I want to make an offer on a coop, but...

I wouldn't make an offer under those circumstances. Why take the chance? Don't bend to their ever more bizarre rules and coop boards will eventually get what they deserve.

I agree. I'd approach offering on a co-op like a marriage: know all the financial dirty secrets upfront.

Not, however, that I've ever made such an offer, so take that with a heaping teaspoon of salt.

Wow this is so 2 years ago..lol. For the most part sellers/brokers don't like to release this information to a "buyer", but rather to your attorney-and usually not until you have an accepted offer and a contract has been sent out. As a broker the first thing I do when I get a new listing is get the last two years of financial statements and the offering plan as this can take a little time. The board will release the minutes to your attorney and in some cases will insist he/she come to the management companies office to read them.

Make your offer based on what you know, then your attorney will complete his/her due diligence and discus what has been unearthed. Board minutes can be especially revealing as you can sometimes get a little peak into future events such as assessments for a major capital improvement to the building or a leak in the "c" line west wall. Based on what you discover you can proceed with the deal, adjust your offer or cancel it altogether.

I am definitely a newbie when it comes to buying real estate, Burkhardt. Thanks for your insight.

Answer me this: I understand that sellers/brokers don't LIKE to release this information. But how can I reasonably negotiate for something that I don't know if I want? I mean, what if there's a huge flip tax, or problems with my upstairs neighbor -- those could be deal-breakers. Or if there are plans to redo the elevator and assess the members a large sum, or repoint the building -- those could affect my offer.

Linezolid, in general what is "common practice" is altered by market circumstances. yes I would agree that from 2002 to about 2 months ago, that indeed it was common practice for the seller to not provide this info until an accepted offer was reached. This is because it was a sellers market. Times have changed, and this practice will change too. Perhaps the agent is thinking he is doing his seller the correct service in this situation, but the truth is that your attorney would have all the access to this information anyway before you signed any contract, so common sense would dictate that in this market the seller would opt for transparency in the beginnning as a show of good faith and so as to keep a buyer interested. Another example would be signing no mortgage contingency contracts, thais was also once common practice, certainly no more.

Linezold, tell the broker to go F themselves and you aren't considering the apartment unless they provide the information. In this market if they walk away from that then they really do have something to hide.

Dax: thanks, that's what makes sense to me.

JGR: Yes, I think you're right. Except for I might be a bit more circumspect.

You just gotta have alternatives and be willing to walk away. In this market there are plenty of alternatives.

I just want to add that in this market I would have P.Diddy's butler hand deliver these docs to any customer making an offer on a co-op I held the exclusive on. And maybe throw in w67th's 3 legged mariachi dog as an extra incentive just to sweeten things up a bit.

Flip tax that's easy your broker should know this.

Dax it is Keith...and you?

Linezolid, if you really like the apartment, in this market the chances are slim that there are several interested parties, so I think you should simply explain to them that you are indeed interested, but you are well aware of the market place and feel that it will save everyone time if you have this info in advance, and that if they are really looking to make a deal, wouldn't they rather have a buyer who is fully committed to the offer they are making and is already aware of all circumstances with regard to the coop, this means that once an deal is reached, there will be no surprises.

hi Keith, its David formerly of JC DeNiro, now with Corcoran. We did a deal at 11 east 36 I think when you worked with Lucie Holt, and I also had some buyers for a place on east 11th which you had but they ended up buying in Murray Hill

I'm with jgr. Frankly, I wouldn't recommend buying now, but if you are going to buy, I think you have the luxury of insisting on a perfect situation.

line zolid, out of curiousity if you would want to share what building it is I might be able to give some insight, i have done deals in pretty much every building downtown, and a number on the west and east side, so may have some inside scoop. I could tell you what i know if that would hep inform your decisions.

It's in Brooklyn, Dax. And a small building.

