There are a number of Do’s and Don’ts when it comes to the co-op interview, but there are three (3) that you absolutely have to commit to memory and I’ve trademarked a new acronym to help you remember them:  NRA (oddly, RNA and NAR were both taken).

Never Ask Questions

Review your application

Arrive on Time

1. Never Ask Questions. This is the suggestion I get the most pushback about, but ignore it at your own peril.  I may be paraphrasing a bit here, but this is how some of my clients have responded: “What do you mean, Jim? We have a lot of questions for the board. We want to know when the co-op is going to replace the building’s windows. When will the exercise room be completed? When is the maintenance going up? Are there any assessments? When will we be able to start our gut renovation?”

No, no, no.

The purpose of this meeting is to decide whether you are going to become a member of this co-op, a neighbor of the people sitting in the room with you. They ask the questions. You answer them. Coffee is for closers, diamonds are forever, politicians are for sale, and questions are for shareholders. You may ask questions once you are a shareholder. Let me also say, that the co-op interview is not the time to be deciding if you want to purchase the apartment. That ship sailed at the end of the due diligence phase. If you have questions because you think you may have been misled, because you didn’t look over all the meeting minutes, because you didn’t read your contract before signing it, or haven’t reviewed the co-op’s financial statements, then have a conversation with your attorney.  If you have general questions about the co-op or your apartment, you should ask them before you sign a contract or direct those questions to a third party – the managing agent, your lawyer, or your broker.

Remember, you are being evaluated, so when you ask questions (even ones you think are insightful and show how thoughtful you are), you run the risk of raising a red flag (Troublemaker! Usurper! One-Who-Doesn’t-Follow-Directions!), even if that is not what you meant to do.  So answer their questions accurately, politely, and don’t ask any yourself.

2. Review Your Application. You should be familiar with your application, so at the very least read it again before your interview. You will be expected to answer questions about it quickly and accurately.  Also, bring a copy with you.

Another reason to review your application is for accuracy. Always be honest and accurate with your answers. Don’t try to impress anyone and never exaggerate. You have been asked in for an interview. This is great. It indicates that on paper, you are liked.  Relax and answer everything honestly.

Lastly, couples should decide who is fielding which questions. For example, one partner may be assigned to answer financial questions, while the other fields the rest.  Avoid discussing answers with your partner during the board interview and be sure that whoever is charged with answering questions about information in the application has reviewed the application.

3. Arrive on Time. Enough said.

Here are a few more helpful tips.

• Just the Facts, Please. Don’t volunteer additional information about yourself and don’t show off.  Specifically, it’s best not to identify Twisted Sister as your favorite band, you don’t play half-court ball in the kitchen, you are not suing your last co-op (assuming you’re not), you have no plans to host a casino night once a week, and if you see any Yankee hats in the room, you are not to bring up the Mets.

• Privacy. Be prepared to answer personal questions without being angered or upset, or at the very least, without indicating that you are angered or upset. The board has a lot of leeway as to what type of questions they can ask you. Answer their questions honestly and do not avoid answers to personal queries. Note, however, that boards are prevented by law from asking questions of a discriminating nature. But questions concerning money, assets, income, smoking, drug use, job history, landlord history, criminal history, etc. are fair game.

• Dress Well. Treat the interview as you would a job interview and dress appropriately.

• Pets and Kids. There is a good chance that the board will want to meet them, so (try to) make them behave if they are interviewed as well.

• Leave it at the Door. Whatever it is, a bad day at work, a fender bender, the Mets losing another game, put it behind you, put your smiley face on, and enter the room like life couldn’t be any dreamier. If something truly traumatic has taken place in your life, and this is not possible, then reschedule the interview.  One more point: if you have just had a fight with your spouse, do not continue it during the interview. I mention it because this happens. Kiss, make up, and tell each other you were wrong – you have the rest of your life to fight in your new apartment.

• Be Confident. And relax! Remember, being granted the interview is a good thing.  They wouldn’t have asked you in if they didn’t think you were a good fit for the co-op.

Please share your own co-op interview experiences and tips in the comments section and keep an eye out for an e-book with comprehensive information coming soon.  Thanks for reading.

Couple granted an interview after reading this post.

All co-op apartment buildings require prospective tenants/owners to apply for membership by submitting a co-op package. This usually consists of an application, not unlike a job application (only more intrusive), along with some supporting documentation (e.g. tax returns, bank statements, pay stubs, reference letters, etc.).  The co-op’s officers – commonly referred to as the co-op board – review your application and, if they like what they see, will later schedule an interview with you.  After which, you will be approved (and can go forward with your purchase), or rejected with scant rights to protest or appeal. The process is a minor inconvenience for some, while others need their own copy of DSM-IV to describe its effect on them.

