Can someone walk me through the process of buying a coop

My DH and I are planning on buying a coop and as of right now I've been doing many many searches online and research.

We found an apt that we love and I dont know what are the steps we need to take.

1. When can I speak to the management company to see if the coop is financially sound.

2. When can I request to see the house rules of the coop?

3. If everything sounds good to us, when do we make an offer... before or after you're approved for a loan?

4. When do we meet with the coop board, before or after the offer?

5. Do we need to pay a fee when we are interviewed by the coop board?

I hope someone can help us out and please give us any advice on buying a coop.

Re: Can someone walk me through the process of buying a coop

I have a 2 bedroom co-op listing in N. Bellmore right now, so let me know if you have interest and would like more info!

As far as process:

1. You make an offer the same way you would make an offer on any other property. That is step #1. You should be preapproved for a mortgage before you make an offer, but again, this is true of any property. Most co-ops require a minimum down payment, e.g., my current listing requires 20% down.

2. The seller needs to accept your offer before you move on to the co-op approval phase. As to what is entailed, that depends on the particular co-op. Sometimes you don't even need to be interviewed, the co-op just has an application packet that they review (with your financial info, references, etc.)

3. Once you have an accepted offer, that is when you get financials on the co-op, rules, etc. Of course, it is probably a good idea to ask some questions about rules before making an offer. For example, many co-ops don't allow pets (that should be evident in the listing).

Given the form of ownership (you are buying shares in a corporation rather than the physical property itself), you obviously have more rules to follow. Generally any changes to the structure of your unit (adding a washer/drying, taking down a wall, etc.) will require board approval, if it is allowed at all. So if you plan to make changes to the co-op unit you are buying, don't assume you can or that it's allowed.

But co-ops tend to be the most affordable form of ownership because you have one maintenance payment (for my listing, it covers heat, water, exterior maintenance, such as snow removal, management fees, as well as the proporationate share of property taxes). With a condo, you pay common charges AND taxes.

Good luck with your search! Don't hesitate to contact me if I can help.

Re: Can someone walk me through the process of buying a coop

Christine gave great advice.

Also, find out if you pay the flip tax and look into every co-op fee. They don't always tell you up front.

Re: Can someone walk me through the process of buying a coop

So in order to see the rules and regulations you have to have an accepted offer?

If you find out that the coop rules do not fit your life style can you back out the accepted offer with out penalty?

I guess I wanted to make an offer after we see if the coop is financially sounds and if they will take my 65lbs dog (we were told that large dogs are accepted). And I also wanted to know what the maintenance charges are going towards.

Do buyers need to go through a buyer's agent in order to have these answers answered or can a buyer contact the management group?

Thank you for telling me about your listing but my husband and I are planning on buying in Forest Hills Queens.

Re: Can someone walk me through the process of buying a coop

Ask the owner to get a current copy of the house rules. I am sure they will do that. We own in Forest Hills and I basically asked the questions and she anwsered. House rules are generally things like "no noise after such and such time..board approval for this".

FM me any time. I am familiar with all the buildings in FH and my friend is on one of the boards.

ps: MOST FH buildings are not pet friendly. Ours is but they have a certain size limit.

Re: Can someone walk me through the process of buying a coop

You can definitely find out what the maintenance includes and basic rules (regarding pets and use of the property, if you have other concerns) before making an offer. If the property is listed, the agent who listed it should be able to provide you with that information. I would definitely check all of that out before making an offer. If it's not listed with an agent, but being sold by the owner, then the seller should be able to provide all of that information or you can call the management company for more info.

As far as the financial soundness of the co-op, the financial statements are usually given to your attorney once you have an accepted offer. I suppose you could ask for them prior to making an offer, but I don't know that a co-op would really agree to disclose at that early stage.

A buyer's agent is always a good idea, because if you are represented by an agent, your interests are more protected. And if you use a local agent who works in Forest Hills, they are probably familiar with the specific co-op buildings and can give you a lot of information. And if they don't have the info, they can do the research for you.

Good luck with your search!

Re: Can someone walk me through the process of buying a coop

I agree with above..I also had to pay a fee when submitting the packet for review to the board (I want to say 100). And most co-ops require 20 percent down

Re: Can someone walk me through the process of buying a coop

one more question.

How does a buyer's agent work? Is it true that that seller and buyer's agent split the commission?

Re: Can someone walk me through the process of buying a coop

Message edited 3/3/2011 8:55:34 PM.

Re: Can someone walk me through the process of buying a coop

Re: Can someone walk me through the process of buying a coop

To answer the question about working with an agent, it can work one of two ways for a buyer. It all depends upon what type of representation that you, as the buyer, want to have.

1. You can work with an agent, but have that agent still be representing the interests of the seller. In that scenario, the agent works with you to help to find you a home, but all of the agent's fiduciary duties (loyalty, confidentiality, etc.) flow to the seller. The agent has to behave ethically and cannot deceive you, as the buyer, but ethically, the agent's duty is to get the most $ for the seller, not the best deal for you. If you choose this option, you are a customer of the agent. The listing agent will split the fee with the selling agent (e.g., the agent who brings the buyer to the deal).

2. You can get a buyer's agent, in which case the agent represents the interests of YOU as the buyer, not the interests of the seller. The agents fiduciary duties flow to you, and he or she tries to get YOU the best deal (and not the seller). Because a buyer's agent has additional responsibilities to the buyer and has to more independent research on the property, a buyer's agent will usually ask you to sign a buyer's broker agreement in which you commit to working exclusively with them. The fee arrangements can vary, but it is standard for a buyer's agent to ask for a 3% service fee and for the seller's agent to give 2% of his commission to the buyer's agent, so you may have to pay an additional 1% to the buyer's agent. BUT the buyer's agent will generally save you money by getting you a better deal. Buyer's brokerage has not caught on that much on Long Island, but it is very big in other areas of the country, and honestly, I think it makes most sense for the buyer. I used a buyer's broker when I bought my house in 2008 (before I was in real estate) and I would recommend it to anyone.