How To Buy a Co-op When You Can't Pass the Board

While it's infinitely worth it, the process of buying a co-op apartment can be a pain in the a**.  A major hurdle is the co-op's financial requirements.  We recently helped some clients purchase a co-op for their child, who was new to the city and didn't have the resources to do it on their own.  

Here's the workaround we employed.  We found what's called a "sponsor unit."  A sponsor unit is an apartment that was held back by the developer when the building became a co-op, usually for personal use or as a rental unit.  When the sponsor decides to sell that apartment, they can do so without it undergoing the board approval process.

A few things to keep in mind:  There are just a handful of sponsor units on the market at any given time.  They often cost a bit more than similar apartments, because people will pay a premium to avoid that board approval process.  

There can be additional expenses, like transfer taxes and attorney fees.  The board may still require the purchaser to submit an application, even though they can't approve or reject it.

Our clients' child is settling into their new home and exploring their new neighborhood.  We love a happy ending!  Have questions about sponsor units, co-op requirements, or anything else we covered here?  Drop us a line and we'll answer them.