Burkhardt: you seen to have a bit of a chip on your shoulder. Of course the broker might know about the flip tax. I don't want to know about the flip tax. I want to know the whole package. I don't want to have to think up every possible problem, and ask each individual question. I want to see the paperwork, read it, make sure that there is nothing that would get me to walk away, or modify my offer. Obviously, if we agree on a price, I'll have a real estate lawyer go over the finances, the contract, and everything else, as is standard.

As far as WHETHER to buy at all, I'm of two minds. Obviously, I'm going to make a fairly low bid, but we all know the problems: not knowing where the real estate market is going to go, coupled with not knowing where the economy is going to go is unnerving, to say the least. Slope is probably right that it's not a great time to buy, but if I can get a bargain, with a decent mortgage rate, I would consider taking the risk. I could stay in this place 5-10 years if circumstances were right (or if they forced me to), which makes it a teensy bit more attractive to buy.

It just amazes me that access to this sort of information needs to be negotiated on the basis that it is a "buyers market".

What the hell? It is me or is NYC one of the few places where people can both reject normal business practices while demanding over-the-top, excessive practices from others?

I am sorry but this sort of approach leads me to believe that buildings like this are covering something up; meanwhile they ask buyers to not only reveal every last detail of their lives, but go through a ridiculous approval process that many of the board members wouldn%u2019t pass themselves.

Why do I have a feeling that many buildings in NYC aren%u2019t run as well as they should be and exist on far greater suspect financial ground than most are led to believe? If this recession drags on as long as some think it will, I think we are going to see many %u201Carrogant and picky%u201D coops turn out to be completely poorly managed and absolutely unprepared to face the potential financial turmoil.

A year or so from now, well into the collapse of Condo prices, the new NYC RE headline could be that co-ops weren%u2019t as safe of a bet as many thought they were.

There is no way I would buy into a co-op without absolute full disclosure. If the building doesn%u2019t have any problems or issues, then they shouldn%u2019t be afraid to share what should be commonplace transaction information.

This is bizarre - I have bought 3 coops in NYC and looked at the financials, etc of countless others that I evaluated. The broker is totally out of line and sadly most likely hiding something. If you are still interested (which I would NOT be), I would make a pretty low offer and make it contingent on your/your lawyer unqualified approval of all agreed-upon paperwork. Be upfront and say, "we will continue to look at other properties until we have approved the paper work and signed a contract."

And I would also post that brokers details here so no sellers ever use him or her again!

Even in much slower times I never received the financials until after making an offer. Twice I rescinded offers based on financials. Once I negotiated a lower price. The delay can be a tool in your favor as well.

LZ no chip you asked about flip tax and I was just pointing out that one is easy to find. In my somewhat tongue in cheek 2nd post I am actually being serious, I would get a potential buyer these docs although board minutes can be a little tricky. I agree it is a buyers market and as jgr points out you can just walk. Village has bought 3 co-ops and was able to analyse ALL these documents before an accepted offer? Wow...I can tell you that that is unusual-do I think a buyer should have access to these documents prior to submitting an offer 100% yes. But that is not how most business is getting done here and any number of brokers, attorneys on this board will confirm this.

So if you are not comfortable with this or on principle want to tell the broker, seller to F.O. as was suggested by another poster...go ahead. But if you really love this home and you think you will be happy there for at least 7-10 years perhaps you can ask the important questions. Then based on what the answers are you can proceed with an offer. Here are a few:
1. How many years has the building been a co-op? This can be important-long stable record is a good thing.
2. What percentage of the building is owner occupied?
3. Are their any assessments currently or planned?
4. What is the flip tax, if any?
5. What is the sub-let policy?
6. What is the age/condition of the boiler/elevator/roof?
7. What is the financial condition of the building?
8. Are there any planned major capital improvements?

Many broker's you meet along the way may still want to adhere to the old model and not give these docs up, or at best just give you a verbal until a price has been agreed on. I know all their reasoning I have been at this 17 years-you won't like it and I think it's silly.

