Co-op boards screw sellers, selves over price

(Flickr photo by striatic)

It is not a new phenomenon, but Jhonna Robledo of New York magazine has uncovered some troubling information about co-op boards.

The boards seem — there is no way of knowing for sure — to be turning down buyers at a growing rate if they think an apartment’s price is too low.  Says Robledo (who is a member of my REwrite group for real estate bloggers in the Big Apple):

Nobody keeps a count of board rejections, but data do show a remarkable year-over-year uptick in the number of broken contracts for co-op deals, many of which are likely to be board turndowns.

In Manhattan, she reports in the magazine, 53 contracts fell apart in September, up 70 percent from August — the highest monthly total this year and the third-highest in two years, according to Streeteasy.  Among other sources Robledo plumbed were lawyers and brokers.

Brian Tracz says one the lawyer’s Queens clients was candidly told that a price “floor” hadn’t been met. Another applicant wasn’t interviewed until he offered to pay more than his initial offer — and then was approved to purchase the unit.

“The implication,” Tracz is quoted as saying, “was clear.”

Co-op boards that act so cavalierly with the assets of their neighbors also demonstrate how short-sighted they are.

Can they know that prices won’t continue to slope downward as the ranks of disgruntled owners inevitably swells in units that are languishing on the market?

Tomorrow:  If it quacks like a kitchen. . .

To take your own bite out of the Big Apple, start your home search here.

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Malcolm Carter
Licensed Associate Real Estate Broker
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Charles Rutenberg Realty
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