Before buying in New York city Cooperative Must Know
Buyers or Investors to buy an apartment in a co-op building are not easy for several reasons:
- Co-op purchaser approval takes weeks — if not months — and is a rigorous and notoriously difficult process. The majority of co-ops only approve buyers with New York employment, US income tax and excellent credit history in the US. The law does not require a co-op to provide an explanation for a potential buyer’s rejection.
- There are often restrictions on how much financing a buyer can use (for example, no more than a certain percentage of the unit price).
- Almost all co-ops restrict the right to sublet your apartment, which makes it unattractive to investors and many buyers. Usually, co-op apartments cannot be rented out at all or can be rented out for one or two years after a certain number of years of owner occupancy.
- Co-ops regulate your use of the apartment in many other ways, including having guests or performing renovations.
- When selling (or renting it out when allowed) a co-op, the next buyer or perspective tenant will be subject to co-op approval AND interview as well, which reduces the number of qualified buyers and therefore reduces the price of your investment.
- There are often additional “flip taxes” on the resale of a co-op to discourage speculators.
- Regardless if this is an ALL CASH or FINANCED purchase, full financial disclosure is required. This means perspective purchaser will have to provide tax returns, pay stubs, bank statements and other supporting documents to verify the assets and meet the requirement of the coop.
- Every co-op is different in regards to if they will allow the apartment to be used as a part time residence(pied a terre), allowing a parent to buy the apartment with or for their own child, allowing a guarantor or co-purchase structure to buy the apartment.
Co-op buildings are governed by Co-op Boards where there is a Board of Directors reviewing, evaluating and discussing each decision made by the co-op. These decisions range from coop policy, budget expenses, future renovation/repairs, surround neighborhood concerns, maintenance fee projection and approval of other shareholders’ sale or lease of the apartment just to name a few.
With all that being said, some of the most prestigious buildings in Manhattan New York are cooperatives with similiar of rules or format as mentioned above. Each cooperative building has its own house rules and policies, many buildings along Central Park on Central Park West and Fifth Avenue are cooperative buildings. If you are looking to live on one of these prestigious and desirable streets, you will more than likely be looking at cooperative residences for sale. There will be a few condominium buildings along Central Park West, Fifth Avenue, Park Avenue, but the supply is very limited.
If you are looking to buy an apartment in Manhattan New York and not sure where to start, I encourage to give us a call today at 917 837 8869 to strategically plan your search.