I live in a rent-stabilized building in Queens that is undergoing a conversion to luxury coops. Tenants who purchase their apartment for the "insider price" (only a 10% discount) will purchase "as is" and will not get renovated units (100K renos, which is why the insider price is so insulting). These are sponsor sales with one agency having exclusivity. The tenants hired an attorney who made an... [more]
I live in a rent-stabilized building in Queens that is undergoing a conversion to luxury coops. Tenants who purchase their apartment for the "insider price" (only a 10% discount) will purchase "as is" and will not get renovated units (100K renos, which is why the insider price is so insulting). These are sponsor sales with one agency having exclusivity.
The tenants hired an attorney who made an offer asking for better insider prices and we are still waiting for a response. I’m also considering making an offer on a renovated unit even though I won’t get the insider price unless I buy the apartment in which I currently reside.
I’m getting ready to reach out to the agents so I can see the renovated units and make a decision. My assumption is that I don’t need a broker since I’m not looking elsewhere – but I’m a first-time buyer and not sure. Should I hire the attorney we are using instead? He is currently working for us as a group but I will need someone to help me navigate the process pretty soon. Thanks in advance for any advice…
[less]
Response by crownsmont
over 9 years ago
Posts: 14
Member since: Oct 2015
You don't need a broker.
Ignored comment.
Unhide
Response by front_porch
over 9 years ago
Posts: 5319
Member since: Mar 2008
Maybe hire a rebate broker? if its a conversion, paying commissions to buyers' brokers is probably already pencilled in to the marketing costs, so the developer is probably offering some kind of co-broke on the renovated units.
what the buyers' broker would get paid, if anything, if you ended up buying your own unit is something you could work out with him/her.
It's not my business model (and I don't work Queens) but maybe give Keith Burkhardt a call?
ali r.
{downtown broker}
Ignored comment.
Unhide
Response by streetsmart
over 9 years ago
Posts: 883
Member since: Apr 2009
I believe the sponsor needs 15% of the units in contract to purchase in order to get the plan effective by the State Attorney General. If the sponsor does not want to negotiate with the insiders and lower the insider price then it indicates that he is in no hurry to sell the other units. Living in a co-op where the sponsor owns over 10% of the units is not a good building to buy into especially if he owns a lot more than 10% of the units. This means he will have total control of the building and it will be harder to get financing for the units since the building would be deemed unwarrantable.
Therefore the question is how many unoccupied apartments are there.
A broker who understands the conversion process could be helpful.
Ellen Silverman
Licensed Mortgage Broker NMLS #60631 since 1990
Licensed Real Estate Broker
Ignored comment.
Unhide
Response by Elleinad85
over 9 years ago
Posts: 114
Member since: Jul 2011
Hi Streetsmart - it might be beneficial if possible to buy your unit at the insider price to re-sell a year or so later (in the case there aren't restrictions on this) if you prefer the finished product.
Ignored comment.
Unhide
Response by FowlTemptress
over 9 years ago
Posts: 3
Member since: May 2016
streetsmart, yes, they do need 15% bona fide purchasers who will live in the building. They only need to sell 24 units to reach that percentage and I have no doubt that they will. They are simply playing a waiting game with us to see how many they sell this month before they agree to or reject our group proposal. They've been warehousing apartments for three years and there are 52 vacancies. I actually understand the conversion process pretty well and realize now that my questions mainly have to do with timing and financial decisions (like buying my own unit vs. a renovated one). So I think I should talk to the guy who handles my investments instead of a broker. thanks for your advice!
Ignored comment.
Unhide
Response by 30yrs_RE_20_in_REO
over 9 years ago
Posts: 9880
Member since: Mar 2009
FowlTemptress,
I'm sure you have already realized that factoring the renovations in, the insider price isn't even a discount, it's more of a premium.
Ignored comment.
Unhide
Response by FreebirdNYC
over 9 years ago
Posts: 337
Member since: Jun 2007
if you don't buy, can't you stay on as rent stabilized indefinitely? May be a better trade (or have them buy you out later).
Ignored comment.
Unhide
Response by streetsmart
over 9 years ago
Posts: 883
Member since: Apr 2009
FowlTemptress, I thought it was illegal for a landlord to warehouse apartments in stabilized buildings. Also the tenant association should sign no buy pledges.
You don't need a broker.
Maybe hire a rebate broker? if its a conversion, paying commissions to buyers' brokers is probably already pencilled in to the marketing costs, so the developer is probably offering some kind of co-broke on the renovated units.
what the buyers' broker would get paid, if anything, if you ended up buying your own unit is something you could work out with him/her.
It's not my business model (and I don't work Queens) but maybe give Keith Burkhardt a call?
ali r.
{downtown broker}
I believe the sponsor needs 15% of the units in contract to purchase in order to get the plan effective by the State Attorney General. If the sponsor does not want to negotiate with the insiders and lower the insider price then it indicates that he is in no hurry to sell the other units. Living in a co-op where the sponsor owns over 10% of the units is not a good building to buy into especially if he owns a lot more than 10% of the units. This means he will have total control of the building and it will be harder to get financing for the units since the building would be deemed unwarrantable.
Therefore the question is how many unoccupied apartments are there.
A broker who understands the conversion process could be helpful.
Ellen Silverman
Licensed Mortgage Broker NMLS #60631 since 1990
Licensed Real Estate Broker
Hi Streetsmart - it might be beneficial if possible to buy your unit at the insider price to re-sell a year or so later (in the case there aren't restrictions on this) if you prefer the finished product.
streetsmart, yes, they do need 15% bona fide purchasers who will live in the building. They only need to sell 24 units to reach that percentage and I have no doubt that they will. They are simply playing a waiting game with us to see how many they sell this month before they agree to or reject our group proposal. They've been warehousing apartments for three years and there are 52 vacancies. I actually understand the conversion process pretty well and realize now that my questions mainly have to do with timing and financial decisions (like buying my own unit vs. a renovated one). So I think I should talk to the guy who handles my investments instead of a broker. thanks for your advice!
FowlTemptress,
I'm sure you have already realized that factoring the renovations in, the insider price isn't even a discount, it's more of a premium.
if you don't buy, can't you stay on as rent stabilized indefinitely? May be a better trade (or have them buy you out later).
FowlTemptress, I thought it was illegal for a landlord to warehouse apartments in stabilized buildings. Also the tenant association should sign no buy pledges.