The process for selling residential real estate in New York City doesn’t differ much from one building type to another. Except if the property is in a co-op building. After the contract of sale agreed to, due diligence conducted, and the mortgage is approved, there remains the co-op board interview. One of the most vexing things about New York City real estate is that co-op boards can reject a buyer for any reason or no reason at all.
For sellers, this can present a lot of uncertainty in what sort of buyer they should choose. Get it wrong, and you’ll have lost the deal, valuable time, and have to start the process all over again. Why it’s so important to recognize a qualified buyer when you see one, follow these steps to ensure you choose the right one.
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Talk to your co-op board.Talk to your co-op board.
You may not personally know the board president or other board members, but that doesn’t matter as a shareholder and member of the cooperative, you are entitled to communicate with the board members. Before finding a real estate broker, or even listing your property for sale, talk to members of the board and let them know you are planning to sell. Try to get a list of potential interview questions they would ask any applicant. Once you’ve found an interested buyer, have them go over these questions to see if there could be any problems. Also, ask the board about any upcoming assessments or house rule changes that you might not be aware of. While co-op boards are mostly concerned with the financial statement of any potential buyer, you should ask them about any significant red flags.
Go over their letters of recommendation.Go over their letters of recommendation.
Letters of recommendation are part and parcel of the co-op application process. These are how any potential buyers ‘sell’ themselves to the co-op board. Many co-ops require five reference letters per applicant, so for a couple that makes ten. The buyer’s broker will be responsible for ensuring that each of these is perfect regarding spelling, punctuation, and grammar. But it’s the seller’s broker that is responsible for choosing only the best candidates that meet the financial criteria. Financials are essential in determining the worth of a recommendation letter but also how the candidate presented. Letters from people with prestigious titles and long years of friendship with the candidate will measure the highest. What the board is looking for is credibility and trust.
Ask for the board application early.Ask for the board application early.
While talking to your board, request a copy of the purchase application package. Go over this extensively with your broker before you list the property. In its first few pages, it lays out all requirements for application and approval. It will mention the building’s house rules, flip taxes, building fees, and application fees. If it’s not clear whether a fee applies to the buyer or seller, then now is the time to find out. Having a full understanding of the board’s requirements will help you to weed out those buyers that don’t match it and find those that will.
Ask about their occupation.Ask about their occupation.
These days many people work from home and depending on the job, this could be a red flag for some co-op boards. By the city’s zoning codes, some professions forbidden from operating out of residential buildings such as barbershops, beauty salons, pharmacies, or insurance companies. When talking with your board, ask them what occupations are a red flag. For instance. If someone is a freelancer, then what kind of financial criteria do they need to have to be considered? Some occupations will be preferred. For example, potential applicants who are away often on business trips are generally preferred — the idea being that a resident who’s not there often causes less noise and traffic in the building.
Check their overall appearance.Check their overall appearance.
In most cases, the seller will have to trust the opinion of their listing broker for this one. Usually, the seller won’t meet the buyer until the closing day. Candidates who don’t dress appropriately for the board interview could cause an issue. This can be something as simple as dressing too casual for the Upper East Side or too showy for certain Brooklyn neighborhoods. If they have a specific health issue that affects their appearance, then make sure the board knows this ahead of time.
