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Co-Op Board Approvals

Shopping for a home in a co-op will usually end in the process of having your background judged by a group of strangers who have been living in the same building for several years, otherwise known as a co-op board approval. The process can be disorienting and confusing, with a general sense of difficulty in securing approval.

Interestingly enough, the stringent co-op board screening process was invented to create a sense of exclusivity in specific neighborhoods. Today, though, co-op boards tend to exist to increase a building’s financial stability and future. New York has much fewer foreclosures than other cities. Many attribute this positive stat to co-ops rarely selling to buyers who cannot afford the apartment in question. 


While condos have the right to the first refusal to purchase, they cannot reject a buyer. On the contrary, co-ops require all applicants to be approved by the board, resulting in the candidate and homeowner working together to create an application package that will most likely get the candidate backed by the board. If you’re looking to buy a home, working directly with the owner of an apartment in a co-op is a great way to help ensure your approval. 



Submitting an application to a co-op board:


After the seller accepts a preliminary offer from a buyer, the seller’s broker will usually provide a copy of the board’s purchase application that includes detailed information about what materials are required. Although each co-op has its specific requirements, the following documents are the usual right of passage: 

– Contract of sale
– Bank references
– Landlord references
– Financial documents
– Personal references
– Recent tax returns
– Credit release form


Moreover, having a clean and straightforward financial statement is incredibly important in the co-op application process. The information should include assets, liabilities, income, and expenses. Everything from the value of art collections to life insurance policies to car loans should be part of your file. Co-op board members tend to value full transparency, wanting to know who exactly will be moving into their building. 

It might also be helpful to craft a well-written cover letter, detailing an introduction to the buyer’s background, lifestyle, and career path. The cover letter should also include specific reasons why this particular building was so appealing to them. This is an excellent way to humanize your application, getting on the good side of what are usually some pretty hyper-fastidious board members. 



Like with a job application, personal and professional references tend to be a routine part of the co-op board approval process. Personal connections should mention that you are a good, quiet neighbor. They should also include positive details about your family life. The more unique the information, the more the board will have the impression that the referrers are close to you. It would be good to avoid references like college roommates and ex-romantic partners. Professional references should come from either your employer or former business partners. They can also come from anyone who has consulted your finances, such as an accountant or portfolio manager.


What to Expect…


After the references and before the interview, they will likely run a background check, looking into your credit, social media, and possible criminal history. If there are any potential red flags, it would be wise for the applicant to include them in the application to avoid any surprises. It might be a good idea to do a social media check on yourself and delete anything that you wouldn’t want to be seen. 

If you make it to the interview process, it’s usually a sign that your finances and background have passed the test. As long as you follow some simple guidelines, the interview will merely be a formality. A group of 3-5 members will ask questions about pets, whether you play musical instruments, how often you plan on having guests over, and whether or not this will be your primary residence. They are legally not allowed to ask about sexual orientation, religion, race, or marital status. It would be a good idea to avoid discussing any significant renovations you might be planning. If asked whether you have any questions for the board at the end of the interview, be convivial, and ask light questions about the best restaurants in the neighborhood or what they enjoy most about living in the building. 



Closing thoughts…


Like getting into college or finalizing a divorce, nothing is ever a sure thing until approval is final and papers are signed. Your chance of approval will depend on taking the process seriously, being prepared, and being communicative.