When To Paint Red Flags Green In Real Estate
PAINTING RED FLAGS GREEN
What does painting a red flag green mean? Sometimes there is a big difference between what the apartment looks like online vs. reality. Online you are attracted to it immediately: the location, size, amenities, price and carrying costs seem perfect.
In person, your intuition tells you something about the apartment might not be right. Do you ignore that intuition right then and there and "paint it green"?
Here is a list of 5 common red flags and how potential buyers can get comfortable with them (there are plenty more...believe me!):
1. High % of renters in a co-op building when you intend to live as a primary residence
RED FLAG: Financing will be difficult and therefore future re-sale value is at risk, also a sign of a transient community
GREEN: If you are eventually planning to sublet in the future or is paying cash it might be OK
2. A handful of owners in the building own multiple units or control a majority of the shares
RED FLAG: Owners can form "voting blocks" and make decisions on behalf of their best interests vs. yours
GREEN: If there is an indication some of the owners are planning on selling in the near future it might be OK
3. Aggressive flip tax or sublet fees
RED FLAG: Older shareholders have excessive power to negatively impact newer shareholders (you) financially
GREEN: If you're planning on living in the apartment for a long period of time and not planning on subletting it might be OK
4. There has been a mass exodus from the building
RED FLAG: Anything more than 10% turnover each year should be carefully evaluated
GREEN: A larger neighborhood change has occurred, such as the Q train in the UES, it might be OK
5. The apartment has been in contract multiple times and subsequently re-listed
RED FLAG: Either something is wrong with the building, board, buyer, or all three
GREEN : The listing agent can appropriately explain exactly what happened each time and it makes sense to you it might be OK
I can help you identify, question, validate/alleviate, and communicate any red flags and we can work together (if its aligned with your risk appetite) to move forward with something you feel confident with. If you know someone looking to buy, sell or rent in NYC, don't hesitate to reach out!
Do you want to add a red flag to this list? Email me at Danielle.Nazinitsky@corcoran.com!