Co-ops can be a little bit more problematic than most other property types, at least from a buyer’s standpoint, because there are a number of people to be dealt with, especially if you’re getting a loan. Co-ops generally need more approval; you need to be interviewed by the board before they approve you to come live with everybody else in the co-op.
There’s a general misconception on the part of many co-op buyers that they’re buying real estate, so it becomes necessary to explain to them at the very beginning that they’re not buying real estate at all; they’re buying shares of a corporation, which allow them to lease a specific unit in the premises. Once they understand this, it’s okay. The process of buying a co-op can take a little longer than single family home or even a condo, but there are certain advantages to co-op ownership; while it can be a little expensive, you can get a nice unit for a less money than maybe a condo or a house.
Single family homes are usually less of a problem, but it depends on what you’re looking at, and the circumstances surrounding the deal; I usually find distressed deals are a little bit more difficult because there are usually a lot of exceptions in the title, like judgments, parking tickets or building code violations, so there’s a lot more to clear up. People who are forced out of their home usually have a lot of other problems, so that’s not surprising.
Overall, I don’t find that any specific type of property is a problem; it’s the general circumstances surrounding the problem that creates the biggest challenge. I generally do not represent short sale sellers, but I will represent a short sale buyer. I do not represent Short sale sellers as this type of practice usually require a separate staff to work on the phones and get the paperwork done; it’s a volume business, and not something I really want to be involved with.
Could You Provide Examples of Deals That You’ve Successfully Handled?
I handle a lot of different types of deals. For example, we just did a deal, where my client is a seller and in distress; he hadn’t paid his mortgage in about 4 or 5 months, he’s no longer living in the house and we had a buyer who lied to the bank when applying for his loan so he was denied. We were anticipating closing in March but the deal went sour, so I served the time-is-of-the-essence letter and when it was discovered they were misleading the lender, the lender pulled the commitment.
We tried to work a deal out with them to give them more time if they went to another lender of our choosing, but they elected not to do that; they wanted out of a deal. We were holding about $20,000 in escrow, so after negotiating with this buyer’s attorney, it was agreed that, rather than litigating it, we would settle, so we kept $15,000, which the client used to get current with his loan; now we’re actually in contract to sell the house to someone else and that deal’s expected to close in about two weeks.
This example is not really a norm; most of the transactions we deal with are more along the lines of resolving C/O issues and closing/possession problems it rarely gets that adversarial. If I’m dealing with another knowledgeable real estate attorney on the other side, we talk and work out the solution, which is to the benefit of both parties with the least amount of payment.
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