10/05/2023
I was explaining this to a housing co-operative earlier so I thought I'd share it here.
This is with regard to selling shares in a co-op.
First of all, any real estate transaction, needs a fully transparent process.
Second of all, as a professional real estate company, fully licensed with the state of Pennsylvania and we follow all the laws and ethics related to real estate including all fair housing laws etc.
The laws were created primarily to protect the consumers but also everyone involved including all professionals.
For any real estate sales, including single family residences, condos, co-ops etc., we typically request acceptable proof of funds.
That can include a note from an investment house showing the funds are available in a 401K and can be drawn when needed.
That can be a recent bank statement showing funds are available.
That can even be gift letters from mothers or grandmothers etc. that show the funds needed for the purchase will be available in time for a closing.
What we would be very concerned about is any loans to buyers. To protect ourselves, the community and the buyers and sellers, we need to see that information. If a buyer is receiving a loan we need to see the terms of the loan to ensure they are fair, reasonable, legal, ethical and moral and that they won't compromise the community's position or ability to collect the regular carrying charges.
For example, if someone is receiving a loan to purchase a share in a co-op and there are high monthly payments due to the lender, the loan payments will be paid first and the community carrying charges will be last to get paid. Do you want to start chasing people for payments they can't afford because of some high loan payments due to the lender?
Or do you want to see lenders taking back the unit and renting them out to someone else? Then you have a rental issue which is against the rules and regulations of the co-op.
There are many concerns with loans and there are many reasons to know in advance where the buyer is receiving their funds.
Detailed, open and clear communication, and a fully transparent process can save a lot of heartache in the future.
Your thoughts?