Home Buying in Bensonhurst>Question Details

Stephen, Home Buyer in Forest Hills, NY

How do you quantify the value of a coop apartment?

Asked by Stephen, Forest Hills, NY Mon Nov 12, 2012

I'm looking at a coop in the 11214 area code. The coop is listed as having square footage of 1,100 square feet. When I performed actual measurements I come to an estimate 830 square feet. I'll assume the difference is for common areas. Now I've read that with coops of course you'll only buying shares of the coop and not any physical area. 1) In which case is there any way to determine the value of the shares. 2) Would the amount of shares equate to actual square feet in the building and hence the 1,100 feet? 3) Are all coops in brooklyn listed in similar manner (i.e. if i make a comparison base on square feet in trulia, am i looking at oranges vs oranges or oranges vs apples?)?

Thanks.

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Hello, I have been selling co-ops for seven years and usually the larger the co-op and where it's positioned in the building will give you more shares. The shares are not not publicly owned like buying into a company on in the stock market. The public stock market can decline and it will it effect your shares. The only thing that effects the value is the real estate market and the maintenance and financial stability of your cooperative.

Your units square footage does not include common areas used by others, but it will include the terrace or other outside space that belongs only to the unit. But the square footage being so significantly lower than stated is a concern as far as the price and you should have a Realtor look into recent sales for this type of unit and shares.

I hope this helped you.
0 votes Thank Flag Link Tue Dec 4, 2012
Stephen, the square footage issue is frequently a sticking point and can be argued, discussed and negotiated many different ways. Long story short, if you love the apartment and want to live there, I suggest you proceed with the purchase. Pricing can best be discussed and compared via comparable units that have sold and closed in the same building or the immediate area. It is important to compare your unit with one on the same floor, with simlar exposures, amenities, etc.
you can e-mail me at gsplendore@halstead.com and I can discuss this with you further. I live in Bay Ridge and my office is in Brooklyn Heights so I am all over Brooklyn daily. Good luck!
0 votes Thank Flag Link Mon Dec 3, 2012
Dear Stephen:

Many co-op apartments in Brooklyn do not have floor plans, hence the square footage is usually estimated. Some real estate agents are better at estimating than others and some actually measure the apartment like you did. The bottom line is that no matter how you look at it or measure it, the apartment you see is the apartment you are buying.

It is very hard to determine value of shares of stock with a co-op. When people purchase a co-op it is not based on a per share price but rather the market value of all the shares on a particular unit at once. The value changes on a daily basis just like regular stocks but the price is not fixed by the Dow Jones. The price is set based on what a buyer is willing to pay for the unit.

If you need to figure out a per share price, simply divide the sales price by the number of shares on each unit in the building and average it out. Still this would only be an average, not an actual equation to determine the value of the apartment overall. You have to look at comparable sales within the building to get an average selling price and then divide by the shares to get the average value of the shares at this particular time.

Quite often the square foot listed on web sites like Trulia is an estimate, so you have to be careful. If you are concerned about square foot value, make sure you physically measure every unit you are planning on making an offer on just to be sure.

There is no universal equation for number of shares and sale price because the number of shares attached to a building or apartment varies from building to building. If you look at all the units in one particular building you will see that the apartments with more square footage have more shares of stock and higher maintenance amounts. However, sometimes there are other factors that can have an effect on the number of shares and/or maintenance amounts such as the floor number and exposure or views.

In the end you just have to determine what your budget is, look at everything that fits within your budget and then hope that one or more of those is big enough and/or good enough that you want to buy it. If I can be of further assistance, please let me know. Good luck!

Sincerely,
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/ Cell: (917) 805-0783
Email: MitchellSFeldman@aol.com
0 votes Thank Flag Link Mon Nov 12, 2012
Hello Stephen. As to question #1) you should check with the Co-op board. They can answer that question for you. 2) The square footage has no relevance with relation to the asking price. 3) Every co-op has a Co-op board, therefore rules such as listing and resale requirements may be different. You should inquire with the Co-op boards.

I hope this answered your question! If you have any further questions, please feel free to contact me by the ways below.

Wishing you all the best,


De Vonte Williamson
Licensed Real Estate Salesperson
Proudly Serving Long Island
Coldwell Banker Residential
Direct:(631)638-6193
Mobile: (631)384-3695
http://cbmoves.com/DeVonte.Williamson
http://devontesellsny.wordpress.com/
DeVonte.Williamson@cbmoves.com
0 votes Thank Flag Link Mon Nov 12, 2012
When you are buying a co-op you are buying stock in the company that owns the building, so yes you are buying part of the common area, you are buying a part of the whole building, but in stock, just like Wall St except that it is not publicly traded stock!
Co-Ops are almost never sold by square feet and you cannot compare one buildings price to another, it all depends on what is included in the stock, how well managed, maintained, financed etc the building is, just the same as comparing one stock to another on Wall St.
Your best comps are stock prices within the building, bare in mind not all 1BR's in a building will have the same amount of stock, the listing broker should be able to get the stock prices of recent sales and comparable current listings. Or a good local broker that specializes in that area could help you.
I hope this is helful, good luck.
Kathryn Lilly
0 votes Thank Flag Link Mon Nov 12, 2012
Rather than relying solely on online information, consider working with an agent of your own. Keep in mind that square footage costs, don't account for location and other considerations; therefore, it's really in your best interest to also review closed recently sold similar properties in the immediate area, and their final sales price. As for actual measuraments--they can vary as there are multiple ways of measuring....
0 votes Thank Flag Link Mon Nov 12, 2012
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