Author Topic: Board Buyer Rejections  (Read 1188 times)

Offline am315

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Board Buyer Rejections
« on: November 07, 2018, 10:05:59 AM »
'm in the process of trying to sell my late father's one-bedroom prewar apartment and run into a big roadblock. The board has rejected two well qualified buyers. One of the buyers wanted to do an all cash deal and had plenty of assets. The second was a tenured professor with a big financial cushion. Both were rejected without an interview. My broker contacted the board president to get some guidance on moving forward, to no avail. (He didn't ask the reason for the rejections since we know they don't have to give one.) Our only guess is they don't approve of the price. Indeed it's lower than comps in the building — but not the nabe — because it's in need of a new bathroom at the least and an updated kitchen. That said, it's not a complete wreck. I put in about $15K to restore the floors to their original condition and had a top notch replastering and painting job done, and put in new fixtures. Anyhow, I'd like to consult a lawyer to determine next steps . Anyone have recs? Any advice also welcome.

Offline JH3525

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Re: Board Buyer Rejections
« Reply #1 on: November 07, 2018, 10:34:32 AM »
Make the price acceptable to the Board and provide the buyer with Cash at the closing (a separate agreement) that will compensate the buyer for the high price.    Discuss with your Attorney who I'm surprised never mentioned this option.  Even if the Board is aware of what you're doing they won't care as long as the closing price is acceptable and is compatible to previous sales.   

If the buyer is financing and the selling price is above the appraisal the bank may insist on a higher down payment which the buyer will have with the Cash at the closing. 

Offline am315

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Re: Board Buyer Rejections
« Reply #2 on: November 07, 2018, 12:42:17 PM »
Thanks...Jh. My lawyer did mention that idea. But it's more complicated as it's an estate sale. Also this tact has not worked in the past with the board.

Offline rhydewithdis

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Re: Board Buyer Rejections
« Reply #3 on: November 07, 2018, 01:59:03 PM »
Thanks...Jh. My lawyer did mention that idea. But it's more complicated as it's an estate sale. Also this tact has not worked in the past with the board.

If you can afford to do that, why not just get the necessary renovations done so you can command a price that the board will find acceptable?

Offline am315

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Re: Board Buyer Rejections
« Reply #4 on: November 07, 2018, 02:57:22 PM »
Main reason I don't want to renovate is the board is obviously difficult to work with and they would have to approve the plans and I'd prefer not to keep doing business with them. Also the market is slowing -- and it's a buyer's market right now -- and I don't want to put money in that I may not get out.


Offline Matt

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Re: Board Buyer Rejections
« Reply #5 on: November 07, 2018, 07:48:46 PM »
This sounds like the building I live in. Where in the neighborhood is it?

Also, it's hard to give advice when the board won't disclose what the issue is. These sound like qualified buyers. I also would not want to go through the process of renovating to sell. There's no guarantee you'd get that money back or that the renovations would appeal to buyers.

Offline lalochezia

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Re: Board Buyer Rejections
« Reply #6 on: November 07, 2018, 07:52:45 PM »
This sounds like the building I live in. Where in the neighborhood is it?

Also, it's hard to give advice when the board won't disclose what the issue is. These sound like qualified buyers. I also would not want to go through the process of renovating to sell. There's no guarantee you'd get that money back or that the renovations would appeal to buyers.

Can you find other successful sellers from your building and ask them for advice?

Is there someone with "an in" on the board who you trust to inquire discreetly with the board?


Offline agentarmen

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Re: Board Buyer Rejections
« Reply #7 on: November 08, 2018, 11:45:27 AM »
There are several layers of issues in this scenario unfortunately when addressing price. I am going to address price in this comment with the assumption that the estate has been properly probated, lean wavers were filed and buyer was well screened and qualified.

1. there is already a listing history of list price, which will need to be raised with same public visibility and attract new buyer accordingly. This is more important when there is a mortgage lender involved.

2. if the buyer is reliant on a mortgage, cash back at closing will not be possible for a whole slew of reasons. Also note that bank appraiser will likely note recent listing price history.

3. if buyer is able to purchase all cash without a mortgage, careful attention must be paid to buyer profile to make sure it's not an investor intending a flip. Also remember, all cash purchase does not exempt a buyer from having income, reserves, good credit and interview well :)

We recently dealt with a property that was listed by various brokerages for three years and had several turn downs. We are the most recent brokers hired by the seller. We made some minor suggestions and put the property in contract after raising price by over 140k WITHOUT concessions. Turned out the market could bare a higher price. It's difficult to zero in on reasons why a sale may face ongoing rejections, but it is my belief is that it's often a combination of factors, some can be very minor.

