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It's still a buyer's market, and UrbanDigs argues this week that "[c]o-ops that have a history of being tight & nitpicky should consider loosening up a bit; especially if the building just finished multiple assessments for major capital improvements and is facing a depleted reserve fund."
Some come-hither moves said to excite a broader pool of potential suitors include:
- Liberalizing the subletting policy: Live there for two years, get to sublet for two years
- Allowing pied a terres
- Permitting guarantors, co-purchasers, or parents buying for their children
- Beefing up the reserve fund – “buyers love reserve funds!” —by refinancing the mortgage at a lower rate and taking out some equity & deposting into reserves for future capital improvements
- Reducing large down-payment requirements –eg reduce a 40% requirement to 30 or 35%.--while maintaining tight requirements for employment situation, salary, debt/income ratio and liquid assets leftover after closing.
- Looking into alternate revenue streams (eg fees from sublets) to minimize maintenance increases. The lower the maintenance, the more attentive the buyer.
Still, several commenters protested that changes like these stand little chance of being implemented in most buildings:
- "The problem with these suggestions to boards lies in boards.... While they SHOULD want to improve the situation of the building, to get there implies changing the rules, which would also increase the pace of change in the building itself. AND MOST PEOPLE DISLIKE CHANGE! The people who make up boards more than most."
- "There's no real upside for co-op board members to push for a change in the standards for admitting new shareholders, allowing pied a terres, etc. because (in addition to the fact that people dislike change), because if it doesn't work out, they will just get hammered."
- "Shareholders often vote against things which may make fiscal sense but don't appeal to them personally, myself included - I am opposed to subletting despite the potential benefits. Getting shareholders to unite behind something is like trying to herd cats - its impossible - especially in NYC where 15% of the population is outright nuts."
Related posts:
Killing deals to protect property values is risky business
4 neat ways to use an investigative lawyer in a co-op or condo
1 in 10 co-op sales inflated to pass the board
Approval, schmoovel! Renovation perks for board members
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