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I'm a young-ish (30s), single female who is in the process of buying a property for the 1st time. I was told that the sponsor holds majority shares, but the financials are ok, and I found a bank that will (likely) give me a mortgage. My lawyer and an accountant did due diligence reviewing the bldg's financials, etc. and reported that everything looked fine. But something has been nagging at me that there's still something I don't know. I started doing my own research and came across an article on Habitat, featuring the bldg that I plan to buy into. It's called "When Sponsors Refuse to Sell Apartments-Part 2." (https://www.habitatmag.com/Publication-Content/2008/2008-December/Featured-Articles-from-Our-Print-Magazine/When-Sponsors-Refuse-to-Sell-Apartments-Part-2)
I told the agent that I'd send my signed contract tomorrow. She sent out multiple contracts, so if I send it any later than Tuesday morning, I'll likely not get the apt. But I'm still not 100% confident about moving forward. And after reading the Habitat article, I'm even more concerned. Would I be crazy to move forward on this, given what sounds like major issues with the sponsor? I like the apt. a lot, and I've been looking for a while, but I don't want short-term happiness (finally buying an apt) for long-term misery (being impacted by the sponsor). PLS HELP!
I agree with your gut feelings and with PC#1's comments. Based on what you wrote I would walk away from this apartment.
In addition to all the warnings about sponsor ownership PC#1 listed, another big red flag to me is the issuing of multiple contracts for the same apartment. This sounds very shady at best and could be a scam. It sounds like serious pressure is being applied to get you to sign, and I'd have to ask myself why. I bet your anxiety is what's riling your gut.
You'll definitely find another apartment you'll fall in love with. I'd swipe left on this one.
Go with your gut and the recommendations here DO NOT BUY!
I purchased a co-op 7 years ago and I am still stuck here unfortunately. It was the BIGGEST MISTAKE of my life. I had a bad feeling about 2 board members, but I was green and did not ask the right questions. Living in this hell hole has been a life changing experience and not a good one. I feel as if I purchased my own tourture chamber. If you don't take it check to see how soon it is sold.....may not sell for a while.
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Go with your gut feelings, what you want is 100% share holders ownership. Habitat is correct. Sponsors can rent or sublet to anyone and control what goes on in the building depending on how many apartments they own in the building. You would be happier with a no sponsor building and a building that does not rent or sublets. Best of Luck in finding your dream home or apt.
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