The curse of the co-op strikes again!

The apartment my clients are under contract to purchase.

If there’s anything worse than preparing for a tax audit, it has to be putting together a co-op board application.

I spent three tortured hours the other day going over a packet prepared by clients of mine.  What I discovered did not surprise me:  Like most others in their situation, this couple had problems fulfilling the exacting requirements for providing the documents on a long list.

Seeking to ensure that the buyers will be good neighbors who pay their bills, co-ops differ from condo boards in demanding such an absurd amount of information.  The packages of that information, which seem to contain everything but the details of applicants’ sex lives, easily can run two or three inches high and multiple copies must be furnished.  The scrutiny partly explains why condos are sold for a premium over co-ops.

My clients are under contract to purchase a one-bedroom apartment on Manhattan’s Upper West Side for only a little more than $400,000.  Yet the unholy burden on them to provide comprehensive information covers 20 separate items:

1.  Copy of purchase application

2.  Application fee policy

3.  Fully executed contract of sale

4.  Mortgage commitment letter

5.  Recognition agreements if financing (they are)

6.  Copy of loan application

7.  Net worth statement with supporting documents

8.  Employer reference letters or, for the self-employed, letter from accountant

9.  Copy of last two years’ state and federal tax returns, including W-2s

10.  Two bank statements

11.  Three personal reference letters from each applicant, thus six

12.  Landlord reference letter if previous home not owned

13.  $350 non-refundable application fee

14.  Flip tax calculation worksheet with supporting documents (from seller)

15.  Signed credit-check waiver

16.  Signed acknowledgment of house rules and bylaws

17.  Lead paint disclosure form

18.  Tenant emergency information sheet

19.  Window guard form

20.  Signed acknowledgment of fire safety plan

Nothing is more important than the financial information, and I had several times advised my clients that the numbers from their brokerage, pension and bank statements had to be added correctly and match the data they entered in their financial and net worth documents.

One reason I spent so much time on their submission was that the numbers didn’t track, documents were missing (e.g. W-2s, five of the reference letters, the check for the application fee, dates on everything and signatures on their tax returns.

Another reason, for which I can hardly blame them, nothing was in the correct order even though they had tried to assemble documents according to their own sense of what belonged where.  So it was left to me to scramble and sort everything while trying to monitor what was absent.

I’m not complaining–the task is one of the things for which buyer representatives are paid. Okay, I am complaining.  It’s one of my responsibilities that I hate most.

I’m not alone. The male half of the couple declared when I returned the edited package to him, “I am never, ever buying a co-op again.”  Said I, “Of course you will.”  Forcefully, he responded, “Oh no, never again!”  I believe him.

Our conversation took place in the lobby of his current abode.  He was carrying his ailing dog on the way back from visiting a veterinarian.

A half hour later he sheepishly contacted me:

“My dog threw up.”

“On the package?” I stammered, horrified.

“Um, yes.”

“Can you wipe it off?

“I think so.  Was everything in sequence?”

I haven’t heard since from him to discuss this unpleasant version of the dog ate his homework.  I think he knows better.

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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

M: 347-886-0248
F: 347-438-3201
Web site

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