I think having a PDF with all this information available so you can send it straight away to a buyer who would like to see it is a good thing. I lived in Brooklyn for about 8 years and have sold half a dozen properties there in the last few years. If you have any questions about the neighborhood or something about the building send me an e mail or give me a call.

You mentioned it is a small building, this requires extra scrutiny...best.

Basically you are only beginning negotiations when you make an offer and it is orally accepted. The written contract is the final stage of negotiations and all that matters. You aren't prejudiced if there is something being "covered up" in the back and forth oral first part of the process of reaching a preliminary meeting of the minds--if you later feel you overbid or want to alter the terms once you see the minutes, financials, etc, you are able--and indeed expected--to negotiate further. Again, if after reviewing all the data you will get after reaching an oral agreement you want to revise your position in any way, that is not terribly unusual. You suffer no harm. Until you ink the contract, there isn't a deal of any kind. I wouldn't get too hung up on this.

You are making a mountain out of a molehill.

Standard procedure is this: You make the offer, it is accepted. THEN you (or your attorney) does due diligence on the building--checking financials, minutes, etc. It is absolutely NOT standard to demand these things up front, before an offer is made.

You can, and should, ask the questions outlined above by Burkhardt before making your initial offer. You should also educate yourself by having your broker pull comps to help you determine a fair price. But access to the building's paperwork comes AFTER your offer. Your attorney will have ample time to satisfy any concern about the building before any contract is signed.

"You make the offer, it is accepted. THEN you (or your attorney) does due diligence on the building"

BWAHAHA!!!!! And people wonder why I hate realt-whores. THis may be standard practice for you, and a practice you'd no doubt like to sustain since it raises the odds you'll be able to pull the wool over someone's eyes and collect your precious "double bubble", but the fact remains that doing due diligence AFTER you've agreed to a price is standard in NO OTHER business transaction that I am aware of. I strongly suspect that, just as in so many other areas where the consumer has been protected from the snake-oil salesmen, a strong legislative response against this sort of crap will occur. Sort of a truth-in-lending law for purchasers of real estate. As Supreme Court justice Lewis Brandeis once said, "Sunshine is the best disinfectant".

Of course, once all the meaningful data on a transaction sees the light of day - the MLS data, all the financial data, etc, and there is nothing else with which realtors can play "hide the ball", it raises the question "what will we need brokers for?". And the answer is nothing; YOU are what is being "disinfected" in Justice Brandeis example above...

I agree with kylewest. This isn't that big a deal. By making a verbal offer you are not committed to anything. It is standard to make an offer and then have your attorney review all of this information before a contract is signed. If the financials or minutes or other co-op documents show something amiss, you can always renegotiate before the contract is signed. Often these documents are kept with the managing agent. If the managing agent permitted anyone who was even considering making an offer from coming to their offices to review the minutes, management fees would skyrocket.

Educate yourself as much as possible and ask the broker as many questions as you may have, but don't get hung up on this.

If it's true that making a verbal offer and acceptance isn't committing you to anything, then why even bother? It's just a silly, empty procedure. Does the following make any sense to anyone:

"I'd like to see X,Y,Z documents."
"No, first there needs to be an offer and acceptance, but it's not binding."
"Ok. Since it's not binding, I offer $1 billion dollars for your Roosevelt Island walk-up studio."
"Accepted."
"Ok, now can I see X,Y,Z, documents?"
"Sure"

"If it's true that making a verbal offer and acceptance isn't committing you to anything, then why even bother? It's just a silly, empty procedure."

You miss the point. It is a first stage of negotiations to see that buyer/seller are both at least in the same realm and that a final meeting of the minds seems likely. But is is unreasonable to expect that during these preliminary negotiations every buyer will pay a lawyer to engage in due diligence and review coop minutes and financials, and for managing companies to open their files to anyone who walks in. The OP's surprise is understandable if OP is unfamiliar with NYC RE, but in a coop saturated market, the local practice makes sense.

