Home Buying in 11216>Question Details

Barrak Alzaid, Home Buyer in Crown Heights, Brook...

Trying to understand how to be an informed buyer. I'd like to know all the rules and regulations attached to my potential home, but it seems with

Asked by Barrak Alzaid, Crown Heights, Brooklyn, NY Sat May 1, 2010

condos the only way to do that is to sift through a 300-500 page offering plan. Is this the case with Coops in NY also?

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Hello, all I have to say is, you better believe it. The offering plan is the BIBLE of condos and co-ops and to many sellers sit it in the corner to collect dust or throw it away. As an agent that specializes in selling co-ops and condos I always stress to new buyers to read that book as much as possible and know all that is involved because you are now an investor not a renter.

As an investor you need to know details of the property and how it is run and all the regulations involved and the finanical status. It's also important to know things like selling policies and if the condo board must have first option to buy, renting policies, renovation policies, additional fees and so forth. Don't be one of those owners that walk around with no knowledge, educate yourself so you are empowered to make smart decision.

Rhonda Holt
Weichert Realtors, H.P Greenfield
Web Reference: http://www.RhondaHolt.com
0 votes Thank Flag Link Tue May 4, 2010
Barrak, you need a guide. You can no more become informed enough to understand the ramifications of everything in that document - and how that relates to other CoOps - than you can "become" informed enough to evaluate antiques at an auction at Christies.

I collaborated on writing a condominium declaration, and if I ever move back to NYC, it's going to be with the help of a knowledgeable local broker.
0 votes Thank Flag Link Sat May 1, 2010
Hello Barrak I have posted below a link to Brooklyn Real Estate Blog on things to consider before purchasing a Condo . I hope it is of some help
0 votes Thank Flag Link Sat May 1, 2010
Simply put, the traditional housing “co-op” involves the formation of a corporation for the purpose of acquiring title to a multi-unit building and, in turn, leasing individual units (apartments) to the shareholders of the corporation; whereas condominium ownership involves acquiring title to individual apartments or units. In fact, condominium ownership is, for most practical purposes, only one form of cooperative housing and, like the “co-op”, must include provisions for management and maintenance of the building(s) and “common” areas, usually dictated by an elected Board of Managers, in the case of a condominium, and a Board of Directors in the case of a “co-op”.
The “condo” advantage of individual unit ownership can be compared to the benefit of being able to “choose” your neighbors in a “co-op” setting, where the application process is very often quite selective. In the sale of a “condo”, once a price is agreed upon, the deal is done; whereas the “sale” of a “co-op” requires approval by the Board of Directors—which can be (and often is) withheld based upon arbitrary selection criteria—with no recourse to the buyer or seller if the “sale” is not approved.
“Co-op” ownership represents an “interest” (i.e. stock) in realty; “condo” ownership is actual ownership of realty. Price differences reflect demographic and geographic distinctions. You decide what’s best for you.
Once you have an accepted offer, your attorney can request all related documentation from management and review all of it with you--keep in mind each complex condo or co-op is different--- as far as rules, requirements, etc. Your attorney and or agent can best advise you as it relates to your specific situation.
0 votes Thank Flag Link Sat May 1, 2010
Your attorney should certainly show you the documents pertaining to the property to allow you to review as well. Oftentimes, they are lengthy and full of legal terms but you can ask to see it. Each property is different with respect to their rules and regulation so it's hard to generalize the answer....Good luck with you hunt and if I can be of further assistance, please contact me. Thanks.
0 votes Thank Flag Link Sat May 1, 2010
Both co-ops and condos have offering plans, although on a co-op it is often called a prospectus. Most of the 300-500 pages are standard information, and are more important in some ways when buying a new construction because it will tell you what costs you will pay that are normally seller expenses on a re-sale. if you are buying a co-op that has been around for a long time, many people don't even bother reviewing the an older prospectus because there have been changes over the years. There should be a table of contents in it, and you can look for the important things, like by laws and house rules. The more important thing is what the current financials look like. If you have a back-ground that allows you to understand the financials, you can look at them yourself. Sometimes, they won't give you these things until you make an offer that has been accepted. You may have to pay for the offering plans, so you might not want to do that for every apartment you look at.
0 votes Thank Flag Link Sat May 1, 2010
Thanks for your response.

I am actually already being represented but seeking further resources on these forums.

My follow up question is then, do the buyers ever have an opportunity to refer to the offering plan (is this the term for coops as well?)

What are the bylaws referred to with regards to coops and condos? Is it separate language? Are they both super long?
0 votes Thank Flag Link Sat May 1, 2010
Hi there.....Coops are shares in a corporation as opposed to Condos which is real estate....like buying a house. With coops, you find sponser sales (the builiding owner) or private sales (the resident of the co-op). Either way, your best bet is to have an attorney represent you who is familiar with these offering plans, etc. The attorney would review this document and the financials of the building to determine whether it is a good investment for you. Co-ops vary from building to building so it is important to find out all fees associated with the property.....flip tax, transfer tax, utilities included?, house rules, pets, carpeted floors, etc.

If I can be of further assistance, please do not hesitate to contact me at Madison Estates...718-645-1665 or 917-796-5891
0 votes Thank Flag Link Sat May 1, 2010
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