I'm a licensed Real Estate Salesperson in NYS. I've never heard of any building being allowed to ban a particular agent. If there is a legitimate complaint you can report the conduct of the agent to the Department of State, but from what you describe it does not sound like you have a legitimate complaint.

You mention that the unit that was up for sale was "similar" to 2 that sold this year in the mid $300s. Then you mention at the very end, "accepting their advice cost them say $40-50k, adjusted for condition."

This tells me that condition of that unit may not be on par with the 2 units that sold earlier and therefore cannot be considered "similar" by real estate standards. Did the other 2 units have upgraded kitchens, baths and perhaps some other capital improvements that this unit lacked? I would check that out before being to quick to blame the agent.

Another thing is that regardless of where a Real Estate agent practices, once they have access to multiple listing service (MLS) they can research the comps to see what has sold in your building and in your area to keep pricing in line with the market for your area.

Open houses are also advertised on MLS and all agents get access of dates and times of open houses, but if there were photos in the listing that showed it was clearly not up to par with the other units that sell in that area, then buyers will not be enticed to go there and the seller would have to consider lowering the price if they needed to sell. And even if the shareholder chose a different agent, if they have extenuating circumstances in this economy, such as a job loss, reduction in income, etc., they may be inclined to accept ANY offer they get, which again may not be in line with the comps and recent sales of your building, so there are many factors to consider here.

Unfortunately, there is not a great deal you can do because the shareholder has the right to select whichever Real Estate agent they choose. You can always discuss this with the co-op's attorney as you don't want to be hit with a lawsuit later that you impeded the Shareholder's sale in any way and make sure that even in your approach to the Shareholder, you are not saying anything that maybe construed as illegal or unethical and your attorney can guide you better in terms of your approach.

Hi APayne,

I hear what you are saying - yes, the units were already price adjusted for condition. The unit was offered and priced well below current market and condition.

What I didn't hear from you was the effect on the shareholders: those who sold their unit and all remaining shareholders (who are selling two corporation owned units in the same line). You are right; Boards do not have much power to protect an individual shareholder against their own actions - just an up or down vote. But how about the rest of the shareholders: surely Boards have a duty to protect them - not against market forces, but against poorly performing agents and blindly following shareholders?

A friend of mine suggested setting a floor price as a way of establishing protections. How about credentialing a broker before they can be allowed to participate in a sale? Or requiring a local broker? Do any buildings have any of these requirements?

Thanks!

At first look, some of your suggestions sound excellent. However, there are many laws that would prohibit some of your suggestions. First, barring a broker from participating in sales in a building because residents didn't like his market analysis or amount the unit sold for could easily fall into a restraint of trade category. If you set a floor price it could be injurious to someone in difficult financial straits who must sell immediately, or an estate sale, or, someone transferred for business. No one should ever have the right to dictate how much I can sell somethng for. The board should not have the responsibility to set prices for any reason unless the board is willing to buy the apartment at the discouned price and then resell it, then the owner would not be injured. A sale is based on two people, buyer and seller coming together on terms that are agreeable to both. A low sale prce in a co op has no more impact than a low sale price on a one family house on a street with other property for sale. Condition, supply and demand and most of all each parties individual situation dictates what will be agreeable, not boards and neighbors. Every owner has the right to say no if they feel the price is too low and every buyer the same if the price is too high. Would you also set a maximum price. If you don't, when the market picks up there will be an overabundance of apartments for sale and that could look like there is something wrong with the building.

I have forty years of real estate experience and can assure you that the number one reason a house doesn't sell is because it is over priced. The three most important words in real estate are not location,location,location, but rather, price, price, price. Whatever the location if it is priced well it will eventually sell. Let's not interfere with a free market unless you are prepared to buy at the low price and resell at what you consider a "fair market price"

Hi Dianne,

I respect your posts a lot. What about the remaining shareholders who are very likely injured by a sale such as this? Per my original post, the corporation owns, is renovating and will sell two units in the same line (we are a six floor building so they are all close together). Are you trying to say that a low ball (under market - we have recent appraisal and sales data) sale in the same line will not have any impact on those two units? Two people - a buyer and a seller, can hurt remaining shareholders too, no? Does one shareholder take precedence over all shareholders? In some senses, brokers have it easy in that they get to walk away after the deal is done (unless they happen to live in the same building).