In addition, it is worth noting that oral RE transactions are unenforceable in NYC--the Statute of Frauds requires all RE dealing to be in writing and signed by both parties. Thus, the buyer is not at all bound in the early stages of negotiation, and if due diligence reveals things the seller will not resolve to the buyers satisfaction, the buyer can just walk away. This cuts the other way, too, though. The seller can sell to a third party until a contract is signed. Overall, neither seller nor buyer has a terribly meaningful advantage under current practice.

I think the forest is lost for the trees in the OP, and that perhaps the info in these posts provides more context for existing practice. The flow of info isn't really an issue in the way it is raised in the OP.

What will really piss you off is when, for whatever reason, the building docs don't show up for a number of days after the oral offer is accepted. Then you can really spew.

kylewest: again, if it's not binding in any way on either party, what's the point? I get that it's the "first stage of negotiations" but it seems like a real stretch to say that "a final meeting of the minds seems likely." If it's not binding on either party, then it's form over substance. Might as well go back to the days of handing over a clump of dirt to consummate a RE transaction.

I really don't get your point when you say it "is unreasonable to expect that during these preliminary negotiations every buyer will pay a lawyer to engage in due diligence and review coop minutes and financials..." That's not the point. The point is that certain buyers would LIKE to pay a lawyer to do that kind of work before going further along into the process.

slope, it's generally a one-week or so process. It all happens at the same time. Oral offer, you find attorney (or have one already, even better), documents go to attorney, contracts exchanged until finalized. If you find out building has nothing in reserves and will need new elevators and a new furnace system next year you can ask for concessions or walk away. There's no real extra time, money or effort involved.

It's the way the system and the law works. At any time before the contract is finalized and signed, you can say screw this and walk away. They can say I have a better offer from Great-Aunt Helga so you don't get the apartment.

linezolid, since you are not bound until you have a signed and countersigned contract, you really are getting ahead of yourself. It's a little like going on a second date and asking your date how many kids they want and how they want to raise them.

I don't work Brooklyn but I can't imagine that most agents are going to release this to you without even an offer on the table. They are not "hiding" anything, they are just not far down the sales path with you yet.

To look at it from their point of view, I bet no one has asked you to fill out a REBNY financial disclosure form of your assets with your bank account numbers on it yet either.

You might want to scale back to questions about the things that you would be looking for in the financials, like "what's the date of the underlying mortgage" and "when was the roof last replaced?"

Also, @aboutready, FYI: the "one week" from offer to contract has generally become "one month" in this market.

ali r.
{downtown broker}

Agree with the brokers here (which is shocking, really). I would definately ask the questions now, and get verbal responses. But no need to start reviewing documents until you think you might have a deal. You can certainly tell them you are concerned about financials, etc., and in the interest of time you'd like to see them sooner, but I wouldn't sweat it. And this really can work to your advantage. For instance, after you've made an offer you feel comfortable with, you might be able to negotiate adjustments based on things you uncover. In this market a seller would not want to walk away once they are so close to a deal.

Also, for those that are shocked by this and think it is a NY thing, it is not. In all sorts of transactions it is typical for sellers to hold back information and provide only verbal responses until they have a deal, and then allow buyers to review and diligence the deal before signing. No one likes a fishing expedition.

ali summed it up nicely, linezolid. The issue isn't that they won't disclose the info, it's that it typically isn't done until an offer is accepted. Then your atty and/or you conduct the due dilligence, whereby they HAVE to disclose and answer all of your questions to your liking BEFORE you both sign the contract.

The broker could've explained this but sounds like he/she didn't.

From a practical standpoint, it could take some time to gather this information. Plus, I can see how providing financials and other (confidential) information to anyone who asks for it would be inappropriate. I'd feel more comfortable knowing if someone is more serious, and I'd think that in this market a seller would see many flakey potential buyers.

This is similar to how M&A deals are done among companies. In this case, the coop is legally a private corporation.

