Boards rejecting deals because of low prices

I'm sure this varies by the building, but I think my coop would be happy to have the $ generated from the flip tax on a reasonable sale price. We all know that prices are lowering. Boards are not stupid. They fully expect to see lower sales values come in. As long as the buyer is qualified to pay the price as agreed upon with the buyer, I don't think *most* boards would hold up a sale.

I think they care more about your tax history & bank accounts demonstrating you'll have no problems with the maintenance.

they can continue to turn down applicants until too many units need to be sold to continue maintenance payments. unless they have no underlying mortgage and have amazing balance sheets, coops will most likely need the continued payments over flip tax revs.

I would imagine if there is any concern over the buyer at all, though, and the price is low, they would reject the buyer. If everything is stellar, they pass the sale even if it's low. That will likely slow the pace of sales even more.

My experience has been that the boards were not too concerned about sales prices as has bee stated. I the mid-1990s prices were off an easy 30-40% and had zero problems. Hey, market prices are what they are & cannot be artificially supported.

Some co-op buildings will no doubt run into problems refinancing their mortgages if the current economic downturn persists (no reason to believe otherwise). I that case, all bests are off as to what a unit will sell for.

We actually had this conversation a few months ago with our mortgage broker and her feeling was not to bother to waste our time going through the process at 30% below building comps because we'd likely be rejected (purely based on price.) I am not sure that is the case anymore.

Brokers are of the view that you should always make an offer (I wonder why?!) and one told me that you could consider suing if someone on the board ended up buying the apartment at the same price they turned you down at. I don't think it's so much of another person on the board buying it but rather them not wanting to affect comps. Still, as people pointed out, they are not completely unreasonable and know that prices have to come down.

Btw, aren't sponsor units offer sold really cheap? Don't they affect comps or are they not included?

if somebody stops paying maint -- they are usually happy to sell to get the person out and get the flip tax...

Would you believe that this is still happening, board rejected a friend of mine due to price being too low although he gave the asking price and the last comp in building was last year and price was 10% higher then that unit. Ok it was on a higher floor of a walkup but it also didn't need a new kitchen. Suggestions for him on what to do?

You have absolutely no idea that your friend was rejected based on the price.

Yes, they gave him a price they would accept which was 20% more than the asking price for the unit which would be 30% more than the last sale, just last year.

i suggest getting the deposit back asap

Just another example why co-ops are so stupid. Too often people work in their own limited self-interest.

He should be thankful. It's frustrating, but best in the long run. Given that it's a walk-up, this building probably has a very small co-op board who is apparently quite draconian. This dictator like mentality likely extends to other decisions including capital projects and rules. It's better not to buy there, not to live there, and not to have to eventually sell there.

aalsberg
about 15 hours ago
Posts: 32
Member since: Mar 2011
Yes, they gave him a price they would accept which was 20% more than the asking price for the unit which would be 30% more than the last sale, just last year.

I also have a "friend" who offered too high and the board slapped his head and wanted to accept 20% less than the asking price.

Here is an article by some people in the know.

http://www.stroock.com/SiteFiles/Pub1152.pdf

Thank you wanderer really good article and on point, I forwarded it to my friend. People like you and the others that responded make this a great community! Too bad co-ops are the last vestiges of our discriminatory and slave based past. I am just surprised that New York City the bastion of liberalism it is allows this discrimination whether price based, race based (although they would never admit it) to proceed in the 21st century! The fact that a board can reject you without giving a reason just seems to be un-American, at least this board my friend was up against was honest I give them that much credit.

@ MATT ... YO CHICKENSHIT, wanna chime in or is yo head stuck in the sand AGAIN ?

"...Too often people work in their own limited self-interest..."

Yeah. Like protecting their investment. That's why I like co-ops.

As opposed to a potential buyer working in "...their own limited self interest..."

It's clear Ottawanyc, wanderer, and aalsberg need to form their own co-op - they can decide to let in all types of people with questionable credit, unclear income, no personal recommendations, and so on....