fishy to me, but I'm wondering if the occupancy and income restrictions mentioned by the OP have something to do with it.

lad, maybe, but the conduct of the listing broker is odd here. Just because the fiduciary duty lies with the seller -- which is the set of rules we're supposed to play by when there's no buyer's broker -- doesn't mean that there are no obligations whatsoever to the counterparty.

I'd argue that there's still a duty to convey basic information about the process, and risks, to the buyer. "I represent the seller, so if a higher offer comes in before you close, I have a duty to present it, and you run the risk that the seller takes it" is a sentence that should have come out of the listing broker's mouth.

ali

kyle put it simply and that's that.
The phantom all-cash buyers, the other B.S. happens but not after contract.

Does that broker expect you to believe that the board of that building interviews everybody whom the sellers accept offers from? Offers get withdrawn for different reasons.
Does the board interview the "winning" buyer again, after the contract is signed?

Contact the broker by e-mail and get your app fees back.
Then look for another place that doesn't "do it backwards". Why would you want to live in a building where (even if true) the board does things "backwards"?!

No contract = no legal claim. Do not waste your time. Try to match the new offer if you really like the apartment or move on. Plenty of other properties in the market. You can certainly complain to the head of the listing firm and next time get your own broker.

Of course, you best revenge will be if the new offer does not go through.

That's why I suggested putting a Hex on the place.

Call their bluff and immediately withdraw your offer in writing (in email form and in written, signed, paper form), and (again, in writing) ask for any fees you paid to be refunded. You may not get them back, but make the record that you asked. Maybe you can take broker and seller to small claims, but unlikely you'll win. As others said, no contract = no deal (and no rights) so don't waste your time. You accepted the terms of the process when you knew about them and submitted your package with the fees - no one misled you. Another lesson learned...

I've never understood the mindset that all brokers are evil & unnecessary. The OP decided to wander off, a babe in the woods, & then is shocked that they were mauled by a bear. If I'm going to deepest darkest Africa, I'm certainly getting a well-recommended local guide so that I'm NOT mauled, or worse. Luckily you weren't mauled, just FU@KED (that's bad enough); next time, get a trained local real estate professional so you'll know what's going on.

drdrd: "...next time, get a trained local real estate professional so you'll know what's going on."

OP *thought* that's what s/he got until this happened.

Btw, you're not likely to see a bear in Africa, let alone get mauled by one.

Bears in the woods.
Lions in Africa.

broker needs to be names, for other buyers' sake.

he's buying bj's with the appl fee he split with the board.

bjs in the woods.
lyin in Africa.

"I had asked the broker to represent me as a double-commission (seller/buyer) and while we hadn't signed anything, we agreed on it verbally."

I am not an attorney, but at least the listing broker should have given you the Agency Disclosure Form to sign. I think that you have some leverage to have the application fees reimbursed since it seems that things have not be done properly here.
What is your attorney's opinion? It's very strange that he/she gave the ok to this procedure..

I think that the issue may be that it wasn't an official application to the board, but rather a preliminary review of OP's financials. I think that a preliminary financial review happens in many building. Without a guide to NY RE, many people might think that this preliminary review constituted the full board package.

no, it was a full board package, reference letters, application form for the building, etc.

We have had a recent discussion on what constitutes a prelim for sellers and brokers.
A full board package discussion too. Matt even gave a list of what is required.

Are you related to the "alechill" invite-only after-work parties in London?

That's reassuring.

What's reassuring,drdrd?
We resolved this yesterday.

We had the same thing happen back in Dec '06. Turned out although our deposit check was cashed, the owner never signed our contract and took another one for $10K more without the courtesy of a counter offer request. Move on, count yourself lucky and find a better place for less money. They are definitely out there, if not now then after the summer.

Have your attorney look at the NY Courtof Appeals decisions in Kooleraire and
Nassau Trust v. Montrose Concrete Prod. 451 NYS2d 663 at 667-668 (estoppel and
unclean hands and estoppel), and the First Department's decision in Rachmani v.
9 East 06th Street

east 96th
Street

96th

Bogus post. No coop would waste time reviewing a package on a sales for which there was no contract. No NY RE lawyer with a 3 digit IQ would let a client submit a board package w/out a contract.

next

Does rb345 agree with yikes?

Not totally convinced it was a bogus post.

Our attorney was very slow. We actually had our board package ready to go before the contract was signed, though we did not submit it until after the contract was signed. Our seller was a significant disruption, financially and otherwise, to the co-op, and they wanted him OUT. The co-op gave us an interview date before the contract was signed or the package was submitted. Keep in mind, small building. Just saying it's possible.

Hope you got a great price on it, lad.
can you break the floor if the board wants the seller out bad enough?
The seller wants out for sure.

lad, I'm sure your situation was an aberration. For 99.9% of the co-ops out there, part of the board package includes a signed contract.

Even for an all-cash deal, a board package is a complicated and time-consuming ordeal. I would never have gone through all that paperwork if I hadn't had a signed contract.

Sorry it happened to you alechall; I think your attorney should have been more on the ball, especially if you've never been through the process before.

i am surprised that a board package was submitted prior to the attorney doing the due diligence. what would happen if a person gets approved, but the attorney does not give a green light to the buyer?

In that alternate universe the buyer would not approve the signing.

Truth, that's exactly how the process was presented to me. Fill out the package, submit (only because it was all cash) and then the due diligence, after which I would decide to sign the contract or not.

Presented by whom?

happened to me in 2007. broker was a pig, total bullshit. the place was on the market after we walked for a few months and went into contract at our contract price later, cosed like 30k more than what we were paying. very proud of myself for never publicly shaming her here. you suck lady! you are a total pos for doing that! eh. it all worked out.

Im quite surprised anyone would put together and submit a board package without a signed contract.

That just seems insane to me.

we were very young first would be first time buyers, we did our package as soon as we had an accepted offer, we wanted everything to be perfect. i think this is precisely the reason brokers in these types of of situations take advantage, it's just too easy for them. people can be real shit and when they see people who are nervous and excited and TRUST THEM (this was OUR broker, not the sellers agent), well, there are some among us who just can't help themselves. those people are bad, mmmkay.

"Put a hex on the place and move on."

agreed. the universe does not want you to live in this place.

"That just seems insane to me."

in retrospect, it WAS insane, we were just so intimidated by the whole process and were worried that our ages would be a problem, just wanted everything to be perfect. it was insane and we were easy would be pickens for a nasty nasty greedy and stupid fat lady. im looking at YOU.

But in all your youthful excitement and desire of perfection, did you retain a lawyer?

I think alechall is telling us the truth.
He really got stuck in an alternate N.Y.C. RE universe.
The entire Manhattan RE market is an alternate universe anyway.
Nothing surprises me.

You should move on from this coop, alechall.
They do things backwards, if the broker is to be believed. Even if the broker is from a big, reputable firm.
That broker who B.S.ed me up in Riverdale last year with that condo (kind of the same thing, cash; but I didn't submit an entire board package and there was no interview needed) was from Sotheby's. ( I walked, alechall. Told them to stick that sudden, overnight all-cash phantom-buyer offer up their ass.)

A Sotheby's broker in Manhattan who wamted to list my condo, B.S.ed me and annoyed me so much that I told her (in writing,by e-mail) to get lost.

I would get a new lawyer. Yikes is right about that.

Alechall-I am curious-what ultimately happened?

it's ongoing... i'll report back when the dust has settled.

The smart money is on the Hex.

Totally