"To look at it from their point of view, I bet no one has asked you to fill out a REBNY financial disclosure form of your assets with your bank account numbers on it yet either."

Well, actually, they kind of have--they won't let us make a verbal offer, but are asking us to fill out and sign their offer form, which includes listing all of our assets and liabilities. Not with account numbers, no, but I assume one is expected to be honest. So it feels like a case of "You show us yours but we won't show you ours," and that just doesn't sit well with me, especially given the current market.

linezolid, I don't see your end game here or what overall negotiating benefit you are seeking. The current system can be used to your advantage. You present yourself as an eminently qualified buyer by providing a thumbnail sketch of your finances. The seller reviews that, is impressed, and wants to sell to you. You now negotiate a price as fiercely as you like. You both shake hands so to speak and move into due diligence. If problems are uncovered, you now go back to seller and whittle down the price. That is the only way the price goes at that point: down. The seller has no leverage to get you to up the offer once you look at finances since the hand shake is made assuming all will check out with the building. The best the seller can do is hold on to the negotiated price. The best you can do is cite surprises in the documents and attempt to negotiate down. Why would you want to give that up by seeing it all up front? It isn't good negotiating strategy. Time is on your side in this market. Why would you want to hurry a process that can be used to work to your advantage? Your concern seems short-sighted to me. I pretty much negotiate for a living, and strategically I don't understand what disadvantage you are claiming to ultimately be at here.

Linezolid, actually, it's more even than you think. Typically the following is disclossed up front: maintenance, % tax deductable, assessments (if any), flip tax (if any), liquidity requirements, % down. These could give you a general sense of how the building is financed and whether you'd qualify.

They're NOT asking you to provide your tax returns, W2's, bank statements, etc. What they want to do is find out if you're a qualified buyer so the seller and the board won't be wasting their time with someone who makes $50k and has no money in the bank. It takes a lot of time to process and review each board application.

When I first started working as a real estate agent, and I was as green as grass, I was contacted by buyers who said they were looking for a $5 million apartment.

I trusted that they had resources because of where they came from (a referral from someone in the mayor's office) and because of the companies that they were tied to. They soaked up a lot of my time, the time of other agents, and ultimately the time of a developer before not making a deposit payment on a Tribeca penthouse.

It's possible that that's the way things might have played out had I been experienced enough to qualify them better, but I doubt it. The point is every listing agent has a story like this of people who blew into town dripping with diamonds and then disappeared.

That said, you're allowed to have whatever consumer concerns you want -- it's your money!

Maybe you might try submitting a written offer with your name, place of work, salary, and a broad and vague range of assets (say, $100K - $500K or $500K-$1mm). As the seller counters, you can begin to wring information out of them and trade with each other a piece at a time.

It sounds like, though, given your discomfort with the process and lack of knowledge about specific buildings, that you would really benefit from working with a buyer's agent.

ali r.
{downtown broker}

adding to ali's point, this creates an incantive for the seller/listing agent to provide as much pertinent information up front as possible on the financing requirements, and to solicit the same from potential buyers.

If you've seen enough places you can get a good sense about the fiscal stregnth of the building based on info provided up front by the seller (are monthlies too high relative to amenities being offered (health club/doorman/play room)

You do get agents who aren't too sharp or try to gloss over stuff, and buyers do fabricate, but in the end everyone loses. The last thing all parties want is to have an accepted offer be rejected by the coop board months later because the financies weren't up to snuff.

If you're a first-time buyer, using an agent could be a great source of information, and it won't cost you.

((You both shake hands so to speak and move into due diligence. If problems are uncovered, you now go back to seller and whittle down the price.))

Kyle is correct here. This exact thing happened to us several months ago--we had an accepted offer but due diligence turned up some red flags with the building (most notably, lack of a sufficient reserve fund). This prompted us to renegotiate our price, bringing it considerably lower. The seller accepted the lower price. Ultimately, the deal fell through for other reasons (for which I am now very thankful, given the sharp price declines since then), but the lesson learned was valuable.