It is important to understand, that the corporation, selling shareholder and the buyer must be satisfied for a coop deal to take shape and make it to the table.
Armen Meschian
Licensed Associate Real Estate Broker

CORE
673 Madison Avenue
New York, NY 10065
t:     212-612-9694
c:     917-848-6928
f:     212-612-9650
am@corenyc.com

http://www.JacksonHeightsListings.com

Offline am315

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Re: Board Buyer Rejections
« Reply #8 on: November 09, 2018, 09:07:41 AM »
Thanks Armen --

I was thinking of bringing in another agent for this listing but I don't really want to totally let go on the current one as my sense is they've worked hard.

Is it possible to co-broke the listing rather than having an exclusive?

Offline carrefour_ny

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Re: Board Buyer Rejections
« Reply #9 on: November 09, 2018, 10:15:17 AM »
That's crappy situation to be in. I get that the board is difficult and that they have no legal requirement to provide a reason, but I'm wondering if you can ask someone you know, not in a confrontational way, but just to understand what's giving them pause so you can correct it.

Good luck!

Offline agentarmen

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Re: Board Buyer Rejections
« Reply #10 on: November 09, 2018, 12:24:17 PM »
Thanks Armen --

I was thinking of bringing in another agent for this listing but I don't really want to totally let go on the current one as my sense is they've worked hard.

Is it possible to co-broke the listing rather than having an exclusive?

Hi am315,

Co-brokerage is a normal thing in our business, unless a seller has different arrangement with the listing brokerage. Or the brokerage has a blanket non-cobrokerage policy. But to MARKET and put our resources behind a listing that is under an exclusive with another firm, we would not be able to, nor want to do. At any one time we represent a sizable portfolio of our own exclusives as we specialize in seller representation. I would not recommend having multiple brokerages marketing a property as it waters down the relationship and lifts the responsibility and level of commitment from the brokers involved.

Property I mentioned as an example, had the exclusive completely expire, before we got involved with it.

One thing I want to point out, if the result of this process is that you actually end up selling at a higher price, the corporation is not going to be the main beneficiary of this :) , would not hurt to walk away with more net proceeds from the sale, do you agree ? :)

Armen Meschian
Licensed Associate Real Estate Broker

CORE
673 Madison Avenue
New York, NY 10065
t:     212-612-9694
c:     917-848-6928
f:     212-612-9650
am@corenyc.com

http://www.JacksonHeightsListings.com

Offline CaptainFlannel

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Re: Board Buyer Rejections
« Reply #11 on: November 11, 2018, 06:43:57 PM »
Wouldn't a stale listing that has been on the market for longer than it should have been be a detriment to other sellers or potential sellers? If that's the case, as I would imagine it is, isn't the board's refusal to provide feedback to a seller -- or a minimum price it will accept for sales -- financial malfeasance to shareholders interesting in selling property values?

Offline agentarmen

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Re: Board Buyer Rejections
« Reply #12 on: November 12, 2018, 02:01:06 PM »
Wouldn't a stale listing that has been on the market for longer than it should have been be a detriment to other sellers or potential sellers? If that's the case, as I would imagine it is, isn't the board's refusal to provide feedback to a seller -- or a minimum price it will accept for sales -- financial malfeasance to shareholders interesting in selling property values?

Sounds perfectly logical, since every person on the board is a future seller themselves also. Unfortunately by giving any specific reason boards would open the door to scrutiny and perhaps even legal consequences. As long as the board acts in the best benefit of the corporation (its shareholders), while not violating fair housing laws, they are doing their job as specified by the bilaws.   

Let me be clear, I am not downplaying the frustration of a board turn down, it's a hardship for all parties involved, such as loss of money, legal fees, time and in some case even creates housing problems for the buyers if they had to give notices to landlords etc... Every board member I've ever spoken to say they hate doing turn downs. It isn't something boards take lightly.
Armen Meschian
Licensed Associate Real Estate Broker

CORE
673 Madison Avenue
New York, NY 10065
t:     212-612-9694
c:     917-848-6928
f:     212-612-9650
am@corenyc.com

http://www.JacksonHeightsListings.com

Offline CaptainFlannel

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Re: Board Buyer Rejections
« Reply #13 on: November 18, 2018, 08:08:38 PM »
I know about boards that tell sellers the requirements necessary for a sale to be approved (and one of the benefits of a knowledgeable local realtor is he/she knows them to): minimum price the board will accept; debt to income ratio; income requirement; saving requirements post closing, etc. I've also heard of boards rejecting a buyer in spite of meeting all those requirements and telling the seller why. If the board wants a sale to occur, a board would be wise to give feedback so the seller stops accepting offers from folks who don't meet whatever secret requirement is being missed. Unless of course, the real reason is a violation of the Fair Housing Act.

It's worth remember that meeting the letter of the law doesn't mean a board (or any person or entity) is meeting standards of decency, common sense, or keeping all shareholders best interests at heart.

Jackson Heights Life

Re: Board Buyer Rejections
« Reply #13 on: November 18, 2018, 08:08:38 PM »