Buyer 101: Coops-Sponsor Please…. or Not?

Buyer 101: Coops-Sponsor Please…. or Not?

Ok you did all your research, COOP vs. Condo, and decided a Coop apartment is for you!

You also have the cash credit and income to buy at a certain price. So all you have to do is find an apartment in an area you find comfortable.

Is it that easy? No quite that easy.

Board Approval Units

In general, most Coops utilize the board approval process. To put it simple, the board’s job is to screen potential Buyers. In some cases having a board is good in other cases it is bad. You can pass the Board very easily or you could be rejected for financial reasons and/or personal conflicts with the board members.

Pros-Screen tenants, more units are available because they are resales so more selections, a good board usually selects good neighbors

Cons-A difficult board may reject you even if your qualified, are sometimes not renovated by owners

Sponsor Units

Some people find the Board approval process unpleasant. So those people may purse what we call Sponsor Units. These units do not have Board Approval Process. The units are being sold for the 1^st time by the development that sponsored the conversion from rentals to a Cooperative. Typically, if you get a mortgage you get the apartment. That sounds great? It is a definite option to the Board Approval Process.

Pros-Less picky, you get the mortgage you get the unit, sponsor usually does complete renovation.

Cons- some back will not lend depending on % of owned units, sponsor is less selection than board

View My Coop Blog Below and Upcoming Blogs

Buyer 101: COOPS -Who's Your Foe, The Board or The Banks?

Upcoming blogs

"the pros and cons of the board approval process"
"Coops vs. Condo"

Milton D. Johnson
Licensed Associate Real Estate Broker
www.milton4realestate123.com
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