When you’re buying an apartment, you’re really doing three things:
1) accepting price
2) accepting condition
3) accepting risk.
In addition, you need to get the building to 4) accept you.
If you are working on your own without an agent, the best check that the price is acceptable is that you’ve shopped around, and that you like your target apartment at the settled price because you’ve seen what else your money can buy you. In addition, if you’re borrowing money, you need to make sure that you’re not wildly overpaying by the bank’s standards. For New York City, the easiest rough check on historical prices is to run per square foot pricing at www.millersamuel.com/data. Be aware that the stated square footage of the target apartment may be overstated, so quickly check its footprint: a 40′ by 20′ square may be advertised as 1,200 square feet, but your lender won’t believe it.
2) accepting condition. One chief reason buyers use agents is that it’s tough to look past a beautiful design. Some FSBO buyers try to get around this by bringing in home inspectors, who vary greatly in quality but are better than nothing. Search this site for “walk-through” and you will come up with a fairly detailed list of things to look for. In terms of the condition of the building, you want to know when the boiler, roof, and windows were last replaced, and when the last compliance with Local Law 11 took place. A good lawyer can help you do some of this if you don’t want to use a broker. Also, check the board minutes for possible problems, and run a check of the building on New York City’s BIS website (free.)
3) accepting risk. No apartment owner is an island, especially not a co-op buyer who is buying shares in a corporation. What would you do if you were buying GM — Rely on its reputation? Call a broker about its past performance? Examine its financials to see the structure of its assets and liabilities? This is the same type of due diligence that you do with a condo (often by reading the offering plan, which runs about 300 pages) or with a co-op (often by reading the past two years of financial statements.) You are looking, as you would with a company, for a sense of how management handles long-term planning versus short-term expenses. In addition, ask the seller if any assessments are planned; if they know they must disclose. Finally, many buildings hire certiorari attorneys to reduce their taxes, and the attorney’s fees come down on individual shareholders. Again, ask the seller if such an assessment is coming through, because it should fall on the seller, not on you.
As far as 4) The one overarching comment is to take the application process seriously. You should use the level of care that you took with your college applications, and approach the interview with a degree of respect and formality. The more money and status you have, the more care you should take with the process, not less. For more specifics, there are lots of posts on this very searchable site about co-op boards and interviews — type “board” or “interview” in the search box.
And oh, if this has been helpful, buy my book: http://tinyurl.com/2ag28z