Win7dow, Home Buyer in Valley Stream, NY

I was researching a cooperative apartment in Bellerose, Queens and I read that the flip tax is three times

Asked by Win7dow, Valley Stream, NY Thu Jul 23, 2009

the monthly maintenance. In addition, I found that the coop asks for one-fourth the sellers profit. Is this a deterrent for sellers to sell their property shares? How does a coop expected to thrive if it has these kinds of rules?
I guess cooperatives are trying any opportunity to make a profit.

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Answers

2
Hi,

Each co-op board sets a different set of standards for their respective cooperative corporation and they do differ from one to the other. When the standards are very stringent, then it is not so much a deterrent for sellers to sell their property shares, but rather a deterrent for buyers to buy! It has the same effect - the unit either takes a very long time to sell or does not sell until the price is sufficiently low to entice a buyer under these regulations.

In the current real estate market and general economy, most co-op boards have voted to make their rules more strict. Since there might be a number of prospective shareholders who may lose their jobs or ultimately wind up in foreclosure in this market, the co-op boards are attempting to assure that current shareholders sell to people who will be able to pay the maintenance in an on-going fashion. When considering a co-op - the buyer must consider the fact that if enough shareholders default on their maintenance or on the mortgage (and are foreclosed upon) then the remaining shareholders will have to make up the difference in the overall monies so that the underlying mortgage and all communal services (the underlying mortgage on the whole property, lawn maintenance, snow removal, heat, water, etc.) can continue to be paid, thereby preventing the entire property from being foreclosed upon and effectively evicting those shareholders who have been paying their maintenance on time!

If I can answer any other questions an/or show you any co-ops and/or houses, please contact me directly by phone at (516)410-3594 or by email at Arlynn@ArlynnPalmer.com.

In the meantime, please visit my website at http://www.ArlynnPalmer.com where you will find FREE Buyer Reports, FREE School and Neighborhood Reports, my Monthly Newsletter and other valuable real estate information.

Regards,
Arlynn

Arlynn B. Palmer, ESQ, SRES, CBR, CMS, CNS
Licensed Associate Broker, REALTOR
Coldwell Banker Claire Sobel\
(516)410-3594
Arlynn@ArlynnPalmer.com
Web Reference: http://www.ArlynnPalmer.com
1 vote Thank Flag Link Thu Jul 23, 2009
Each complex is different as far as flip tax and there are some with no flip tax at all.

Anna
0 votes Thank Flag Link Fri Jul 31, 2009
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