What Coops Boards Can Do To Increase Sales- VIDEO

In a challenging real estate market, will coop boards figure out ways to loosen their policies to accommodate qualified buyers who are currently staying away?

What do I mean?

Just that buyers are avoiding anything that smells risky.

High monthlies, high bar to pass over, challenges to renovation, etc.

While there is a very sensible desire to protect value for a building’s shareholders, buyers remain wary of tough coop boards.

While foreclosures are almost non-existent in New York City in part because of strict policies, sales at the high end in some buildings can be non-existent as a result.

What I mean is that buildings that require all-cash, with 3-4x purchase price in liquid assets function completely outside of the realm of reality.

And most buyers, unfortunately, do not.

High earners don’t want to be bothered by these rules in many cases.

Think about your life, everything is on demand: Netflix, Amazon, Internet Delivery, etc.

Then, reinsert the “old world” of the cooperative purchase.

I would argue that in many ways these rules keep community together and are a throwback to quieter, more genteel days.

But mostly people are annoyed by it.

Coops can permit a higher amount of mortgage financing allowed.

Perhaps allow 70 or 75% instead of 50%, or less.

Given the purchase prices, I don’t see allowing 70-75% LTV mortgages to be risky.

Also, coops can be slightly more lenient about the assets after closing that buyers need.

Instead of requiring multiples of the purchase price in liquid assets after closing, this could be reduced.

Most importantly, boards can be aware of changes in market values, and allow sales to take place, even if they are at prices that are lower than expected.

Rejecting buyers when the market is not cooperating, isn’t very

cooperative, is it?

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