Bored with the Board?
It has been a bad period for Board turndowns. In the last few months, we at Warburg Realty have lost several major deals because of co-operative Board decisions; several more have been fortuitously snatched from the jaws of defeat by industrious agents who would not take “no” for an answer and managed to get the decisions reversed. In the latter cases, the Board saw financial issues which could have been resolved by asking the applicant a couple of questions, but rather than clarify, they voted to reject. It is as if they forget that actual people’s lives are at stake. As a former Board president myself, I know that in the confines of the Board meeting it is easy to forget how profoundly distressing a Board rejection can be to both buyer and seller. Boards should only use this measure as a last resort. The number of prospective buyers who go on to be excellent tenants, even excellent Board members, in a second co-op after being rejected at a first demonstrates the gratuitous nature of many turndowns. But as agents more often than not we are powerless over this outcome after the package is submitted.
While the package is being prepared, however, the agent has the opportunity to wield substantial influence. This influence can make the difference between a perfect package and one which raises questions in the mind of the Board. Preparing the package is like staging a military campaign; it requires both a plan and a strategy. And what we need while we are doing this planning and strategizing, more than anything, is the co-operation of the principals, most particularly the buyer and the buyer’s attorney.
For most buyers the preparation of the package is an inconvenience to which they want to devote as little time and thought as possible. Even if they know from the beginning what the process is, even if they have served on the Boards of the buildings in which they currently live, the completeness of the information required always comes as a shock and an irritant when applied to THEM. And we as agents understand this. But it is our job to manage this frustration to assemble the most complete and well organized document we can. So herewith a few recommendations:
– Make sure your lawyer provides you with enough time to prepare a good package. Usually 15 business days will suffice. And just as your lawyer should negotiate your contract, not your agent, your agent should prepare your package, not your lawyer. They are good at what they do, we are good at what we do.
– DON’T write the personal letters yourself! And don’t send all your friends the same sample letter either. We consistently get letters all of which are written in the same font, or use the same words, refer to the same experiences, sometimes even contain identical paragraphs. As you can imagine, this doesn’t impress Boards much! What you, as the buyer, should do is figure out who amongst your friends writes well, and which five or six of them can write about different aspects of your life – your kids (if you have them), your family of origin, your philanthropic work, and anything else you feel will give these strangers a well-rounded picture of who you are. And always get extra letters. At least one is bound to be a dud!
– Ideally the letters, both personal and business, are between a page and two pages long. The writers should introduce themselves so their identities are clear. One or two sentences of introduction suffice. I am not a fan of the letters in which the writer devotes ¾ of the space to touting HIS credentials.
– For the financials, pick a date, usually the last day of the preceding month or the month before that. Gear every piece of documentation – bank letters, bank statements, appraisal letters etc .– to that date. And remember every Board contains at least one financial compulsive who will review the financials with a fine tooth comb. So you must be precise. The numbers on your Financial Statement should correlate EXACTLY to the numbers on the back up bank, brokerage, and appraisal letters you include.
– Above all, be patient and listen to your agent. Assembling this data into the coherent format which gives the Board a true and accurate picture of who you are and what your circumstances are takes time and effort, and it IS invasive. But in the end you get the home you chose, and in which you will hopefully live happily for years to come. A little inconvenience is not so high a price to pay for such a good result.