Requirements list on typical purchase application
To paraphrase Lloyd Bentsen, when I make a mistake, it’s a doozy. So it was with this post. Please see correction below, now reflected in headline.
A broker friend of mine confided in me her anger at another broker.
It seems that the broker listing an apartment wasn’t happy with the board package. My perfectionist friend, a highly successful broker of close to 30 years, had assembled the thing for her buyer and sent it to the other woman for review.
Without a comprehensively and competently presented package, as most consumers here know, the likelihood of a board’s accepting a prospective shareholder into the building is greatly reduced.
My friend, call her Emily, had painstakingly put together the thick packet, having gone over and over her buyer’s numbers; collected, copied, collated and ordered the usual materials; inserted dividers; and added a table of contents.
In an e-mail, the listing broker essentially ordered Emily to make changes that did nothing more than illuminate that real estate professional’s ignorance. Here are a few examples:
- Although the long list of required information did not mention the necessity of including an application form, one problem she saw was that it was in the wrong order — because my friend had correctly added the formal application where it belonged, in front of the contract;
- The listing broker noted that the list included a reference from the buyer’s landlord and couldn’t understand that a reference from the property manager of the condo that she owned was the only way to fulfill that requirement;
- She insisted that asterisks be added to explain something that already was detailed in two other places.
Never mind that the listing broker was wrong in her demands and offensive in her rude approach.
What she doesn’t realize and almost every broker in town doesn’t know is that giving listing brokers an opportunity to review board packages is not a requirement.
Doing so is nothing more than a courtesy that takes into account the interest of both parties to a transaction to maximize the chance of a co-op board’s approval of a buyer’s application.
I have skimmed state statutes governing real estate brokers and agents and found no applicable requirement. Nor did I find anything in the Real Estate Board of New York’s (REBNY) Code of Ethics and Professional Practices.
In fact, REBNY arguably restricts the sharing of a board package. The Code states that members “shall not. . . without the client’s informed consent, disclose confidential information of a client to any third party.”
Sharing board packages before submission to a co-op board may be a local convention, but it certainly isn’t one that should be viewed as an obligation.
Correction: As my friend, broker and blogger Sandy Mattingly helpfully points out, my mistake was failing to check REBNY’s Universal Co-Brokerage Agreement, which I’ve never had occasion to read and which states:
Broker is responsible for delivering a completed board package to the Exclusive Agent and to provide the Exclusive Agent with a reasonable time to review the completed board package prior to submission to the board of the building.
I’m mortified. Sorry!
Tomorrow: Key question
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Malcolm Carter
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022
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Malcolm@ServiceYouCanTrust.com
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