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Need opinions re: selling a co-op
Sorry in advance if this is long:
I'm not asking opinions for myself, but this is more for my inlaws who are being forced to sell a co-op that they own because they obviously did not pay attention to the rules that state that you are not allowed to rent the unit out 
My H & I were living in the apartment for about 9 years, 3 of which we went to live in Spain and my IL's were able to sublet the apartment while we were gone. We just bought a house though, so now the apartment is empty and the board is not allowing my IL's to rent the apartment out stating that you are only allowed to rent the unit for up to 2 years total for the duration that you own it. They also refuse to let the apartment be rented by family, which is who they were intending to rent the place out to now that we are no longer living there. I realize that rules are rules, but there are currently 4 units in the building that are for sale and have been for over a year, 2 additional ones that are under contract after being on the market for well over a year and the buyers need board approval, so a lot could go wrong with that. I personally feel the board should be flexible given the current market conditions.
The apartment was never ever updated when my IL's bought the place nor the entire time that we lived in it. They are the type of people who just refuse to 'spend money' on anything and H & I essentially felt that since we were not the owners of the apartment, it was not our resposibility to do things like redo the kitchen and bathroom. We were not expected to at all, btw - in fact they kept telling us over and over again to 'not waste money' on anything for the apartment. Now that they are being forced to sell though, they are trying to decide whether or not they should do any kind of anything to the place to make it more appealing to buyers - or just repaint it and sell it as is. I feel they should do something because the way the place is now, I think (excuse me, I know) a buyer would be turned off by it and I think the place will sit on the market for a long long time. My H thinks that buyers might actually want a place that is 'as is' so they can do the work themselves and make it their own. Either way, my IL's are not going to make any money out of the deal....but they have to continue paying $400 a month maintenance fee until the place sells, so I guess that they would lose in this case.
So what do you guys think they should do? Update the place and hope it sells quickly, but risk not really getting any return on their investment or try to sell the place as is and risk it being on the market for a long time? No matter how I look at it, it's a lose lose situation. I should also add that for some reason, they want to try to sell the place without the help of a realtor, which I think is not a good idea.....their reasoning for not wanting a realtor is because they 'dont want to pay a commission'.
I have no experience with selling a house, let alone a co-op. I'm just happy that we chose to ignore my MIL's 'advice' that a co-op would be better investment for us rather than a single family home because at least if we ever did decide to sell our house, we wouldn't have to deal with this kind of nonsense
Re: Need opinions re: selling a co-op
How does your inlaws' unit compare to the two that are under contract? With four other units available for sale, your inlaws will have competition. I would suggest that they update the unit only if the two that sold have been updated. Another option is to price it lower than market value or at a loss just to sell it quickly. Anything that is priced right will move quickly. In this case, they would sale the unit as is. In the long run, it may pay off if they do not have to pay the monthly fees for the 12+ months it sits on the market.
Other members of the co-op will not like this because their property value will be effected. There is a way to change rules in a co-op or condo association, but it is not always so easy to do. Sometimes it takes a majority vote. Review the bylaws to see how rules can be changed.
Either way, they should use a realtor so that their apartment can be MLS listed. The real question is do they want to make a profit which will require putting money into the unit, or just be rid of it.
Sorry, but your parents made poor decisions - not following the co-op rules, and also in not maintaing/improviing the property all while assuming this is going to make them money. PEople have to just top thinking of property as an investment that gives a good return. Sometimes it does and sometimes is does not!
They need to adjust to the fact that they are not going to make money on this.
Their options - move into the coop or sell at less than what they want
Then might want to at least talk with a realtor for advice on whether it is worth improving the coop prior to putting it on the market and get the information on recenet comps. Most people will actually do better working with a realtor than doing a FSBO.
They're a Realtor's nightmare. So in the end here's my prediction: They will overprice the unit and use a limited service provider or discount Realtor to sell the unit.
That's ok... but they should run some numbers! In the above scenario they will pay monthly dues, etc to own the unit for probably a year or more. If it's the cheapest unit in the building they might sell it a bit quicker, but my guess is that it's probably not up-to-date like the other units. So calculate the net proceeds after a heavy discount on the sales price and the cost of keeping the unit for a year with a discounted commission. Keep in mind that FSBO properties sell for up to 10% (assume 5%) less than properties marketed by a Realtor and take longer to sell.
