Sometimes buyers want to understand what they are getting into when buying a cooperative.
They have to get “approved” by a cooperative. What does this mean?
Just like in
a country club, a membership committee reviews your entire financial and personal lives, and decides if you are worthy of moving into
its established community.
You disclose everything, and the committee doesn’t have to disclose why it rejects you.
Yet this process has maintained property values through many market cycles.
The miniscule default rate on cooperative loans is a testament to the strength of buyers who pass through this “ordeal.”
We work with our buyers on board packages, and actually manage the entire process for them.
When we represent listings, we often will work with the buyers, if they do not have a broker on their side of the transaction.
If this is a first time coop purchase, and you want to understand the process in 60 seconds- here we go:
The board package is generally divided into three sections: (1) the coop’s application, (2) the financial worksheet and supporting documentation, and (3) personal and business reference letters.
(1) The application is what you think it is: filling out
pages and having signatures by buyer and seller, mostly.
(2) The financial worksheet and supporting documentation is mostly an accounting and administrative operation, making sure that all of the numbers are accounted for and supporting documentation is in place.
This is done closely in concert with your real estate agent (me and my team).
(3) Lastly, the reference letters are personal and business letters written on your behalf by people who have known you for many years.
Ideally, these are written by coop owners who live in top NYC buildings.
But close friends you’ve known forever work will write nice letters, or well-known people from outside NYC can work as well.
Most people can find 3-6 people to say nice things about them, so the nuance and subtlety lies
mostly in what isn’t ever written down about putting together the board package.
If you have already gotten a signed contract, that means normally that the listing broker feels you will pass the board, and your broker does as well.
We will have already “vetted” you- our job is to make a good match between you and the building!
That’s really it!
The key is
matchmaking people with the right buildings, and presenting them in the right way to a board.
Your broker’s input is crucial in this regard!
For a more detailed explanation about how this process works, please call our offices at 646-504-5710 or email us! firstname.lastname@example.org