West Babylon NY Coops - What Are They?
Co-ops are apartments in small or large complexes. You do not own the land or the unit itself, you own shares and you are also a shareholder. You are responsible for the walls in.
There are a group of shareholders called the Board. Shareholders vote for these Board members so that there is some control over what goes on in the development and to make sure the By-Laws are upheld.
Then you have the property management company. This company is hired by the Board to take care of the grounds maintenance and they oversee the Maintenance Manager who usually lives on the property rent-free.
Every Board in a co-op development is different. All rules are different. The Board sets the down payment amount with buyers, your debt-to-income ratio, salary requirements, and credit score requirements. Always find out what the requirements are before you put in an offer on one. Your Realtor should know these requirements beforehand. If not, make sure they call the development to find out.
The Board also has to interview you. This is usually the last step when purchasing a co-op. Some developments will pre-qualify you in the beginning. It's better to find out if you will be approved in the beginning then to find out 8 weeks later that you have been denied and you are already approved for your mortgage. Remember, most Boards do not pre-qualify you. Always ask.
Down payment Requirements - Even if your bank says you can put 10% down, some co-op Boards will want 15 to 20% down. You can't get around this so don't even try to ask. Most co-ops on Long Island want 10% down. Find out from your Realtor what co-op developments want 10% down if you can't afford to put down more than that.
Maintenance Fees - Maintenance Fees cover: underlying mortgage on the development, grounds up-keep, pool maintenance (if there is a pool), heat and heating units, water, your property taxes and payroll. The maintenance fee is tax deductible up to 65%. You have to consult with your tax accountant on this. Even if the Realtor says 65%, you must talk with your tax accountant first.
What Is Allowed? - This depends upon the Board. You need to read the By-Laws and your attorney will read them as well. Some developments are against moving or knocking down walls on the inside for fear it will not be done to code. This I can understand. Before doing any major renovations like this, you always have to get permission first.
Pets are usually allowed but for dogs, there may be a weight maximum. Some co-op developments will have a maximum dog weight of 30 pounds. Always check first.
If there is a pool, a shareholder may only be allowed 3 guests per unit.
It's a good idea to have a Real Estate Attorney that has dealt with co-ops in the past. I have used Michelle Goetz in Islip, New York and she is excellent!
If you feel buying a co-op is for you, then make sure to do your homework!
I am also well-versed with co-ops so you may contact me anytime for more information.
