Friday, January 4, 2013

Board Packages Revealed: Part 1


I recently got a call from someone who read about us on StreetEasy.

"Are you the board package expert?" she asked.

"Well, I don't think I'm an expert, but I certainly do a lot of them." I replied.



It turns out she was purchasing a co-op studio, was unrepresented, and was up against the deadline for submitting her package.  I was able to offer a few pointers on preparing the financial statement, and on the assembly and presentation of the package.  I was happy to provide a little free advice, and while I don't know the outcome, I hope I got her going in the right direction.

What struck me was the anxiety in her voice.  It was like the process of providing the intimate details of her finances, and quite a bit of information about her personal life, to a group of strangers (who held the fate of the most important purchase of her life in their hands) was putting her to the test, and rightfully so.  While the prospects of this drive many to buy condos (which for re-sale still require a package!), getting the home they want requires that they participate in this nerve-wracking endeavor.  With close to 80% of Manhattan's residences being in co-op buildings, it's hard to avoid.

Ultimately, your financial picture, credit, job/income, and sometimes even your references (the parts that will most scrutinized by the board members) will be what determines an acceptance or turn-down.  There are other reasons for a turn-down, a sale price that is too low for the building's liking for example, but the majority of the time it boils down to the basics (debt to income ratio, post closing liquidity, employment history).  So how important is it to present a nice package? and what does this even mean?

I always look at preparing the package for a client as a test, a test that has to pass the first line of defense in this process, the managing agent.  The managing agent is the gatekeeper so to speak, checking that all the requirements set forth by the building are met before the package can go to the co-op board of directors.  This is where following specific instructions, double and triple checking the math, organizing the package properly, and completing every detail "as asked for," is key.  The board members ultimately will look at the meat and potatoes, and not care if the lead paint form was not filled out correctly; but all the little minutiae must be attended to, lest they delay the process by causing a package to be "kicked back" by the managing agent.

Presentation is very important.  The original copy of the package should have a cover letter, addressed to the co-op c/o the managing agent, and outlining exactly what is included; a table of contents basically.  The table of contents essentially is a translation of the list of requirements laid out in the co-op's board application; use dividers or tabs matching the table of contents to separate each section.  Lastly, never bind or staple the thing.  The managing agent most likely will scan the entire document, and be quite annoyed if they have to pull it apart.  A simple binder clip holding the stack together will suffice.

It goes without saying that it should be typed.   Don't have a typewriter anymore?  We use Adobe Pro to type info on scanned PDF's.  There are some free apps that you can use if you don't have the right software that allow you to create fillable PDF's from a scanned document.  Some managing agents have actually begun providing applications in fillable PDF format; imagine that!  The look of the application, not just the content, will represent the applicant.  Be neat!  Don't leave blank spaces, use "N/A" for lines you don't need to fill out, or a simple dash for unused lines of financial statement.  The devil is the details!

Part 2 coming soon...  including:

-How to complete and support a co-op financial statement
-Outside the Lines; what you might need to include that don't ask you for

Go to Part 2




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