TOP TEN TIPS FOR BUYING A CO-OP IN MANHATTAN
Last month Warburg Realty President Frederick Peters wrote two wonderfully informative pieces on New York co-ops: “Why Co-ops Work” http://www.warburgrealty.com/blog/?p=600, which discusses the merits of co-op living and “Fit For the Board” http://www.warburgrealty.com/blog/?p=603, a helpful primer on navigating the co-op board package process. As a broker who works with both buyers and sellers, I thought I might add to the conversation with some tips to think about as you embark on the search for the co-op of your dreams.
1. Use one broker. While it may seem at times that every other person one meets in the city is a real estate broker, the truth of the matter is, the community of the better Manhattan brokers is actually quite small and very tightly knit. Most of us know each other and contrary to the competitive, cutthroat and catty stereotype, we’re actually a pretty collegial group, loyal to one another, respectful of each other’s clients and careful not to step on toes. Talk to friends and colleagues, do your homework to find a reputable broker you feel comfortable with, and stay loyal. News about clients using multiple brokers spreads quickly and causes (i) embarrassment to brokers who make appointments for clients who may have already seen the property with another broker and (ii) confusion, awkwardness and ill-will if you submit an offer on an apartment you first saw with another broker. In 2007, to make sure WE are as highly trained as possible, the Real Estate Board of New York—REBNY— created the New York Residential Specialist designation which recognizes leading residential real estate brokers in New York City. It’s REBNY’s highest professional credential in residential sales and identifies those qualified Associate Brokers who have successfully completed an advanced graduate program designed specifically for the nuances of the New York City market. I am proud to be an NYRS broker. For more information about this program, see https://members.rebny.com/nyrs_home.jsp
2. Make a good first impression. You should treat your viewing appointment like an interview. However gracious and lovely the listing broker is, make no mistake, he or she is observing you, what you wear, your manners and reporting back to the seller. Listing brokers often root for certain prospective buyers they like and the more they like you — and your broker — the better your chances. Arrive on time. Don’t wear athletic clothing, don’t bring your Starbucks latte or Diet Coke, don’t show up on the phone and make everyone a hostage to your phone call in the lobby and, if humanly possible, try not to take a call during the showing and, if you do, be apologetic and make it short. And remember it’s not only the broker you’re trying to impress. That person in the lobby or in the elevator for all you know is on the board. Finally, even if the apartment is an absolute hideosity, don’t walk in, take two steps, say “No” and just turn around. Find something nice to comment on and just say something to the effect of “I’m afraid it just doesn’t work for us.” You never know, that same broker’s next listing may be for the apartment you do bid on and you want her to remember you favorably.
3. Admit you like the apartment. There’s a widely-held belief that one should never appear to like an apartment because somehow if the sellers know you want it, they will think you will pay up for it. In my experience, nothing could be further from the truth! Sellers want to sell their apartment to people who love the apartment as much as they do. It is their home and holds an enormous sentimental attachment for them. I’ve had clients willing to entertain a lower offer because they knew the prospective buyers really loved their apartment and they just wanted to sell it to them for purely emotional reasons (over the person who comes across as purely focused on the price per square foot valuation). If you’re walking around finding fault with the apartment, you will come across as someone who’s difficult to deal with and possibly an undesirable neighbor. Particularly in a multiple bid situation, being perceived as rude, negative or difficult will really put you at an enormous disadvantage. Likability counts. It’s not called a “co-operative” for nothing.
4. Be discreet. Do not talk about the apartment until you get outside the building and are out of earshot of the doorman. Better still, walk to the next corner before you enter into a discussion about it.
5. Be nice to the doorman and building staff. Doormen and building staff will frequently speak to residents and brokers about prospective buyers, particularly if their impression is a negative one.
6. Be prepared. I make every effort to have my clients have all their ducks in a row before we submit an offer. It shows you have your act together, are ready to go, are represented by a competent broker and conveys the message to the sellers that you will be easy to do a deal with. If you can, complete and sign the REBNY Financial Statement required by nearly all co-ops and get a mortgage pre-approval letter so that you can submit them with your offer. Oh, and that irksome form that your broker is asking you to sign? She’s not pulling a fast one on you. Effective January 1, 2011, all sellers and buyers must sign the “NYS Disclosure Form for Both Buyers and Sellers” which simply states the terms of the fiduciary responsibilities your agent has to you. The NYS Disclosure form is not a contract. Its only objective is to ensure the buyer and seller know their rights in real estate transactions. (See link http://www.dos.state.ny.us/forms/licensing/1736-a.pdf). The NYS Disclosure Form needs to be signed in conjunction with sales exclusive signings, at the latest after the first day of showing property for a buyer, and anytime that relationship may change. Don’t let it scare you. It doesn’t obligate you to only use that agent, has nothing to do with who pays commission, and is simply a disclosure that must be acknowledged by your signature.
7. Take the board package seriously. You need to treat the board package with the same level of seriousness as you would your child’s college application. Ask for more reference letters than you need – more than likely someone will let you down. Impress upon your reference writers the importance of a well- written, anecdotal letter which should be about a page in length. The ideal writer is someone who knows you well and lives in a co-op in a similar building in the neighborhood. If they serve on their board, even better. The letter should be addressed to the board, make mention of where they live, whether they serve or served on their board and include a phone number. Importantly, writers should also be reminded NOT to send the letters to the board but to deliver them to the applicant or their broker.
8. Google yourself. You can be certain the coop board will, as will the other broker. Make sure your Facebook page does not contain anything inappropriate, politically charged or incendiary. And while you’re at it you would be wise to Google your children too and have a talk with them about the importance of creating a good impression.
9. Get a pedicure. You laugh but you will be surprised by the number of times you will be asked to take off your shoes before entering apartments and you don’t want to be taken off guard. So put your best foot forward and head to the nail salon or at least invest in a good pair of socks!
10. Don’t be presumptuous. I always tell my clients to tell as few people as possible (and preferably no one) about an accepted offer. Don’t ask to visit the apartment multiple times with your decorator and family members. Don’t even think of calling the managing agent to inquire about the status of the package. And, whatever you do, definitely don’t act like board approval is a foregone conclusion. If you hired a great broker and submitted the best board package you could, more than likely things will work out. But anything can happen. This is New York.
Like most worth things worth doing, buying a co-op in Manhattan takes some effort. It’s your broker’s job to guide you through the process and make it as painless as possible. In addition to the obvious tax and appreciation benefits, the psychic benefits of owning one’s home are inestimable. And someday soon, you will be congratulating yourself as you enjoy your new home in the world’s most exciting city.