Cohousing-L Mailing List: Re: How do you deal with resale

[BARANSKI (BARANSKI]

From: phalpern [at] world.std.com (Pablo Halpern)
Subj:   Re: How do you deal with resale

  Once the initial membership has moved in, New View will create a new class of
  member (called "associate member," for now) which will have some privilages
  and responsabilities but not as many as a full, resident member.  At the very
  least, associate members would be invited to some common dinners and other
  events and have some use of common facilities but they would not live on the
  site and would probably have limitted consensus-voting rights.  The important
  thing is that the associate members would constitute an expanded communitty
  of people interested in cohousing with whom we would be in close touch.  It
  is our hope that people will be able to sell their units more quickly and
  without realtor's fees by using the associate members as a pool of potential
  buyers.

This is a great idea, maybe even essential to continuing success.  It gives
people time to become part of the community instead of just walking in off the
street.

  Without further refinement this idea has several problems.  For example, no
  matter how long someone has been an associate member, they can be outbid for
  a house by a much newer member.

I guess my idea of how to handle this is to get some outside realtor appraisals
and try to estimate a fair market value of the seller's share.

The community gets first chance to buy back the seller's share at this price. 

Other interested new members may submit bids, and the community as a whole
chooses which new member and bid to accept.  They may not want to accept the
highest bidder, or the longest standing member, but may want to take both of
these factors into account of their decision.  

This could cause lots of fighting if it can't be done in an objective manner.
But basically, either you are going to attempt to make this decision ahead of
time by making rules which aren't going to always work out well, or it's going
to be a different decision each time as the situation changes.

The community might pay half of the difference between a low bid and the FMV, or
take half of the profit from the difference between a high bid and the FMV.

If there's no ready takers associated with the community, then it's on the
open market, but the community can reject people, or require they go through
the community acceptance process, activities, which may take some significant
time.  

In this case, I think it's in the community's interest to buy the share, or at
least take over that share of the mortgage, and rent the space to a prospective
member until they feel certain the new person is right for the community.

Jim.