How to Sell a Co-op Fast in NYC
So you want to learn how to sell a co-op fast, here’s how to do it with or without a broker.
Step 1 of how to sell a co-op fast: Hire a broker
This is the fastest and most convenient way for you to sell a co-op fast. However, it’s important to note that you can cut down on high closing costs involved with selling a NYC co-op by hiring a full-service broker for only 1% commission.
A full-service broker will upfront the marketing costs involved with selling your property. If you want to know how to sell a co-op fast, then this is the absolute fastest way to get your co-op sold.
A full-service broker will immediately order a professional photographer and a draftsman or architect to visit your home. You will typically receive digitally re-touched photographs as well as a newly drawn floor plan within 48 hours of the visit. Because a broker will have a roster of professional photographers and draftsmen ready to go, they can typically get a photo-shoot scheduled the very next day after you sign an Exclusive Right To Sell Listing Agreement.
Pro Tip: Be careful of traditional listing agreement language which may compel you to pay 6% commission as long as a “ready, willing and able” buyer is found at your listing price!
Step 2 of how to sell a co-op fast: Set a realistic listing price
Any listing will sell at the right price, regardless of who is listing the property. This was recently admitted by the CEO of Douglas Elliman at a NYC real estate conference. Because your broker will upfront time and money to market and show your property, they will want to make sure you have a realistic listing price.
As a result, you and your full-service broker must mutually agree on an initial listing price. Your broker will be incentivized to price it low so he or she can sell it faster and more likely collect a commission. You will be incentivized to price it high because you want maximum proceeds. You will have to meet in the middle at a realistic, market clearing price.
Step 3 of how to sell a co-op fast: Make your home available for showings
This step seems self-evident, but many home owners seem to think it’s okay to only make their home available for showings when it’s convenient for them, perhaps for a couple of hours during an open house on the weekend.
This is a recipe for disaster and will likely result in your home becoming stale and sitting on the market for too many days.
Pro Tip: You can reset your days on market simply by relisting your home in NYC through an Agent Assisted FSBO. It is possible to do so as many times as you want.
This is an especially risky maneuver for luxury homes priced over $2 million where the buyer base is considerably smaller.
Much of the buyer base for luxury priced homes will be from overseas. These international, typically all-cash buyers will often only be in town for one or two days. As a result, it’s not uncommon to hear from a buyers’ agent a request to see your listing at one specific time and day. When you push back, you will often hear that is the only time available as their day is packed with other showings already.
As a result, we’ve seen instances where sellers of multi-million dollar properties have pushed back on showings either because they were away for the weekend or because they couldn’t take time off to show during the work day. As a result, they missed the few international buyers that would have been able to afford their property.
Step 4 of how to sell a co-op fast: Hire an experienced real estate attorney
You should hire a real estate attorney as early as possible in your sale process. Ideally, he or she could even review the exclusive listing agreement before you sign with a broker. This is especially important if you’ve chosen to pay up for a traditional full-service broker.
If you want to sell a co-op fast, you’ll want a contract of sale already drafted and ready to send to the buyer’s attorney before you’ve accepted an offer. This way, you can have your attorney send out the contract as soon as an offer has been accepted and a deal sheet circulated.
Step 5 of how to sell a co-op fast: Demand the buyer to return a signed contract within a week
This step is easy if you’ve correctly priced your property. It’s almost a certainty you can have this kind of power as a seller if you’ve slightly under-priced your property as you will be facing multiple offers.
As a result, because you have multiple interested parties you can demand the buyer to expedite the contract diligence and signing process.
Note: while not recommended as it may cause offense, some sellers in hot markets have sent out contracts to multiple buyers. This way, whoever signs the contract first with the best price will get the deal. Remember, nothing is final in real estate until a contract is signed by both parties!
Step 6 of how to sell a co-op fast: Ask your lawyer to minimize buyer contingencies
A good real estate attorney will negotiate the contract for you in such a way that there are minimal chances that the buyer can just walk away. This may mean negotiating the financing contingency clause or appraised value contingency clause in your favor.
What is a financing contingency clause?
This is language in the purchase contract which typically gives the buyer the ability to walk away from the transaction with his good faith deposit if the buyer is not able to secure a financing commitment from a bank within a certain amount of time post contract signing.
Note: if you aren’t on the board at the time of your sale, ideally you are at least friends with the board members. If you have enemies on the board, it may be problematic for you. The board can reject your buyer as many times as they want!
Step 8 of how to sell a co-op fast: Prepare the buyer for the purchase application and board interview
You want the buyer to be approved the very first time. This will save you the hassle of waiting for the buyer to re-submit an application or having to restart the sale process and find a new buyer!
You know the board better than any other party in the transaction, so please share with the buyer what the board is like and how to behave at the board interview. Is the board relaxed? Will they ask any particularly hard to answer questions? These are all good things for your buyer to know.
In terms of the purchase application, some boards are stricter than others. Some boards will be very relaxed and not be overly demanding or nit picky of errors, formatting or spelling mistakes. Some boards may not even bother to read the entire application!
Other boards will be extremely thorough and read every last single word. Only you and possibly your listing agent will know this in advance. Therefore, as a courtesy please remember to convey expectations in advance to your buyer.
Note: As a general rule, it’s best for the buyer not to ask any questions at the board interview. They should say they have no questions even if the board asks them at the end of the interview whether they have questions.
There have been cases of boards asking whether the buyer has questions at the end of the interview simply as a test of whether they will be difficult future shareholders.
We’ve recently heard from a few veteran agents at a top NYC brokerage that “regarding the interview, I always say less is more and advise buyers to just answer the questions posed to them.” Another agent chimed in to “remind them that it’s business attire for the interview tonight, even though some board members may be dressed casually. And being prompt and on time is important.”
If you’ve followed all of these steps on how to sell a co-op fast, then you should hear from the building management within a few days of the board interview on whether the buyer is approved.
Once approved, you or your agent should notify the attorneys and the lender so that a closing date can be coordinated. Your agent will schedule a final walk-through for the buyer usually the day before closing to make sure the apartment is still in the same condition as when the buyer previously saw it.
Disclosure: Hauseit and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.