Buying A Coop On Long Island - An Important Thing You Should Know!
My clients are on the verge of closing on their co-op. They went into contract on 3/8/10 and we knew it would be plenty of time to close before June 30th so they would get the tax credit. It's possible they will not get the tax credit and if that happens, the deal is dead.
When you own a co-op that has a mortgage, you have a share certificate that states how many shares you own. That stock certificate is the lien on your co-op and the bank who holds your mortgage has that certificate in their files. When the mortgage is paid off, your bank gives this share certificate to you. You need to hold onto it just in case you ever sell your co-op.
But, our situation is this: The seller's attorney never called the seller's bank back in March to give them a heads up that we are going to need the stock certificate at closing. That call was made today. It could take 45 days for the seller's bank to locate this stock certificate. This is what happens when you have an attorney that doesn't do co-ops all that often.
I went through a similar situation when I sold my co-op 3 years ago. The only difference is that my bank lost the certificate and my attorney told them to either find it or have a new one made up for $500.00 at their expense. Wouldn't you know it they "found" it a few days before I closed on my co-op. All was well with the banking world.
As it stands, the bank is Wells Fargo and my client's attorney has a few contacts there so this all could work out. I will know eventually. I've used her for a few of my own real estate deals and she usually gets what she wants but we will see. All I know is that I will cry right along with them if they lose the co-op. They are first time home buyers and have worked hard for many years to purchase their first and probably last home.
So, in the future if you are buying a co-op, have your attorney make sure the seller's attorney has done co-ops AND to bring up the stock certificate issue from the very beginning. Do not assume all parties know what they are doing.
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Jackie,
I will have my fingers crossed that this all works out well. This is what makes real estate so frustrating these days is the number of challenges that get thrown in the road on the way to closing!
All the best, Michelle
Oh, I do hope it all works out. I have never had to work on a co-op sale, so I'm glad I know this now for future transactions. Good luck!!!
Jackie, I have just had a delay due to an attorney's office that did not do their job properly. Very frustrating indeed. I will keep my fingers crossed for your buyers, this is not a pleasant thing.
Jackie...
We don't see many co=ops here. In fact, I have never done one. This is good information in case I ever stumble upon one.
That sounds like tricky stuff. Thankfully the last time I had to think about co-ops was in my RE classes!
Jackie, yikes! I hope this works out for your clients. Coops are always interesting in these parts - though most of our apartment sales are condos. Good luck with it.
Hi Michelle, Thank you and so am I. It never occured to me that this can happen but I know in the future I will keep on top of it for the next time even though it's the seller's attorney's job to do it.
Hi Shannon, thank you :)
Hi Andrea, Frustrating is right. The seller's attorney's secretary called me the other day thinking I was my buyer's attorney. Unreal.
Hi Richard, if you ever come across one, call or email me, lol.
Hi Ellie, They are not difficult. You just have to know the Co-op Board's requirements regarding salary, fico scores, and debt to income ratio. Which means you have to try to pre-qualify your buyer first.
Hi Pat, I hope it works out as well. I have an idea which may or may not work but I'm giving it a shot. We have a lot of coop developments here in West Babylon. I owned one and sold it 3 years ago so I'm well-versed with them.
Jackie - I hope it works out. Like Richard, we don't have many co-ops here either, so I've never come across this situation. Thanks for bringing it up just in case I ever do.
Hi Elyse, I hope it works out too. I also have someone else working on getting that share certificate from the seller's bank. And you are welcome!
Hi Jackie,
How are things going with your case? I wish I would've seen your post in May. We are dealing with the same issue, and found out only today that the stock certificate is missing and thats how I run in your post. Is possible that we may lose the tax credit at this point. Any updates or suggestions are really appriciate it.
Thank You.
Hi Joana, Everything ended up going well. Thank goodness!
As of now, our government did not pass to extend the closing date from June 30th to September 30th. Anyone who went into contract as of 4/30/10 will not get the tax credit if they close past 6/30/10
In a case like this, the seller's bank has to either find the stock certificate or pay to have a new one drawn up. If the seller does not have a mortgage, then the seller has to pay for a new one.
With my clients, their attorney gave the seller's attorney her contacts at the bank where the seller held his mortgage. That did the trick. If she didn't have well-known contacts at that bank we would still be waiting.
I hope it works out for you as well. You could never know. :)
can someone hold a mortgage on a coop ? There is a complex that noone seems to be able to sell their coop even with people with perfect credit. why is no one able to get a mortgage on a coop> what are the ramifications of holding the mortgage. the unit has about 40000 left on the mortgage
Hi Fran, That is a good question! That will depend upon the board to approve that but don't hold your breath either. Some boards require buyers to put down at least 15% even if that buyer's bank says they can put down 10%. Why is there a problem in this one development where no one can sell them?