Expecting to obtain board minutes and building financials before putting in an offer is, at the very least, naive. It is simply not how business is done. You wouldn't expect to conduct an appraisal before putting in an offer on a house, would you? Of course not.

Offer what you're willing to pay (based on comps, condition, location, view, etc). If your offer is accepted, THEN request access to the books. If you find anything amiss, use it as a negotiation tool.

Thanks, all.

I surely admit to being inexperienced and naive in real estate transactions, and I acknowledge y'all's points about using it as a negotiating tactic.

I have no intent on insisting on anything which might not be considered "customary" at this point. My personal feelings aside about whether the system is reasonable, the system is present, and I see no direct advantage to being a prick in order to get what I want.

Again: I understand what is "customary". But just as an aside, Bramstar, I wouldn't conduct an appraisal or an engineering survey, for example, without being closer to a purchase because these are expensive, especially if done on multiple apartments or buildings. But if I was buying a business, or a car, I certainly would want to see some documentation before submitting an offer, which would cost no more than an hour or two of my time, or a couple of bucks for an accident history from Carfax.com. It seems to me that the seller and/or the seller's agent would be able to provide a couple of mimeographed sheets with the pertinent information that any buyer would want to know, as in theburkhardtgroup's post a bit earlier.

In any case, I'm going to make a nice, low offer, and we'll see what they say at that point. I don't see a lot of coops moving in Park Slope right now (3Q sales have dropped 40% in NE Brooklyn, as per Bloomberg.com).

http://www.bloomberg.com/apps/news?pid=20601103&sid=af8eGyLaXVbE&refer=news

"So it feels like a case of "You show us yours but we won't show you ours," and that just doesn't sit well with me, especially given the current market."

Let's all say it together: REALT-WHORES ARE TRYING TO FUKC YOU! Tell them "if you've got 5 other people lined up to engage in a bidding war for this OPT*, you don't need me so have at it...otherwise, i'll expect the docs i'm looking for by the morning".

* Over-priced turkey

Admiral, I am not a fan or brokers and don't love the NYC RE "customary" process. However, no one is trying to "fukc" linezolid here. I am a RE novice, but I've spent most of my career involved in M&A deals.

You say "but the fact remains that doing due diligence AFTER you've agreed to a price is standard in NO OTHER business transaction that I am aware of".

This is blatantly wrong. Detailed due diligence after a preliminary price/terms agreement is customary in most transactions, certainly all of the ones I've been involved in. As a buyer, I prefer it that way. In an M&A transaction, diligence costs me/my firm a lot of time and money - we have to pay lawyers, accountants, consultants, etc. Why do all that if I have no idea whether I am even close to a deal? Similarly, if I'm looking at buying a coop, why would I want to waste a bunch of my time diligencing all the details if I'm planning to put in a lowball offer that may well get rejected? Ali's dating analogy is a good one. Yes, making sure that you're compatible in the details is important before you commit to getting married, but why bother with all that stuff if you haven't even figured out if you like each other yet?

Even though the oral offer is not binding, it's useful precisely because it shows that the foundation for a deal is in place, and encourages both sides to devote resources to diligence and formalizing the deal.

As kylewest others have pointed out, this process is actually to the buyer's advantage. You make an offer contingent on all your diligence checking out. If it does, you get what you wanted. If it doesn't, you have a chance to renegotiate or walk.

Just my 2 cents.

Newbuyer99: "this process is actually to the buyer's advantage."

For the life of me, I can't see how or why a coop board would insist upon a policy that was actually to the buyer's advantage. That makes zero sense.

Newbuyer99: "this process is actually to the buyer's advantage."

For the life of me, I can't see how or why a coop board would insist upon a policy that was actually to the buyer's advantage. That makes zero sense.

