Selling a coop without a broker is not as difficult as agents in the city will have you believe.
Most home owners with the gusto to even try to sell their coop alone usually give up after listing it FSBO on Zillow for a few weeks.
Make sure you have the following handy:
Floor plan – if there’s already a floor plan of your unit online, make sure you have permission to use it. Often times the floor plan for a previous listing of your unit will belong to the listing broker and/or seller. It’s important to have a floor plan for your unit as 50% of buyers will not visit a property unless they’ve seen a floor plan.
If you feel awkward asking for permission or simply cannot find an existing floor plan for your home, schedule a visit with a draftsman to measure a new one for you right away.
Purchase application – this is the infamous “NYC coop board package purchase application” which all coop buyers will need to complete and submit to the coop board. Sometimes called an “apartment resale application,” this intensive request will typically require multiple copies of the entire board package to be mailed or couriered to the building management company. The building management company will then submit the board package to the coop board for review and approval. In coop sales with a traditional broker, the listing agent will typically review the board package before it gets submitted to the building management company.
The purchase application will typically also ask the buyer to submit federal income tax returns, W-2’s, multiple reference letters, a copy of the fully executed contract of sale, the mortgage commitment letter if the buyer is financing, copies of recent bank statements and pay stubs and signed copies of various disclosures (i.e. lead-based paint).
House rules – similar to the bylaws of a condominium, the house rules of a coop govern daily life within the coop. Expect to see rules about roof usage, acceptable noise levels, pet policy and use of common areas. Coop house rules are generally stricter than the bylaws of a condo given the greater degree of power that a coop board has versus a condo board.
NYC coop sublet policy – this is one of the most important documents you’ll need to have handy for selling a coop without a broker. Most home buyers will appreciate some flexibility in being able to sublet (i.e. rent out) their home given the high transaction costs associated with selling property in NYC. Sublet policies will differ dramatically between coops and are always subject to change. Many coops will allow subletting for 3 out of every 5 years, meaning you have to live there for 2 out of the 5 years. Some coops will allow unrestricted subletting right away while others will not permit subletting at all. Most coops will have a fee associated with any income earned from subletting your coop. In many cases it will be a percentage (i.e. 20% is fairly common) of sublet income. In other cases it may be a percentage of maintenance charges for the unit or it could be an uncorrelated fixed fee.
Sublease application – this is almost as important as the actual sublease policy. Home buyers will want to see this to determine how difficult and onerous it is to actually sublet the home if subletting is allowed.
Alteration agreement – many home buyers will have renovations in mind to customize their new purchase just the way they like it. As a result, it’s important for them to see the alteration agreement to get a sense of how onerous and difficult the process will be in your coop.
Coop board minutes – reviewing the board minutes (i.e. summary transcript of board meetings) will be an important part of the buyer’s due diligence process. The buyer’s attorney will review the minutes to get a better sense of how the building is doing, how it’s run and the social dynamics within the coop board and in the building. Selling a coop without a broker is difficult enough, the last thing you’ll want are board minutes packed with heated arguments about lawsuits and penalties against shareholders. The buyer’s attorney will want to make sure the coop board is composed of sane and reasonable people.
Building budget – as part of due diligence, the buyer’s attorney will want to review the most current financial budget of the building. He or she will want to review what shareholders’ maintenance is being used for and what planned expenditures in the near future will be. It will be a way for the buyer to understand what future associated costs of owning this coop may be.
Assessments – if there are any current or planned building assessments, it’ll be very important for the buyer to know. Assessments are additional monthly charges in addition to monthly maintenance charges. Assessments are typically non-recurring and levied to cover major capital improvements (i.e. replace an old elevator) or to make up for a deficiency in the building reserve fund. Major assessments are typically spread out over many months to reduce monthly costs for shareholders, this is especially relevant for residents who may not have a lot of funds in reserve.
Proprietary lease – this is document between the shareholder and coop which governs the terms of the shareholder’s residence of a particular apartment within the building. Please remember that in a coop, the co-operative corporation owns the entire building and is governed by a co-op board similar to a board of directors for a normal stock corporation. The corporation is owned by shareholders who have these proprietary leases which give them the right to occupy a certain apartment within the building.
Market your home to all potential buyers
Selling a coop without a broker successfully in New York City will require you to effectively engage the 90% of buyers who are represented by real estate agents.
List your home on RLS and relevant consumer real estate search websites for NYC
Make sure you sign up with a reputable flat fee MLS listing company who will get you in relevant broker databases and websites for New York City.
Many “national” for sale by owner websites who claim to cover all 50 states will promise to ambiguously list you in your “local MLS.” Be careful as NYC does not have a dominant MLS like most regions of the United States. In NYC the primary inter-brokerage listings database is the RLS (REBNY Listing Service) which is operated by the Real Estate Board of New York (REBNY).
Make sure your flat fee MLS provider will also syndicate your listing to relevant real estate search websites for NYC like StreetEasy and Brownstoner
Avoid listing with a flat fee MLS broker who openly discounts as they will have a negative reputation among the wider brokerage community
Invest in professional photography for your online home listing
Since you’ll already have full exposure to all buyers like the 96% of listings which are for sale by agent, what will give your co-op FSBO sale listing a boost? Consider investing a few hundred dollars in professional photographs which will present your home to buyers online in the best possible light. Great listing photographs will pay you dividends long after you’ve accepted an offer. For example, a buyer who has accepted an offer will be more likely to show off the listing to his friends if it has great photos. After who, who wants to be embarrassed when they show their friends the home they’re about to buy?
Request permission if necessary from your co-op building management company to hold open houses on upcoming Saturday and/or Sunday afternoons.
Try to take advantage of cross traffic if you see open houses listed by other units in your building. There’s no reason not to have your open house at the same time as theirs!
Make sure your building allows open houses. Some co-ops may not allow open houses at all or may only allow “open houses by appointment only.” That simply means buyers and brokers will have to email you for an appointment at a specific time slot during your “open house.