by Kim Kash, Greenbelter and Realtor with Caprika Realty
A couple of weeks ago I wrote about WHY to buy in a cooperative housing community, and specifically our very own Greenbelt Homes (GHI.) For an overview of the key features and benefits of cooperative living, I hope you’ll find some good information there.
So, does life in a park-like, eco-friendly, neighborly, fun, artsy, Metro-accessible, affordable and super-convenient community sound right for you? (I mean, when you put it that way….) If so, read on! In this article we’ll dive into the nuts and bolts of HOW to buy in GHI.
Like any real estate transaction, there are many steps, lots of details, and quite a bit of overlapping to-do’s to keep track of. I often refer to living in GHI as “home ownership lite” because the co-op takes care of so many maintenance tasks that other homeowners must deal with themselves. However, buying into the cooperative is more time- and labor-intensive than a standard home purchase. It’s important to understand that going in, so that you can manage your expectations about this process.
You can get through this. It is definitely worth it.
Here are the steps that a buyer will ideally go through to make their first GHI purchase. Life doesn’t always happen in order, of course—you may drop into an open house one weekend, fall in love with it, and have to have it. In which case you’ve skipped down to Step 3, and you’ll have to backtrack. That’s how it goes sometimes. But here’s the ideal order of operations:
First, choose a great real estate agent! This is not just me tooting my own horn, seriously. It’s important that you work with an agent who is well-versed in how to purchase in the GHI community. It’s not rocket science, but there are many additional steps to a GHI purchase versus a regular single-family or condo purchase. If your agent isn’t familiar with these steps, you may be in for a bumpy ride. And as with other real estate purchases, the buyer’s agent is generally paid by the seller, even though they represent the buyer. (Sweet!)
Your agent will help orchestrate a lot of the details, once they get an idea of what you’re looking for and your budget. They will also connect you with one or more of the lenders working within the GHI community. There is a list on the GHI website of all the possible lenders who can help buyers with a GHI purchase, so be sure to check the list to find an approved institution. Within that list, your agent will have a better idea of which one might best fit your needs—whether you’re a first-time homebuyer trying to piece together a down payment, or an empty-nester considering a shorter-term loan.
Step 2. Apply for loan pre-approval
Apply for loan pre-approval with your chosen lender. Look at some more houses with your agent. When you find the right home for you, it’s important to already have a loan pre-approval letter from a GHI-approved lender. You need this so that the seller understands that you are a serious, qualified buyer.
Step 3. Attend a GHI Orientation
Attend a GHI pre-purchase orientation. The cooperative holds these information sessions about twice a month, and attendance at one of these is required by GHI for all new buyers. This is a great opportunity to learn how the co-op works, and to ask questions and meet others who are also considering ownership.
Step 4. Find Your Home and Go Under Contract
Keep shopping until you find the right house! When you find it, your real estate agent will help you make an offer. The contract of sale will look just like a typical real estate contract, with the additional special GHI addendum that spells out the cooperative nature of ownership and names the monthly co-op fee and other costs associated with buying your particular unit.
Step 5. Turn in Your GHI Membership Application
Immediately after you go under contract, you will complete a GHI Membership Application and turn it in to the GHI offices at 1 Hamilton Place, together with your application fee. This is old-school: no online application or payment method is available. The application will ask for a lot of the same information that you’ve already provided to your loan officer (so that should be easy.) It will also ask you to provide contact information for several people who can provide personal references for you.
Step 6. Have a Home Inspection
This is an optional step, but recommended. You can hire a licensed home inspector to provide an extensive report on the condition of the home you’re buying. If any significant issues are found, the seller and/or GHI will be notified and may (or may not) make these repairs. A home inspector will also talk to you about regular maintenance of the systems in your home. This way you’ll get a great resource on how to keep your home in good order, and you’ll better understand when to alert GHI of any maintenance issues that come up once this is your home.
Step 7. Try to Relax, as GHI, Your Lender, and the Attorney Get to Work
Your loan officer will be working on the approval of your loan for this particular home. Yes, you’ve been pre-approved as a buyer, but your lender will do an even more thorough review of all of your finances for final approval. They will also arrange for an appraisal of the home, to ensure that they are not loaning more than they feel the home is worth.
Meanwhile, GHI will review your application information and contact your references. When ready, the contract processing department will schedule an in-person interview with you, to make sure all of your questions are answered about GHI and the house itself. Once the in-person interview has happened, your name will be presented to the GHI Board of Directors for approval at its next board meeting. This is a ceremonial final step in the membership process, with several names being listed and approved at every Board meeting.
While all these things are happening, an attorney will be doing a title search and putting together the necessary documents for settlement day. Currently there are two settlement attorneys who handle GHI transactions, both located in Greenbelt. They will ask you to fill out documents necessary for the sale. Your job is to respond to them, quickly!
Step 8: Go to Settlement
Settlement Day usually comes about 45 days after you go under contract. A GHI purchase takes longer than a fee-simple or condo purchase, so don’t panic about this timing. Forty-five days gives everyone time to complete all the steps before closing. At settlement, the buyers, the sellers, and a GHI representative come together at the attorney’s office to sign all documents and hand over keys. Buyers receive an up-to-date green GHI Member Handbook containing a trove of useful information, and sellers turn in their old handbook.
Step 9: Get Active
Maybe you thought settlement was the final step, but there’s more! Much more! One of the cornerstones of GHI membership is being an active community member. At settlement, you’ll be given information about the many committees and volunteer opportunities available to co-op members. Greenbelt Homes is a great place to live because of the active contributions of its members. So, after the boxes are unpacked and the dust is settled in your new place, the next step in your process as a new GHI member is to get involved! You’ll accomplish new things along with your neighbors (like me and my family!), maybe learn some new skills, and make Greenbelt an even better place to live.
GHI is not necessarily for everyone—it takes more work to buy here, and there is a hope and an expectation that members will contribute to the vibrancy of our community. I speak to many homebuyers who are searching for a community, and not just a random house to buy, and for those buyers GHI can be just the thing. If you are ready to step into an engaged, neighborly lifestyle, then buying into GHI could be one of the best decisions of your life.
An Equal Housing Opportunity