Buying a co-op and I don't want to disclose finances (Glen: coops, building)
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Co-op boards are not on a "power trip" as someone mentioned above.They are protecting their own and every other shareholders investment in the building and much of what has unfolded in the last year or so proves that it is a wise strategy.Personally,especially given what I have seen recently,I wouldn't buy into a condo.They are having many more foreclosures than co-ops and you might think it doesn't effect you in a condo but if a unit in your building shows up on the realty trac foreclosure list you will find out that it does.
Oh, I would call it a power trip when someone has $6M in cash(not to mention additional millions in stocks, real estate, etc) and is rejected when trying to buy a $1.3M co-op because he's not "building material"....ie, not on the same social status as the models/ directors/ Rockefeller & Vanderbilt grandkids who live in the building.
Too bad because it was a gorgeous unit with a view of the Washington Square Arch!!
even when i submitted to my mitchell-lama co-op, they throughougly checked me and my whole family's history...especially our credit reports. it was worth it in the end. it feels invasive, but at the end of the day i trust they have the best interests of the complex at hand.
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Oh, I would call it a power trip when someone has $6M in cash(not to mention additional millions in stocks, real estate, etc) and is rejected when trying to buy a $1.3M co-op because he's not "building material"....ie, not on the same social status as the models/ directors/ Rockefeller & Vanderbilt grandkids who live in the building.
Too bad because it was a gorgeous unit with a view of the Washington Square Arch!!
That's just old fashioned snobbery.
Most good real estate brokers know what buildings are like that and don't show apartments in those buildings to socially unqualified people.It's repulsive but you can't force yourself on people who would rather not be around you. And who wants to bother ? It's really the brokers fault that your friend got to the point of being rejected.
Was your friend's money made on Wall Street ? I have heard that a lot of buildings are rejecting anyone with new Wall Street money on the grounds that it could literally evaporate quickly.Not "solid" enough.
That's just old fashioned snobbery.
Most good real estate brokers know what buildings are like that and don't show apartments in those buildings to socially unqualified people.It's repulsive but you can't force yourself on people who would rather not be around you. And who wants to bother ? It's really the brokers fault that your friend got to the point of being rejected.
Was your friend's money made on Wall Street ? I have heard that a lot of buildings are rejecting anyone with new Wall Street money on the grounds that it could literally evaporate quickly.Not "solid" enough.
Yup, he's a hedge fund guy. Opened his own fund about 3-4 years ago with some guys from his old I-bank. They have done temendously through the downturn by shorting housing-related stocks.
I agree...that rejection should not have happened if the broker were well versed in the co-op game. A good one will know to whom they should show an apartment based upon the likelihood of approval, and the relative "friendliness" of the board, regardless of finances.
Even brokers are now requiring financial disclosure before showing a property, both to let the seller know the buyer is serious, and to not waste time showing houses for which a prospective purchaser would not qualify. It's not a full vetting of your finances and lifestyle as is done with a co-op, but a statement from a CPA, tax returns, etc. may be requested.
On-site sales agents for a sponsor may not request said information since they have a presence in the building, and are there to show units for sale. They may request a CPA statement, or certification of funds, however, when you go to contract, especially when doing so without a commitment letter from a lender. When they see that you have funds from the lender to cover the purchase price, or a margin above the purchase price, the sponsor knows that the transaction has a much higher likelihood of being completed.
You will always have a degree of financial disclosure with any type of contract, save for fee simple transactions, direct from owner to purchaser. Condos are not fee simple, as you only hold title to the interior of the unit. And, a co-op is not fee simple because you are purchasing shares in a corporation that owns the building, for which you are granted a proprietary lease to a particular apartment.
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Yup, he's a hedge fund guy. Opened his own fund about 3-4 years ago with some guys from his old I-bank. They have done temendously through the downturn by shorting housing-related stocks.
I am pretty sure this is the real reason.Hedge fund people are considered lepers to many co op boards.The money can be here today,gone tomorrow.It might be hard to accept but their decision was probably financial.Your friend definitely should have known or been told this going in.
My mother is moving to the city and I will be buying her an apartment because she doesn't have the $$$ to do it on her own. We've been unsuccessful in finding a suitable condo in the neighborhood she's interested in so we've started looking at co-ops. We've found a apartment in a co-op building that she likes and I will probably make an offer.
Co-op boards like to review the buyers credit history and financial status which I am unwilling to disclose. However, what I will do is buy the apartment with cash and I'd put money in escrow to cover several years of maintenance fees. Is a co-op board likely to approve this or am I wasting my time? I'll talk with my broker and attorney tomorrow but I just wanted to get your perspective.
Sorry I don't think that'll fly. My co-op board wanted all sorts of documentation- 2 years tax forms, pay stubs every 2 weeks (to prove I have stable income), bank account statements (to prove I actually had money saved up and wasn't living paycheck-to-paycheck...and also to ensure I had the downpayment I said I had), references from former landlord or billing companies (to show you are a good reliable payer). They will pretty much want your entire life in paper form. Good luck though!
I would say you are probably going to have to find a condo.Paying all cash means nothing and a lot of co-ops require it along with a financial check.They not only want to see that you have resources,they want to see how deep they are and WHERE THEY COME FROM.
I understand that they want to protect the financial interests of the building which is why I am willing to prepay the maintenance fees. All they would have to do is tell me how much they want in escrow and I'd write the check. It doesn't appear that it will work out that way.
I view the financial check as an invasion of privacy. I am not borrowing money and I am willing to pay for the privilege of not submitting to a financial review.
I understand that they want to protect the financial interests of the building which is why I am willing to prepay the maintenance fees. All they would have to do is tell me how much they want in escrow and I'd write the check. It doesn't appear that it will work out that way.
I view the financial check as an invasion of privacy. I am not borrowing money and I am willing to pay for the privilege of not submitting to a financial review.
Back to looking at condos.
It may be an invasion of privacy, but they don't want a drug dealer for a neighbor. Are you a drug dealer? If not, how would they know?
It may be an invasion of privacy, but they don't want a drug dealer for a neighbor. Are you a drug dealer? If not, how would they know?
I have no problem with them performing a criminal background check.
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