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Few things cast fear in the hearts of prospective buyers as much as co-op boards and everything associated with them: the application, the interview, revealing the entirety of one’s financial history, and more.
But co-ops are usually more affordable than condos. There are also a lot more of them, so chances are, if you’re in the market for an apartment, you’ll probably at least consider a co-op at some point.
And rest assured it is quite possible to get approved by a co-op board.
“Boards come in all types and temperaments, so the first step is to find a co-op building that’s best suited to your situation and needs. Then prepare the best application possible, and get ready to roll with a few minor punches,” says Robert Doernberg, senior managing director in Corcoran’s East Side office. “Given the complexity and subtleties involved, it’s essential to work with an experienced real estate agent who can identify buildings that are the best fit and position you in the best possible light as a financially responsible buyer and upstanding future neighbor.”
Here’s what you’ll need to show.
Before you start looking to buy a co-op apartment in NYC, calculate how much money you will have leftover in the bank—known as your “financial reserves”—once you buy it. Boards typically want six months to two years of maintenance and liquidity after closing.
“That’s a real eye opener for most people who are not familiar with Manhattan boards, especially young buyers,” says Elyse Gutman, a broker with Corcoran.
A board will also look at whether you’ve just switched jobs or have a lot of outstanding credit card debt. Debt related to tuition for school or a car loan isn’t an issue, but “a large credit card debt, or limited funds in the bank, will be a red flag,” says Kelly Neinast, a Corcoran broker who works primarily in brownstone Brooklyn and Queens.
Numbers that add up
A co-op requires detailed paperwork outlining your personal and financial information. Neinast says newcomers can find this part of the application process intimidating but says there’s a lot of overlap between a mortgage application and a board package.
“If you work with a broker from Corcoran, we walk you through every single step of the process. We’ll put the whole package together for you,” says Neinast. “We go through everything to make sure it looks perfect. The last thing we want to do is send in a board package that is not complete because they will come back to you for the information.”
When your application package is in front of the board, it should be clear and easy for them to understand. The numbers need to match down to the cent.
“A red flag would be if you state you’ve made a certain amount of money but your tax return don’t match that,” says Gutman. The same goes for any stocks or retirement accounts as well as your salary. “It all has to add up,” she says.
You’re the right fit for the right building
An experienced broker will be able to match the right buyer to the right building. Gutman does a lot of work on the Upper East Side and says with 20 years of experience “you become very knowledgeable, very quickly on the buildings in the neighborhood.”
Likewise, Neinast says, an experienced agent knows exactly what each building requires post-closing, what amenities they offer and who is likely to be accepted by the board.
A clean personal history
In your board application, you’ll be asked about arrests, or whether you have you ever been sued. Gutman says this is a board's way of “filtering out anything uncomfortable.”
“More scrutiny just means more protection for you when you are in the building,” says Neinast.
Proof you’re a good neighbor with professional relationships
The application package requires reference letters, both personal and professional. If you’re buying as a couple, you’ll typically both have to provide separate letters.
Corcoran provides a co-op board sampler which Gutman says has “examples of letters, so you can get an idea of what they need to say.”
The letters should include how long the person has known you, what their relationship to you is, and if it’s a professional letter, describing you as such.
“If it’s a personal letter, it needs to describe you as a good friend or a neighbor. You really want these to be heartfelt because that’s the only personal information, other than the cover letter, these board members will get of you,” says Neinast.
“References to how philanthropic you are can also hold some clout,” says Neinast. “You’re trying to prove you are the kind of person they would want as neighbors.”
A great interview to match your application package
If you’re turned down, it will probably be before your interview, based on your application package. But you still need to bring your A-game to the interview.
“Treat it as if it is a job interview,” says Neinast. “It’s not the time to talk about how you don’t like the decor in the lobby. It’s for the board to ask you questions and get to know you.”
Know your package inside out because there’s a good chance the board will ask you questions about it.
Show respect, advises Gutman. “There are lots of young couples who are very casual. Don’t wear jeans and sneakers. It’s not wrong, but it’s not respectful,” she says.
“At Corcoran,” says Gutman, “we have 10 pointers to help you pass a board interview. We send that out for you to review and then your agent will sit you down and discuss it to put you at ease.”
Welcome to New York! Visit corcoran.com today to take the next step toward getting into the right home for all your needs.