Scenario 2 is to update the unit so that it looks like units in the same area and price range that have sold in under 90 days. It sounds like your in-laws are thrifty so they might be able to some of the work themselves or negotiate well with contractors. Make sure they use reputable contractors - there's nothing worse than paying for work twice. Go find the VERY top listing agents in their area and price range. Pay full price for the commission - no matter what they say Realtors don't work as hard on discounted listings. Take the price of what it's worth WITH the updates and subtract the cost of the full price commission and work to update the unit - that will give you net proceeds for scenario 2.
In the majority of cases scenario 2 will bring you a higher price and the probability of selling the unit is much greater. It's more work and frankly I doubt your in-laws will go for it, but it's how you sell a condo in a building with lots of competition. I've done it.
Good luck!
The last part of your response made me LOL because I'm just imagining them trying to live in a 500 square ft studio apartment. They own a house too, so obviously moving into the co-op isn't an option.
To be honest, I'm not entirely sure what the initial plan was for the place when they bought it...I think they purchased it from a friend for my H to live in, with the intention to sell it later, but of course the market crashed and no one could have predicted that. I moved in with H after we had been dating for 2.5 years, and I never asked too much about it because I just felt that whatever arrangement he had with them was between them. It's true though - they should have paid closer attention to the rules of the building and it's not like they didn't know that we eventually were going to move out....they knew for an entire year that we were moving and once we were under contract on our house they had an additional 3-4 months to figure out what they were going to do.
I realize it's not something to laugh at to see someone possibly lose money, but at the same time, I just cannot help but laugh at it because after hearing my MIL go on and on about how buying a co-op is a better investment, I bet she's not feeling that way right now....
The other units in the building are kind of a mixed bag....there's a lot of old people in the building, and a lot of the units have not been updated, but then as those people are dying off (morbid, but true - like 3 people in the building died in the last year), and younger people are moving in, those owners upgrade the apartments. The one directly above ours though - same size, same layout, not updated....was listed at 110k, and just dropped to 100k. It's been on and off the market for over a year - who knows when it will sell....apparently there was another studio apartment in the building that is updated and is under contract for 120k....not sure how much that owner put into it in terms of the upgrades or how much they originally paid for the place itself or how long it was on the market, etc though....then there's the other units in the building that are still for sale - but no pictures available on any of the realtor websites, so it is leading me to think that they are not updated at all....
Not just a realtor's nightmare
lol
Our neighbor in the building is a realtor and even he recommended that they use a realtor for the reasons you mentioned. Their response was 'we've done this before, so we know we can do it again'. Keep it mind, the last time they probably did something like this (assuming they were telling the truth), was probably like 20 years ago when things in the market were much different. My IL's are in their 70's, so you know...
I'm thinking at this point, they are somewhat open to the idea of doing some updating because my MIL was asking me what I think they should do. I was kind of at a loss though because while I think they should do some updates, I don't really want to see them take a bigger loss than they are probably going to take either...I don't expect them to get any kind of real return on the investment of updating, but if it helps them move the place quicker so they aren't eating the cost of maintenance every month, this might be the best solution. The next time H & I see them, we will sit down with them and help them go over numbers to see what will work the best....
Thanks everyone for the advice
This is where a realtor and/or a stager would really come in handy. They could help your in-laws focus their money on the improvements that would help resale and avoid the ones that won't.
Also, sometimes it's not about updates, but just in how the property is staged. ie. places with furniture sell faster generally than places without. You also have to get in the mindset that this is something you are trying to sell, not somewhere you're living. So get rid of all your pictures, knick-knacks, other personal items. If you painted a wall bright green because you thought it was good, repaint to a neutral color.
Yea, all of the furniture is gone now, so the place is empty except for a few rugs that are still there. They plan on having the walls repainted I think just to freshen up the place....the existing walls are just a drab dull off white color - we never bothered to change it when we lived there because, well, it wasn't really our place to change, so instead we just had art hanging on the walls, which has since been removed when we left. Should be interesting to see what they decide to do in the end...