Working directly with seller's broker, I made an offer on an HDFC co-op unit and received a verbal acceptance after a few counter-offers. This is my first-time home purchase, so after receiving the acceptance I picked a broker to represent me in the transaction. At this point there still wasn't a deal sheet or contract drawn out because the seller said that he wanted to make sure that a bank would... [more]
Working directly with seller's broker, I made an offer on an HDFC co-op unit and received a verbal acceptance after a few counter-offers. This is my first-time home purchase, so after receiving the acceptance I picked a broker to represent me in the transaction. At this point there still wasn't a deal sheet or contract drawn out because the seller said that he wanted to make sure that a bank would underwrite a loan on the building first (is this common?) because apparently no one in the building has had a mortgage.
I began looking for a lender and was denied by a few banks because the co-op has had operating losses in the last 2 years. The seller's broker said that the co-op raised the maintenance fee this year 40% to compensate for the expenses. A few other banks said that they could underwrite the loan IF the co-op can provide their 2013 projection and year-to-date financials.
So now the seller is saying that he has overextended himself in asking for additional information from the building management and is putting up a fight to provide the 2013 projections. So now I'm wondering if the seller has something to hide.
My broker said that usually the buyer gets the building approved by a bank before putting in an offer? Is this true? I would have needed the 2013 projections/forecast in order to get the building approved anyway because the prior year's financials look so bad, so why does it matter that I'm asking for it now?
The fact that seller's broker doesn't already have the 2013 financials in hand tells me that he doesn't have any other serious offers since any buyer would have needed them to get the building approved. So now I'm thinking I should just take my offer off the table until they can produce the info that the banks are requiring for a loan.
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Response by raddoc
about 12 years ago
Posts: 166
Member since: Jun 2008
Run (do not walk!)away from this BS. It will only get worse if you sign a contract. Think about the grief you will have at some point in the future when you try to sell this unit. If you can't afford a conventional co-op or condo think about renting while waitng for the next bubble pop.
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Response by Anonymous2013
about 12 years ago
Posts: 120
Member since: Jan 2013
It could be that your contact at the building has tension with the management company somehow? Maybe try to work with management directly on this. If they don't have any other offers, they should be very supportive about giving you a shot towards a loan. If they don't think they can get a loan, there would be no reason not to be up front about it. If it's news to them that they can't get a loan, they might be reeling a little and nervous.
I haven't had the easiest time getting financials from the HDFCs I've been interested in either. It has often felt like a feat of diplomacy.
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Response by roseslg
about 12 years ago
Posts: 32
Member since: Aug 2011
Do you know if the building is qualified with any particular bank? Some buildings are already qualified so it's easier to get a loan through one of those banks since they've already vetted the buildings. That's what happened when I purchased an HDFC. I did mine through citibank. The building got certified and then getting the loan wasn't the issue (but the coop's lawyer was a pain in my side). Ask the seller's broker. I found the place myself and didn't feel the need to bring a buyer's broker on board. I had already done most of the work in finding the place, figured I could do the rest.
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Run (do not walk!)away from this BS. It will only get worse if you sign a contract. Think about the grief you will have at some point in the future when you try to sell this unit. If you can't afford a conventional co-op or condo think about renting while waitng for the next bubble pop.
It could be that your contact at the building has tension with the management company somehow? Maybe try to work with management directly on this. If they don't have any other offers, they should be very supportive about giving you a shot towards a loan. If they don't think they can get a loan, there would be no reason not to be up front about it. If it's news to them that they can't get a loan, they might be reeling a little and nervous.
I haven't had the easiest time getting financials from the HDFCs I've been interested in either. It has often felt like a feat of diplomacy.
Do you know if the building is qualified with any particular bank? Some buildings are already qualified so it's easier to get a loan through one of those banks since they've already vetted the buildings. That's what happened when I purchased an HDFC. I did mine through citibank. The building got certified and then getting the loan wasn't the issue (but the coop's lawyer was a pain in my side). Ask the seller's broker. I found the place myself and didn't feel the need to bring a buyer's broker on board. I had already done most of the work in finding the place, figured I could do the rest.
People on SE have had better experience with Citi than Chase. http://streeteasy.com/nyc/talk/discussion/36886-banks-tighter-lending-can-save-you
That's just stupid. Hugely so.