((But just as an aside, Bramstar, I wouldn't conduct an appraisal or an engineering survey, for example, without being closer to a purchase because these are expensive, especially if done on multiple apartments or buildings. But if I was buying a business, or a car, I certainly would want to see some documentation before submitting an offer, which would cost no more than an hour or two of my time... It seems to me that the seller and/or the seller's agent would be able to provide a couple of mimeographed sheets with the pertinent information that any buyer would want to know))

Right, but understand that time costs money on both sides. If the seller were to provide requested documents to every person who expressed a passing interest in the apartment, that would cost the seller time and money. Interested buyer A may have a completely different set of questions/concerns than interested buyer B. Expecting the seller to provide written documents that anticipate and cover all possible questions from all potentially interested parties is absurd.

Most show sheets contain basic info on things like flip tax, current maintenance and assessments, etc. You can easily ask and get answers to any additional questions on things like sublet policy, age of the boiler, whether washer/dryers are allowed, etc, etc. There is no need to obtain "documents" to determine this info.

Slope11217 - "For the life of me, I can't see how or why a coop board would insist upon a policy that was actually to the buyer's advantage. That makes zero sense."

The policy makes sense for the co-op as well, as they have to pay someone - a management company, their own lawyers - to review the buyer's financials during the same period of due diligence. They don't want to waste money and time any more than the buyer does. In the end, the negotiating advantage goes to the buyer, but the process benefits both sides (from a time/$$ management perspective).

tina24hour: your "answer" isn't an answer at all. I understand that the coop board would have to pay someone else to review the buyer's financials (at some point in the process), but that doesn't explain why they refuse to give the buyer access to information that the buyer requested. The cost to a coop board of making information available to the buyer is completely and totally separate from their cost in reviewing the buyer's financials. That is, they can make the information available to the buyer without incurring the costs of having to pay a lawyer to review the buyer's financials.

I would NOT buy if these docs are being withheld. In EVERY transaction I have done, my buyer or my seller would provide:

1) 2YRS bldg financials - unless its new dev
2) Offering Plan
3) Access to board minutes - which doesnt mean much because the board can choose what goes in there, but is helpful if they do include things that are being discussed. Usually your attorney goes to managing agent for this review.

This is COMMON PRACTICE! Very strange and raises many red flags.

Noah - OP isn't talking about closing on a deal, but rather making an offer.

Slope11217: I did a co-op deal recently in which the building's meeting minutes were housed in a storage facility in another borough (I kid you not). To access them, a member of the management company had to go the facility and obtain the originals, from which one copy was made and the originals returned to the vault. It was like the last scene of Raiders of the Lost Ark. Never underestimate the bureaucratic capacity of a New York City co-op!

There are costs involved every time paper exchanges hands in real estate. I'm always amazed at how transactions in our business feel like something out of the 19th century. If you've ever been to a closing, you know how old-fashioned it seems. Identification is checked. People sign in. There are no computers, but everyone has a calculator. The photocopier never stops humming. People use honest-to-god White Out. And then EVERYONE gets a paper check from the buyer or the escrow account.

I'm not saying it's right. I'm just saying that in addition to all of the reasons listed above by helpful, well-informed posters, that the co-op has its own interests in mind when not making that information publicly accessible to the casual viewer.

tina24hour: again, so what? I'll do this step by step for you.

(1) Newbuyer99 tried to argue that this arcane practice is in the best interest of the BUYER.
(2) I pointed out that it would be illogical (at best) for a practice imposed by the COOP BOARD to be in the best interest of the BUYER.
(3) You then presented what you thought to be a response to that point.
(4) I responded by pointing out that your response was a non sequitur.
(5) And your response to that is, "co-op has its own interests in mind when not making that information publicly accessible to the casual viewer."

Do you see the problem here???????????????????

If you're abandoning your claim that this is in the best interest of the BUYER, that's fine, but please be upfront about it. Instead, you're just bringing up yet another irrelevant point.

Okay. I was responding to your point that "For the life of me, I can't see how or why a coop board would insist upon a policy that was actually to the buyer's advantage. That makes zero sense."

