How to Complete the REBNY Financial Statement

Making an offer or completing a board application package in New York City can be a rigorous and stressful experience, with success far from guaranteed. Often used for financial disclosure, the REBNY financial statement is in verifying your income, expenses, assets, and liabilities. The statement is typically used during the offer process or when you proceed to the board application package. The statement is used by New York City real estate agents and management companies to verify your financial condition.

Virtually all condo and co-op apartment resales use such a statement in qualifying you. Understanding how to complete the REBNY financial statement could mean winning an offer submitted, being accepted for a co-op, or failing a co-op interview. A buyer’s agent will guide you; the financials will need to provide.

REBNY Financial Statement Explained

The REBNY Financial Statement is a two-page form that requires you to disclose your income, expenses, assets, and liabilities. There are two columns, the applicant and the co-applicant. Sufficient assets, income, and reserves are required. This protects buildings should you fall into financial hardship in the future. The building’s board is concerned about future owners or shareholders being in financial distress, leading to nonpayment of common charges or maintenance fees. In the worst case, an owner or shareholder is trying to sell their apartment at a large discount to previous comps in the building. Sellers do not want to entertain an offer that the management company or board might reject, and that may never close.

How to Complete the REBNY Financial Statement

Monthly Income and Estimated Expenses

The first two sections are regarding your balance sheet. They include your wages and dividend/interest income. The board wants to see that you have sufficient income to afford the apartment.

The board can now access a critical ratio, debt to income. Building board members; requires a maximum of 30% of your income for your housing expenses. Expenses considered are a mortgage, real estate taxes, maintenance, and homeowner’s insurance. The board may have more stringent requirements, with a 25% debt/income, and it is not uncommon.

Projected monthly expenses

This section of the financial statement would include costs if you owned the apartment. These expenses would consist of standard common charges or maintenance fees, financing/bank loans, etc. This changes depending on the condo or coop you are looking to purchase.

Assets & Liabilities

The first section of the REBNY financial statement; requires a list of assets. Next, the board carefully examines your liquidity. Boards have different requirements; many want to see that you not only have the down payment and closing costs covered but enough post-closing liquidity.

The form starts with your most liquid assets, cash in bank, and money market deposits in the first two lines. These are pretty straightforward. Next up is the contract deposit.

Liabilities

The board wants to see what you own and owe. This section applies to your debt. Examples would be mortgage balances, real estate taxes, credit cards, and any other loans owed to banks or others.

Schedule B – Investments

Page two of the financial statement is for stocks and bonds, with a schedule that needs to complete. First, list the number of shares held, description, and market value.

An example would be; 1,000 shares of Microsoft have a market value of $66,000 for each security owned. If you have non-liquid investments in a private company, this is more challenging. If you have these types of investments, do your best to depict their value accurately.

It would be best if you reflected on the fair market value of each other asset categories accurately. If applicable, any real estate you own (a separate schedule on page two to provide details).

Retirement funds are straightforward. Retirement funds do not qualify as liquid assets. Boards typically like to see post-closing reserves of a year or two.

Supporting Documentation

With an accepted offer and countersigned contract, the next step would be preparing the board application. As part of the form, the financial statement must be confirmed; by providing supporting documentation for each entry. Documents include bank and brokerage statements etc.

Moving Forward

You may feel sharing personal information with strangers through the REBNY form is too much. However, it is a standard process in buying a New York City co-op; no offer should be without a financial statement. A well-completed financial statement will give you an advantage in the competitive process of purchasing an apartment. A well-packaged lessor offer could be the winning bid based on more robust financials and more exceptional ability to pass the board’s requirements.

Final Thoughts in The REBNY Financial Statement

Necessary for a Condo purchase as well. The financial statement and supporting documents and personal and professional reference letters are key to being approved for a co-op. The stronger your economic history, the more leverage you may have in negotiations and greater certainty in being approved for your purchase of a condo or co-op.