back with more coop questions

I think we have decided on the apt. building, nicer, doesn't need work apt... and I've gotten over most of my hang ups about it being a building...

We are in the process of picking a lawyer and going to contract....

After that my questions start:
1. Do we have to find an engineer to inspect the property or is that only for houses?
2. Should we start considering homeowners insurance or is the coop insurancre or apt. insurance?
3. I read that not all mtg. companies want to do coops.... any difficulty with anyone getting a mtg. b/c its a coop?
Thanks in advance... I'm sure I'll be back with more... this is all so new to us.

Re: back with more coop questions

Hi!

I am buying a coop right now and I had an engineer come to inspect the property. It is to protect you from getting a crappy place... the engineer will check everything, things you would not know, he will give you estimated prices of anything you have to fix.

It is very important to get... I paid about 375 for a one bedroom coop. Totally worth the money.

Your other questions are questions I have myself!! But my mortgage company didn't care.

Good luck! I can recommend my inspector if you like, he is located in Northport, and was very thorough.

Re: back with more coop questions

I have a condo so I can help with the first 2:

1. Absolutely have an inspection performed by an engineer. You are investing a great deal of money into this place. The inspection for a house is different than an apartment but not less important. You need to protect yourself. If the walls are about to crumble around you, you need to know.

2. You should get your own homeowner's insurance policy (same name regardless of house vs. apartment/coop). Don't assume that your coop is responsible for everything. If, for example, your tub leaks into the apartment below you and causes water damage, you may be responsible for that and not the coop.

Hope this helps!!

Re: back with more coop questions

most banks will do a co op loan as long as it is a situated co op..in my situation it was an apartment complex changing over to co op so only a few banks would support it. i have homeowners insurance just make sure you say for a co op and not a condo..we didn't do an inspection but that was because the complex needed to have it done all together for the new venture so although it might have been stupid to accept their word, our lawyer didn't feel it was necessary..good luck

Re: back with more coop questions

I moved into a co-op earlier this year. Here's what we found:

1. Do we have to find an engineer to inspect the property or is that only for houses?
We did not have an engineer do an inspection. Our lawyer adviced that we didn't need to do it.

2. Should we start considering homeowners insurance or is the coop insurancre or apt. insurance?
For a coop you get a coop/condo policy which is more like renters insurance in what it covers and what it costs. The coop itself has insurance to cover damage to the building - you just cover damage to everything inside your apt walls.

3. I read that not all mtg. companies want to do coops.... any difficulty with anyone getting a mtg. b/c its a coop?
It depends on the specifics of your building. There are certain things that might make it more risky and harder to get a mortgage. For example if a sponsor owns a large percentage of apts in the building or there is a pending lawsuit of any kind, it might be difficult to find someone willing to give you a mortgage. If the building is in good financial shape and doesn't have any issues, you should be fine.

Re: back with more coop questions

We bought a co-op last year, so I can help a little...

1. Do we have to find an engineer to inspect the property or is that only for houses?
Ou lawyer said it wasn't necessary, but we should have someone take a look anyway. We had my uncle do it for us.

2. Should we start considering homeowners insurance or is the coop insurancre or apt. insurance? The co-op's insurance policy only covers the building itself. You'll need homeowners insurance to cover everything inside the walls of your apartment.

3. I read that not all mtg. companies want to do coops.... any difficulty with anyone getting a mtg. b/c its a coop? We didn't have any difficulty. We used HSBC. I have heard of the problems, but if your building is majority owners, you shouldn't have a problem.

Good luck!

Re: back with more coop questions

1) was answered adequately above

2) You need a co-op policy. This differs from a rental policy because a good co-op policy also covers stuff like the kitchen cabinets... the bathroom fixtures. This is stuff the co-op building policy doesn't cover.

I was told that if lets say your apartment has a fire. Destroys everything. All the co-op is required to do is to fix your apartment up to the sheetrock/walls. They do NOT replace stuff like the cabinets, sink, etc. If you are absolutely sure your co-op does replace these items... great. But I was told that a lot of people don't know this.

3) A lot of smaller banks and online banks don't do co-ops. E-Loan for instance does not do co-ops. If a bank does do co-ops... a lot of banks have an 'approved co-op list'. Its a listing of all the co-ops they will lend out money to. If your co-op isn't on the bank's approved list... sometimes you can get the co-op added to the banks list by having the co-op send over all their financials and stuff to the bank underwriters. Its been done.

Re: back with more coop questions

Thanks everyone... all of those answers were really helpful.

And I thought buying a car a pain!!