Real estate is a nebulous industry, filled with scams, screwballs, and the occasional sweet deal. That’s why we’ve asked a locally born-and-bred real estate lawyer to make sense of it all. Sheepshead Bay bankruptcy and real estate lawyer Daniel Gershburg will contribute a regular column about the real estate scene. His first piece gives buyers tips for getting into that coveted Sheepshead Bay apartment co-op, a segment of real estate that represents a huge chunk of sales in the neighborhood.
So you want to buy a co-op in Sheepshead Bay? But you have questions that your real estate broker refuses to, doesn’t, or can’t answer. What do you do?
Well, what I can tell you is that when you buy a co-op in Sheepshead Bay, or anywhere for that matter, the first thing you should do is do some internet research on the address. You can try looking on Trulia.com. But my search would be more general. There are tons of forums online discussing issues with co-ops. From aggrieved co-op owners complaining about poor management to lawsuits against corporations, you can find everything. But that’s just the start. You should also ask your real estate broker about whether they have had past clients in the building and if they could put you in touch with any so you can ask them about their experiences. Is this out of the box? Absolutely. But it works better than many other things out there. Do your research before you purchase a co-op in Sheepshead Bay.
But let’s take this a step further. Say I am purchasing a co-op in Sheepshead Bay. I’ve done my research, spoken to people in the building, and now I have my interview. What can I expect?
Anything. That’s right, anything. A co-op is a corporation. The board of directors are therefore making a business judgment as to whether or not you “fit in” financially and otherwise with the building. Now unless you have a habit of fighting pit bulls in your apartment, you’ll likely be fine so long as your financials are okay. Having said that, if you are rejected for one reason or another, the co-op technically does not have to disclose the reason you were rejected, other than saying, “Sorry you can’t live in this co-op in Sheepshead Bay, try Brighton Beach.” Yes, yes you can try and sue and all those good things, but it will cost you money and will usually not leave you in a better position. The best way to avoid this embarrassment is to literally be as prepared as possible. Each co-op has a “package” which has to be prepared including your financials, references, et cetera. Make sure you go over this diligently before the meeting and everything is complete. Make sure you look prepared for the meeting.
When you buy a co-op in Sheepshead Bay, when will the closing take place?
This is one of those “Why is the sky blue?” questions. There are so many variables involved here. Typically a closing for a co-op in Sheepshead Bay will take place immediately after the co-op approves the individual and the bank clears financing. There are, however, many hurdles and obstacles that your attorney will have to navigate for you. Sometimes the bank is late, or they haven’t apprised you of issues they have, which delays financing. Sometimes the board won’t meet for several months, thereby delaying the closing and causing you to make sure your rate for your loan is locked with the bank. Sometimes the management company’s attorney will request a delay in closing to make it occur at a convenient time for them. There are literally multiple variations that could delay your closing, so make sure you choose an experienced real estate lawyer in Brooklyn to help you through this. It’s not a sales pitch, it’s reality. Just ask anyone who has gone through the process.
Daniel Gershburg Esq., is a real estate and bankruptcy attorney with offices in Sheepshead Bay and Manhattan. The practice was specifically set up to change the way people view attorneys, by incorporating radical ideas like calling people back quickly, returning emails, giving clients ’round the clock access to their cases and charging low fees. For more information please visit Brooklyn Real Estate Attorney Daniel Gershburg‘s website.
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Four years ago, The New York Times printed an article, Help Is Available on the Internet. It is worth checking out if you are thinking of buying or renting.
Always visit the area at night. What you love at 3pm may not be so wonderful at 10pm.
Excellent article Mr.Gershburg but let me introduce a few other variables. The buyer should always look at the sales comps before making an offer. These numbers are available on a number of sites but the most comprehensive and free one is from NYC Dept of Finance: http://www.nyc.gov/html/dof/html/property/property_val_sales.shtml
Check out if the building has any outstanding building/housing violations.
Another issue with co-ops is often related to financing. Mortgages sometimes can be tricky to obtain. My first step in regards to finance is to go to propertyshark.com and see where other people who purchased apartments in this particular building go their mortages (this information is free as well). Generally speaking potential buyers should be aware on what the maintanance payments are, how often they have been raised, fully understand operating expenses of the building, know if the building charges a flip tax on purchases and sales and know whether the building allows sublets. Even if you never plan to sublet the apartment, the sublet policy greatly affects the value of an apartment.
Once the apartment is purchased, conducting the renovations can be an issue as well. I always recommend potential buyers to do a preemptive check. Before purchasing the apartment, get in touch with the building management and ask them what their requirements are. If the management puts enough hurdles, I feel that it is enough of a reason to walk away from that particular apartment.
tyvm, Dan. An educated consumer is the best kind.
[...] our wonderful columnist, Daniel Gershburg. Since joining us in November, Daniel has written about Sheepshead Bay co-ops, ways to avoid fraud, money-saving tips, and a possible new real estate bubble on the [...]
Buying a coop in New York is a bad financial decision. First, most of them have “flip tax” that is ridiculous idea on its own and way too high usually.
Secondly, you need board approval if you want to as much as fart in your own appartment, not to mention do renovations.
Third, the boards are either corrupt or incompetent or both. The board members disregard the laws and do not provide audited financial statements to the shareholders. A lot of them are “on the take” and take bribes from vendors or from shareholders who want to break coop rules. They would hire their incompetent relatives to service the building or do accounting and overpay them while raising maintenance and addind assessments.
Boards always act in the board members financial interests against the interests of the shareholders.
So save your money and buy a house