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Jessica, Home Buyer in Westchester County, NY

What type of information do co-op boards usually request for prospective buyers?

Asked by Jessica, Westchester County, NY Tue Dec 15, 2009

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In my experience, most co-op boards require a complete financial package, income, employment, savings, mortgage (if applicable), a copy of the contract of sale, acknowledgement and acceptance of the Board's House Rules, debt to income verification and qualifications - each co-op has different guidelines for debt to income. Some are as strict as no greater than 25% others use ratios, mortgage and maintenance debt to income percentage and then including all other debt can be a slightly higher number. One thing to be aware of, student loans and car leases are included as debt. In some instances, a prospective buyer may qualify for a mortgage and not meet the financial guidelines for the co-op. Usually a background check is completed and there are some co-op's that will include a criminal background check. A felony conviction is grounds for denial. It is typically the job of the management company to screen the application package before it is presented to the Board for approval. This saves the board and the applicant a lot of time because if the applicant can't qualify, there is no reason to meet with the board.

When considering the purchase of a co-op, get all this information in advance. If you can't qualify, consider the purchase of another property. Co-op Boards have to be strict.

Catherine Cornelia Real Estate specializes in co-op properties, including, but not limited to, Interlaken Gardens and Channing Place located on Lake Innisfree (Lake Isle) in Eastchester, NY. Please check out our website for additional information.
Web Reference: http://dreamccc.com
0 votes Thank Flag Link Wed Dec 16, 2009
Dear Jessica,

Here is a list of things they are looking for:
(1)Credt Report of Fico Scores greater than 680.
(2) Financial status:Proof of Income,Tax Returns-W2,Pay Stubs,Bank Statements,401K,etc.
(3) Letter of verification of Employment
(4) Personal References and Employment References
(5) Preapproval Mortgage Letter

Hope you have a great day!

Thank you,

Lisa Loeb
http://www.GrandLuxRealty.com
914-582-2904
1 vote Thank Flag Link Tue Jul 10, 2012
As a treasury for a co-op, I believe many people made it seem like it is hard to appear in front of the board. The co-op looks for all shareholders interest and the new potential shareholder as well. They ask general questions relating to your income, your credit score, current salary and go over the house rules and so on.
0 votes Thank Flag Link Fri Sep 21, 2012
As a treasury for a co-op, I believe many people made it seem like it is hard to appear in front of the board. The co-op looks for all shareholders interest and the new potential shareholder as well. They ask general questions relating to your income, your credit score, current salary and go over the house rules and so on.
0 votes Thank Flag Link Fri Sep 21, 2012
Hi, here is a blog post I created regarding the coop process, it should answer alot of your questions.

I have been receiveing alot of questions about Coop Apartments, what they are and how the operate. A Coop is a corporation made up of all the occupants of the building. When You buy a Coop you are not buying an actual unit, you are buying shares in a corporation. You will receive a stock certificate and a proprietary lease which entitles you to occupy the unit.

Since the occupants do not own the unit they do not pay property taxes like you would in a condo or house. You pay a monthly maintenence fee wchich includes your pro-rata share of the buildings property taxes, and care for the grounds, etc. If in NY you will qualify for the basic STAR reduction but will have to inquire with your particular Coop to see how they handle it. There are additional fees that vary from parking, assessments, flip tax, storage, etc. Again each building is different and you will have to inquire about any additional fees. There is a percentage of your maintenece that is tax deductable, usually 45%-55%, but it can vary. There is always a minimum down payment requirement which can range from 10%-50% down, depending on the Coop. Nowadays alot of Coops are requiring 20% down to protect themselves and make sure only the qualified apply. Even the banks are requiring this so times have changed a bit. On occassion you will find a "Sponsor Unit" available. This is a unit that is on the market by the sponsor for the first time. These are highly sought after because they usually don't require a board interview. This is good for the first time only, the next time it goes on the market a board interview will be required. Keep in mind just because at first you don't need an interview the board usually still looks at the package.

When purchasing a coop part of the process is a board interview. Many people get scared and worry about what it will be like. Once you have an accepted offer on a unit you will receive a board package to fill out. This includes a standard application, request for financial information (bank statements, W-2s from previous and current years, pay stubs, etc.) Here are a few major things the board will look at...1) Amount of down payment, where it came from, and how much you have in reserve after making it. Most Coops want to see a few months reserves at least. 2) Credit scores, do you have any judgments against you, how much debt you have. They look at your "Front End Ratio" which is how much debt you'll have with just housing payments and "Back End Ratio" housing debt along with any other existing debt you have; credit cards, loans, etc (student loans sometimes get deferred, you'll have to inquire). They will have a debt-to-income ratio requirement which can vary. 3) Current Income is important as well, they want to see that you make enough and aren't spending everything you have to pay your bills. Having alot of cash in the bank doesn't impress them, that can be spent quickly. You will also get a copy of the by-laws (house rules) and the offering plan. The offering plan tells how many units are in the building, what the exisiting mortgage is on the building, how much the building has in reserves, etc. You will have a chance to review these with your attorney to make sure you are buying into a financially sound building.

The application can be a bit intrusive but the Coop does this to make sure that they don't take on any financial liabilities to the building. They will only hurt the corporation. Once the package is complete it can be submitted for the managment review and once they approve it, it's then passed on to the board members. Once the board reviews you will be contacted to come in for an informal interview. They might ask questions regarding your motivation for buying in the building, questions about your finances, or just general questions to get to know you further. They will have a pretty good sense of who you are by your package already.

My advice to you...stay calm, don't over answer their questions, be positive! At times you will find out right away if you are approved and others you will be notified the next day, or so by the management company. The approval needs to be in writing and sent to the attorneys on the deal to make it official. Once approved you can finalize everything with the bank and setup a closing. I hope this answers some of your questions and I welcome any further inquiries.
0 votes Thank Flag Link Wed Oct 26, 2011
They may also request a letter of recommendation from your boss, your landlord, and others who can give you a character reference.
Web Reference: http://sallykgriffiths.com
0 votes Thank Flag Link Wed Oct 26, 2011
Co-op boards are interested in getting buyers who are suited financially and can keep up with their payments . They usually request Tax returns, salary stubs and proof of funds. Credit score is very important as well.
If I can help you in any way , please call me at 914 589 2455 .

Gladys Viruet
Keller Williams Realty
0 votes Thank Flag Link Wed Oct 26, 2011
I will just add to Melanie's answer by saying that boards won't meet with a prospective buyer until they have a mortgage commitment letter from the buyer, or verification of funds if it is a cash deal.
0 votes Thank Flag Link Wed Dec 16, 2009
Most boards have application packets for prospective buyers. They ask for information about your employment, income, savings, investments, assets, & debts. They usually want a letter of employment, bank statements & tax returns to verify the information.

Some applications are only a few pages long, others I've seen are in excess of 30 pages. It just depends on the board & management company.

Hope this helps
0 votes Thank Flag Link Wed Dec 16, 2009
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