I disagree with you on why units don’t sell – I believe that most units don’t sell because they are not worked.

My thoughts are that yes, we can not control the market but we can influence it. We do it every day by replacing landscaping, repairing buildings, having reserves, painting hallways and all the other things that Boards do to maintain value. Why give up all of the hard work to a deal such as this? I can’t buy it.

There is no question that one sale MIGHT have an effect on others. Typically appraisers will look at any that seem atypical and either throw it out completely or do a little investigating into the reason for he low price. My real point is that we just can't prevent someone from selling at any price they choose unless we are prepared to buy the property from them and resell it at whatever price we choose to. I understand your position and rationale, but we need to look at the legality of it. Because you live in a six story building one sale will a greater impact that if it were a 50 story one. Where do you draw the line? At what point is a single sale relevant. So many things seem unfair to one person but might have little or no impact on another. Look at another side of the coin. Have you considered the overall share price as a way of generalizing prices. In other words if 3 units have sold add up their cumulative shares add the total sale prices and divide, giving an average at which shares are sold. It might be a little less glaring for a potential buyer than comparing actual sale prices. Do you factor in the floor the unit is on, higher is more expensive or views are there any negatives one floor to another. These all need to be considered, not just the line. You frustration is well taken, but fair trade is fair trade.
Happy New Year

I have noticed a consistent problem with sales and sublets over the years. Inexperienced and not too bright Agents, and older lazy Agents who know better. The problem is undervalued appraisals by Agents who do not know better, and lazy Agents who instead of really selling just sit back and say lower the price, because they are interested in turning the sale over, not selling for the right amount. As a Board President I get the calls from upset shareholders about low ball sales pricing, and know that we can neither ban nor refuse a legitimate sale. Being sent inappropriate applicants is easy to deal with, an upset shareholder who has been led down the path by a foolish Agent is painful to deal with. A building with a lot of Estate sales is going to be so devalued over the years because of fire sale pricing that it ruins the asset value of the remaining shareholders. How do you compensate for that? How do you lift the pricing against that tide?

Banning an agent for something like this doesn't seem appropriate. We had a similar issue come up in our co-op several years ago.

An owner was ready to sell and instead of using a broker with a base in the neighborhood used one whose focus was distinctly different: a broker whose firm is known for top-of-the-market listings for clients who are sometimes known as "individuals of high net worth." Our building, and NYC neighborhood, is on the edge of middle class.

From there the story is very similar to Steve's. Apt sits on the market, asking price gets lowered. At the same time, apt's in our building were selling well and for record-breaking amounts (this was pre-crash).

At least two board member mentioned to the seller that the broker may be the issue--not herself, but her client list. The seller insisted she was happy with the broker, but eventually accepted an offer lower than she was happy with.

I think a better solution is to explain to sellers why it's important to choose a broker who can work for them: brokers who know the neighborhood, have a client list, etc., and how that can have an impact on sales price. The challenge is getting such a tip sheet in the hands of sellers before they sign up with a broker. I usually heard about an apt for sale after the broker was hired (and sometimes not until I saw the notice for the open house).

@board member, I've seen this myself in my own building; people go with their cousin or a broker in a huge firm or someone their boss (who lives in a neighborhood far, far away) recommended or their best friend used. And usually, that broker knows absolutely nothing about our neighborhood or our building, and throws up a boilerplate ad in the NYT and does an Open House sheet and we only see him/her every other weekend.

I've also seen sellers who use a savvy local broker who knows every building in the area, what it sold for, what it listed at, why there was a difference, etc... prices them right, and they nearly always come out over the ask.

I wish more local brokers would hold seminars for prospective sellers about the best way to sell their condo or co-op. (Or ANY local business or agency to interact with the co-op/condo residents in their neighborhood in an informational way!)

Maybe they're waiting for the boards to invite them? I can think of few "value-added" activities for shareholders that could have a large financial impact, especially if they're free. And ensuring the board and broker interact in a meaningful way (so everyone has first-hand information) is also helpful: put newsletters in their hands; make sure they know your website exists; give them last year's financials.... get copies of the sell sheet, the ad, etc.

An engaged broker is a broker who will sell, just as an engaged board innovates when necessary.