Did You Agonize Over Your Co-Op Application Only to Be Rejected? You Are Not Alone, Friend!
Gloria Vanderbilt, Richard Nixon, and Joan Crawford were all turned down by co-op boards! The. Nerve. Mommy Dearest can’t even catch a break.
Let’s refresh on condos and co-ops. They both require an application which gets reviewed by the board. But the condo board can’t just reject an application. Their only options are to waive their right of first refusal and proceed with the sale, outright exercise their right of first refusal and purchase the unit, or ask for more info during the application review process and slow things down.
Co-op boards, on the other hand, review applications and conduct in-person interviews and can reject the applications of potential buyers.
Before you make an offer on a co-op, your real estate broker will prove to be a major asset by being extremely familiarwith the co-op board’s preferences and expectations. As you progress in the process and make an offer, your broker will also help you maximize your appeal to the board and polish your whole co-op board package. Let’s find out more about this board package business below.
Taking the Leap: Submitting Your Co-Op Application
Here’s a timeline of how things will go down.
- You’ve found ‘the one.’
- Make a preliminary offer.
- The seller accepts.
- The seller’s broker sends you a copy of the co-op board’s application.
- Follow the application’s directions to document your finances and job and personal histories.
- Sign the purchase agreement.
- With the help of your Caliber agent, put together your board package.
- This package is the whole kit-n-caboodle that proves to the board that you’ll be a fab new neighbor and a fiscally sound owner of their co-op’s shares. Your agent will help it look as glowing as possible.
- Each package will have differing requirements, but expect to need the following kinds of documentation.
- Tax returns.
- Release forms related to checking your credit situation.
- Contract of sale.
- References from your bank and prior landlords.
- More references! From business associates and personal friends. The board will want to know your relationship to these folks, how long you’ve known them, and why they think you will be an awesome neighbor. People you have had long, positive relationships with are good choices.
- If you’re allowed to submit a cover letter with your package—do it! Some don’t allow it, but if you have the opportunity to include one, it allows you to make a more personal connection and show the person behind all of those documents. In your letter, let the board know why you would like to live in that particular building and share some things about yourself. Check in with your broker about this.
- Your broker will submit your board package for you.
The Next Step: Preparing For Your In-Person Interview
Woo hoo! This is a milestone, really.The board has looked at your board package and if they didn’t like it—you wouldn’t even be interviewing. Relax, be yourself, and treat it like a job interview. You’ve had those before so you’re already a pro. You will most likely meet with 3-5 members of the board and it will just be you and, hopefully, your future neighbors at the meeting. Agents and attorneys and such aren’t normally in attendance.
The board will utilize the interview to ask any questions they may haveabout things in your application. Do you own properties nearby? They may enquire. Before your interview, look at the application again and anticipate what questions they may ask. If you do this ahead of time, you can have answers at the ready and have the serene assuredness of a person who has come prepared. You’ve got this. Be honest and pleasant. These folks just want to know more about you and if you will be a good neighbor. Dress business or business casual. Check in with your broker—they will know what the board’s vibe is and can advise accordingly.
- Be on time. First impressions and all of that.
- Refrain from asking obvious questions that you should know the answers to.
- Refrain from chatting about anything that could be misconstrued as a criticism of the building or management. Keep it low key and don’t mention any renovations you have your eye on or how such and such could be run better.
- Be courteous and polite, but remember that less is more. Refrain from volunteering a bunch of unsolicited info.
- Answer questions clearly and to the point.
- If someone annoys you, keep your cool.
- In case they ask if you have any questions, be prepared to ask neighborly kinds of things like where’s the best brunch spot and what drew them to the building. This isn’t a time for deep cut questions.
Buying a co-op is definitely a process and sometimes a gamble. You can really up your likelihood of approval by doing your due diligence—research, prepare for each step, and utilize the team on your side aka your Caliber agent.