How to sell a coop by owner in NYC
So it’s quite clear that if you want to sell a coop fast you should hire a broker; however, what if you can’t afford to pay the broker commission?
In this segment we’ll show you how to sell a coop by owner and avoid paying even one percent in real estate agent fees.
Step 1 of how to sell a coop by owner: Hire a flat fee listing broker
This first step is significantly different if you are hoping to sell a co-op by owner. You will still need a broker to access the RLS broker database so you can offer commission to buyers’ agents. However, you can do so these days for a very minimal, one-time flat fee.
Hauseit will pair you with a local, top-rated REBNY Member Brokerage who will list you in your local inter-broker listings database as well as popular search websites such as StreetEasy, Zillow, Trulia and Brownstoner.
You will be copied on or forwarded all inquiries so you can directly manage the sale process. Pay commission only if you decide to close with a represented buyer. Pay nothing more should you close with an unrepresented buyer!
Step 2 of how to sell a coop by owner: Underprice your home
The great advantage of selling a coop by owner is the ability to underprice your home without being obligated to pay 6% in broker commissions just because an offer comes in at your listing price!
Since you won’t have to sign a traditional 6% commission Exclusive Right To Sell Listing Agreement, you will have the freedom to price your home however you wish without fear of being obligated to pay a broker just because a “ready, willing and able” buyer was found at your listing price.
Step 3 of how to sell a coop by owner: Be available to show your home
This is the biggest problem for most NYC home owners because most people cannot afford to take time off from work to show their apartment in the middle of the day.
However, being available daily at all reasonable hours to show your apartment will be critical to a successful sale. As we’ve alluded to before, many international buyers are only in town for one or two days and have busy schedules packed with showings. Often times, there is only one specific time available on their schedules to see your apartment. So if you’re serious about selling your home for the highest possible price, make sure you’re free to show your own apartment!
Step 4 of how to sell a coop by owner: Get a good real estate attorney
Getting a good real estate attorney is important for any transaction in New York City, but especially so if you’re selling your coop by owner. A good real estate attorney won’t simply rush you through the contract and rush you to sign. A good real estate attorney will advise you about various scenarios where the buyer can walk away from the contract if there are contingencies in the contract. A good real estate attorney will explain disclosures and answer your questions around the closing process. A good real estate attorney will give you an exact breakdown of expected closing costs.
You can immediately tell if the buyer has a good real estate attorney if he or she actually thoroughly diligences the building financials and board meeting minutes. If it is new construction, the lawyer will advise the buyer to get a home inspection. Even if it is a re-sale, a good attorney could suggest a home inspection before signing the contract. Sure the buyer is bound to get complaints from the listing agent about how an inspection is highly unusual for a co-op transaction, but the inspector will check for mold and make sure the outlets and appliances work. Keep in mind a home inspection is a visual inspection. A home inspector cannot take apart appliances or look inside walls at plumbing and wiring.
Step 5 of how to sell a coop by owner: Demand a quick contract signing
You’ll have to push the buyer or buyer’s agent to quickly sign the contract if you want to get a deal locked in fast. If you’ve underpriced your listing, then you will have more leverage over your buyer as you should have multiple offers waiting to be accepted.
An additional benefit of selling a coop by owner is that you avoid a typical conflict of interest for listing agents: once they have a serious offer they don’t want to continue spending time showing it. It makes sense from the agent’s perspective, why keep showing if you already have a good deal? The marginal benefit to an agent of a slightly higher offer if they continued showing is minuscule. While $10,000 more on a better offer is significant to the owner, it only represents $300–600 more in commission for the listing agent.
Since you are selling by owner, you’ll need to handle this negotiation and salesmanship yourself. If you find it to be too challenging, perhaps consider our 1% for Full Service listing option so a professional can manage the entire process on your behalf.
Step 6 of how to sell a coop by owner: Prepare your buyer for the board package
Is your board relatively relaxed? Is your co-op an income restricted (i.e. HDFC) building? Or is your co-op board extremely uptight and nit-picky? These are all important considerations for your buyer to know as he or she completes the purchase application and prepares for the board interview.
It’s important to have your buyer first read a tutorial on how to prepare a co-op purchase application so they will know basic tips like a purchase application must be typed versus handwritten.
Afterwards, you simply need to make sure they follow the instructions of the purchase application, include signed originals as well as collated copies, have supporting financial statements match the financial summary and so forth.
Here is a sample email from an affiliate buyer’s agent on next steps after a contract was fully executed:
Congrats on getting the deal in contract! The next step is to complete this purchase application (“board package”). Please take a look at this article (https://www.hauseit.com/nyc-coop-board-package-purchase-application/) for important tips on how to go about it (e.g. must be typed).
The listing agent mentioned the purchase application can only be submitted to the management company the 1st Tue of each month. So that means Jan 3. Do you think you can get a loan commitment by then? If not then the next date will be Feb 7.
The board then meets the 3rd Tue of each month to make a decision. We get an answer the next morning and if you pass then there’s a board interview the following week.
Please mail us all of the required original docs (i.e. reference letters, net worth affidavits, etc) and you can create a Google Drive folder and upload all the files there as well (tax returns, bank statements, pay stubs, etc). Thank you!
Here are some additional tips from the listing agent:
Blank pages (i.e. of statements) should be included. Letters should be signed and original. You should write a nice introduction letter. The board reads every word so attention to detail is important.
P.S. The seller needs to also sign the lead paint exhibit B,C & D, so hold off on mailing those as we’ve asked the seller’s side to complete that first and mail it to us
Please note: this article is not intended to serve as legal or tax advice. You should consult your lawyer and tax attorney for all aspects of your real estate transaction.