Experience with a number of Brooklyn co-op sales have taught us a number of lessons. Hopefully, we can save some of our fellow realtors (as well as buyers seeking co-ops) some heartache:
1. Expect the closing to take longer than anticipated. We have a sale in a large co-op development where the approval process is done in 2 phases. In Phase 1 the applicant fills out all financial and personal information without documentation and submits it to the Board for tentative approval. If approved, then the management company will provide a buyer's package to be filled out including tax returns, W-2s, personal/professional references, financial statements (banks/brokerage) and credit reports. It has taken over 3 months to get to Phase 2 and over 5 months for another co-worker's sale to move to Phase 2. There is still the Board interviews and the final closing. This is one of the reasons commissions for co-op sales are usually higher because of the many potential pitfalls and additional work necessary. As of today, we still have not closed on this particular unit, which went to contract last September 2008. It's incredible, and very frustrating for our buyer, and for the seller who happens to be listed with our office.
2. Never assume the seller is correct in his/her assertions. Confirm everything with the management company or board members where possible. Areas of concern should be subletting, pets and assessments. Confirm rules for subletting the unit and types of pets allowed. Just because you noticed dogs and owners in the lobby does not mean there isn't a restriction or prohibition.
3. Ask the management company to confirm the maintenance and if there are any assessments (i.e.electrical work/new roof/elevators/etc.) and how long the assessment will last. Finally get a copy of the financials and Board of Director minutes to familiarize yourself about any other issues that could affect the sale. You can rest assured that a good real estate attorney will be performing his/her due diligence for their client.
4. It is probably a good idea to measure the unit in order to provide an accurate square foot assessment. Most buyers want to know the actual size of the rooms and appreciate an accurate measurement. Too many listings include inaccurate measurements that can turn-off potential buyers. We create a separate webpage for each of our properties that includes the accurate square footage of each room.
By the way, this "golden rule" with regard to taking correct room measurements also applies to home sales. Nothing impresses a seller and buyer more than having all the research and facts about the home provided in advance, so their homework is done for them.
Keeping you posted...
Bonnie & Dave