secret knowledge to buying a co-op in New York (not Manhattan)?
September 7, 2018 2:25 PM   Subscribe

With some work-related changes (yay!) my partner and I may be able to afford to buy at the low end of the co-op market in New York, having rented for the last 8 years (we're mostly looking at northern Queens). Think listing price $200-$250K, maintenance usually around $300-500/mo. It seems straightforward, but is there some secret info I'm missing that will make this impossible?

We're both 31, I'm healthily self-employed and partner is in a white collar job with OK but not lawyer-money pay. If we're looking at a studio co-op listed for, say, $220,000, and we can afford the maintenance and mortgage and the $44,000 down payment and closing costs, are we going to be able to get that, or a similar, apartment?

Everyone I know rents or bought somewhere much more expensive with family money, so I hear vague things about not getting approved by the co-op board or needing to put a much higher percentage down or making a way over-listing offer, but nothing specific. Our parents are all homeowners, but in the suburbs of New England so don't have good advice.

Can anyone with experience doing something like this (again, we're not looking in a fashionable neighborhood or Manhattan, think Woodside, Jackson Heights, Elmhurst) chime in with advice or first-hand stories? Do we need a lot more money than we think? Do we need to mentally add 30% to each listing's price? Should we just plan on renting until we can afford an $800K apartment or get driven out of New York entirely?
posted by zingiberene to Work & Money (6 answers total) 6 users marked this as a favorite
The co-op will require some amount of liquid funds post-closing, as much as two years' mortgage and maintenance. (Retirement funds won't count.) It's very irritating because there's no fixed requirement, and the ads almost never specify how much.
posted by praemunire at 2:31 PM on September 7, 2018 [3 favorites]

I have a ticket to this workshop at the brooklyn brainery about buying your first home in NYC that I can't use on September 18th. Looks like it is sold out but if you Memail me you can have my spot.
IIRC brooklyn brainery runs this workshop monthly-ish
posted by wowenthusiast at 2:36 PM on September 7, 2018 [2 favorites]

The co-op may require substantial liquid funds post closing, but at the low end of the market may not. I'm in a co-op at the fairly low end of the market by NYC standards (but pricier than what you're looking at), and we pretty much just require stable employment at an income sufficient to pay the mortgage and maintenance comfortably. Depends on your board. Your real estate agent will likely have some prior relationship with the buildings you're looking at, and will be able to give you insight into what the board will want.
posted by LizardBreath at 3:48 PM on September 7, 2018 [1 favorite]

It is my NYC co-op experience that each and every board is different in what it wants, what it will settle for and who it wants. You will find some boards that want liquid assets and some that prefer duel income cash flow. While we all know it is illegal and discriminatory to deny people based on race, on gender, on sexual preference, etc. I have seen friends with adequate cash reserves, that met the criteria the broker laid out from previous sales in the building, get turned down for financial reasons but were more likely because they were an openly gay couple. Rather than fight, they chose to take the attitude that did not want to live where they are not wanted.

I have seen boards approve of buyers who are less qualified than others because they wanted the current owner out of the building. I have seen boards not approve a highly qualified buyer because they were fighting with the current owner and were jacking them.

To me, the most important part of the process is getting a broker with tons of experience in the area marshaling bids through the co-op board approval. Brokers that know the personalities of the board members and can tell you what to say and what not to say in your interview.

I also suspect, but do not KNOW, that the nature of your mortgage can play an important role. If you are taking a long-term fixed rate mortgage versus going for a gimmick mortgage with low initial rates that can and will change in a few years, that might be a concern.

I think you should start shopping for the right apartment and when you find it, make a bid. If that bid is accepted, don't celebrate until after the final board approval. It is worth it to me to just try. Life is too short to fear the coop board. Generally, it is them not you. If you find there is a pattern to rejections, it is you, not them, but most brokers won't waste their time showing you places you don't have a good chance of passing.
posted by AugustWest at 5:13 PM on September 7, 2018 [1 favorite]

Seconding getting a real estate agent who knows the neighborhood and is willing to hold your hand through your first time buying. You're not describing craziness and NYC real estate stories always trend towards the, "[family member] gave me the full down and then some and now my monthly payment is just the maintenance" because no one wants to discuss real talk about how the homebuying process is designed to make you feel judged: by yourself, by others, by your broker, by the board.

It *is* very important to flag if your agent ever tries to push you out of your already established budget, and if they ignore your calls/emails/texts for help (and by ignore, I just mean take longer than half a business day to respond to a simple question). If they tell you they're going to do something, they should give you update on if they've done and the ball's not in their court, if they haven't done it yet, and why. I think it is tempting for some brokers to want to lock down a deal like yours SUPER fast, so never move faster than you are comfortable -- ask for advice from friends, for gut checks from family, before you make a decision.

I was on my building's board that sold comparable studio units in NYC and we looked for safe financials, a sense of the people buying it, and why they loved the neighborhood. If a Board doesn't want you, then you may have run into a very persnickety Board or a very persnickety building. Not every Board/Building is like that. Everyone's just trying to maintain a nice home and neighbor group. Best of luck to you and yours!
posted by vacuumsealed at 8:43 AM on September 9, 2018

thanks everyone who commented, this is super helpful...I'll update if we manage to get a place!
posted by zingiberene at 8:17 AM on September 10, 2018

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