The Medium Is the Message

Every week my Sales Directors and I look at numerous Board packages, those daunting sheaves of documents required by co-op and condo Boards as they deliberate the appropriateness of an applicant to their buildings. In some ways the process is highly anachronistic. It resembles applying to a private club whose directors are free to accept or reject any applicant without having their motives or the legality of their decision scrutinized (although in theory co-op Boards are as subject to anti-discrimination laws as any other landlord). But in some ways the process has been vital to the enduring financial health of real estate in New York during the recent meltdown. Strict co-op Board guidelines regarding both the amount of permitted borrowing and the financial circumstances of applicants have meant more qualified buyers and more equity in our marketplace, leading to fewer defaults and distress sales. So the system is not all bad.  However, the Board application process tends to intimidate most buyers and many agents, but it is not really so complicated. Here are a few pointers:

* As a buyer, always start thinking in advance of purchase about the elements of your package. Understand that full financial disclosure will be required.

* Plan your letters to cover all the points of your personal and professional resume: family, children, leisure, philanthropies, and moral character as well as job responsibilities and accomplishments. The letters should create a full, well rounded picture of who you are.

* When preparing the financial information, remember that everything has to tie together. The numbers on the statements have to match exactly the numbers on the bank statements and other back up documents, and there must be back up documents for every number on the statements. Do you have a summer house? You need an appraisal or broker letter to verify the value. And we will need insurance estimates for your grandmother’s diamond necklace (if you are lucky enough to have it) and the Renoir as well.

* Do you own your own business or other assets which are difficult to quantify? The Board will need a letter from your accountant explaining the valuation methodology he is using and whether it is standard for the industry.

Every buyer is well served by creating a perfect Board package. And the more perfect the package is, the better the chances that the Board approval process will be smooth and relatively painless. The one indispensable ally a buyer needs-a savvy broker who understands the intricacies of assembling the package. Having a knowledgeable broker, and listening to what she says, can mean the difference between success and failure in running this most New York of all gauntlets!