Then I said that it is in the co-op's interest as well, even though it does give the buyer the negotiating advantage. If there is a difference between the buyer's offering price and a renegotiated price based on inadequacies discovered during the due diligence period, that cost will be absorbed primarily by the seller, not the co-op itself. It's the seller, not the co-op, who loses money.

Eventually, those buyers become members of the co-op once the sale is closed, remember. Presumably, the co-op has nothing to hide from fellow shareholders. But folks like us, nattering on in a public forum - of course they don't want us dissecting their business.

>>I would NOT buy if these docs are being withheld. In EVERY transaction I have done, my buyer or my seller would provide:

1) 2YRS bldg financials - unless its new dev
2) Offering Plan
3) Access to board minutes - which doesnt mean much because the board can choose what goes in there, but is helpful if they do include things that are being discussed. Usually your attorney goes to managing agent for this review.<<

But Noah, nothing's being withheld at this point. The buyer has demanded to see these documents before even putting in an offer. That is absolutely NOT common practice, at least in my experience.

How can you make an intelligent bid if you haven't seen the financials?

Seems to me that's just basic due diligence and is an important factor in determining your bid price.

Am I missing something here?

"Then I said that it is in the co-op's interest as well, even though it does give the buyer the negotiating advantage."

That's simply NOT true, and I'll give you two reasons why it's not.

(1) The sellers, as owners in the coop, presumably know all the information that is being withheld from the buyer. And I will NEVER believe that it could POSSIBLY be in the BUYER's advantage for only the OTHER PARTY to have the complete information. Just to claim that it COULD be to one party's advantage that only the other party has the complete information is absurd.

(2) Making a bid in the absence of all the information creates an anchoring effect. Even if there is new information which suggests that the bid needs to be brought down, there will be a psychological effect that will tend the anchor the "new" price closer to the "old" price than what the price would have been had all the information been known to all of the parties at the outset.

>>How can you make an intelligent bid if you haven't seen the financials?<<

Ok, then why not get a full inspection beforehand as well? I mean, what if there's hidden water damage? Leaky pipes? An infestation of bedbugs??

What are you expecting, exactly? To take an hour of someone's time so you can peruse a bulging folder of board minutes only to say "meh" and walk away? No seller (or board) wants to waste that kind of time, not to mention share private info with anyone who happens to walk in off the street.

Your initial offer is NOT binding in any way. It is based on a visual inspection of the property. The real nuts and bolts come later with due diligence. If there are problems you can renegotiate or walk away -- no harm, no foul. Your appraisal will generally happen after the contract is signed, so it makes sense to add a clause that allows you an out if the property appraises lower than the agreed price.

Slope11217 - I agree with you about the anchoring effect. A buyer should be very clear about what, given the information he/she has received, he/she is willing to pay for a property. Much of this information can be obtained by asking (in writing) the series of questions outlined by theburkhardtgroup above:
"1. How many years has the building been a co-op? This can be important-long stable record is a good thing.
2. What percentage of the building is owner occupied?
3. Are their any assessments currently or planned?
4. What is the flip tax, if any?
5. What is the sub-let policy?
6. What is the age/condition of the boiler/elevator/roof?
7. What is the financial condition of the building?
8. Are there any planned major capital improvements?"

The listing agent should be able to answer these questions without needing access to all the co-op docs. Then the buyer assesses the situation and bids accordingly. If the stated responses to the questions above don't check out, the buyer has the upper hand - especially in this market. The buyer alters the offer, which -- as you point out --is anchored to the old price. Let's say there's a pending assessment not mentioned in the reply to question 8 above. The buyer could simply deduct the amount of the pending assessment from the bid. If the buyer feels he/she should extract a greater concession, that's the buyer's prerogative. If there is no meeting of the minds, the buyer can walk away. Therefore, the buyer is in control, albeit anchored to an agreed-upon price.

Is this unfair? I don't think so. Apparently you do. I respect your position, even if I disagree.