The first step to passing the interview is being granted an interview. Submitting a perfectly constructed co-op board package will substantially increase your odds of being asked on that date, and will go a long way to reducing your anxiety throughout the review process.

1. Get Help. A good real estate broker will work his or her tail off to make your application sparkle and to streamline the entire process. However, if you are flying solo, enlist the help of friends or colleagues who have been through the process.  Ask them lots of questions and, if they really love you, ask them to review your application package.

2. Get it in writing. Some boards are formal and will provide you with a printed application containing very specific instructions and required documents; others will send you an email with instructions; and there are those, “unstructured” boards, that will leave you a brief voice mail describing a list of documents it would be nice to get from you. This last situation is untenable. Instructions from the board should be unambiguous, complete, and in writing. If yours are lacking, send an e-mail or letter to your board contact or the managing agent (see #3 below), “confirming” your understanding of what is being asked of you.

3. You will have questions. During the application process you want to communicate consistently with the same source. Doing otherwise can lead to misunderstandings, an incomplete application, and time lost. If you are working with a good broker or a managing agent, that’s great. They can answer all of your questions. If you are on your own, I recommend getting the email address of the primary board contact (and one or two other board members in case this person goes on a holiday).

4.  Give them what they want, not just what (you think) they need. If you have followed step 2, you have a formal application or clear-cut instructions from the board or management company. These need to be followed to a T. Here are a few examples of mistakes applicants make along the way:

• You are a couple purchasing your first apartment together. The board application asks for two personal reference letters from each applicant. In this situation I’m often asked if it’s okay to share one or both of the personal reference letters. This seems reasonable, because couples usually have friends in common, but the answer is no. If the board asks for “two personal reference letters from each applicant,” then give them what they want. Of course, your friends can wax poetic about both of you in their letters, provided each of you has two separate references.
• Similarly, I’m often asked if applicants need to supply as many tax returns (or bank statements) as specified in the co-op application. The answer is yes. I once worked with a board that asked for the last five years of federal tax returns, and I agree, the request was excessive.  But if you want to own the apartment you need to give the board what they want – all five years. (If you are a couple who files separately, then that would mean including ten tax returns with your application).
• Employer references and professional references are two separate items.  If asked to supply one of each, then you cannot use one letter to satisfy both criteria. You need to supply a letter from your current employer (or HR department) specifying your current employment status and another from a colleague or former colleague, who can attest to what a wonderful worker you are.
• Filed under the topic heading, This Should be Obvious, here are a few more things to do:

Supply as many copies of the application as is requested.
Don’t negotiate the application fee, the move-in fee, or the move-in deposit.
Sign and date wherever requested.Complete the entire application.
Don’t enter any misleading or inaccurate information.

5. Submit well written reference letters. If you have friends or colleagues who write well, and who like to write, then ask these people to write your reference letters.  Not everyone is so fortunate. You may need to give your references an outline (or flat out write the letter for them). If possible, collect sample reference letters from other people who have passed a co-op interview. You can pilfer ideas and format from these letters.  In any case all good reference letters will state the following:

How long: How long the reference has known you, or how long the reference has worked with you, or how long the reference has been your landlord, etc.
Relationship: Who is the person writing the letter? Are they your manager, a colleague, a friend, landlord, etc.?
Relevancy: employee references should state that you are good at your work and why, landlord references should state that you have always paid your rent on time and are very considerate, personal references should explain why you are a good and conscientious individual.
Your reference letters should explain why you’ll make a good neighbor and a good addition to the co-op.  On that note, give your references a heads up that they may receive a call from the co-op board. Employee references and landlord references tend to be contacted more frequently than personal references, but all should be put on notice

6. Be Honest and Forthright. Your references don’t need to reveal every time you forgot to do the dishes or the pens you swipe from the office, but your entire application package should be an accurate reflection of you.  So don’t fudge your finances or claim you invented the Internet in your co-op application.

7. Triple check your numbers. This one is very tedious, which is why it trips up so many people. Mistakes here could force the board to ask for clarification or give the impression that you have something to hide. This could delay your interview (and move in date), or worse, you may find yourself rejected by the board. Here are few things to look out for:

• There will be a place on the application where you state your annual income.  This needs to match the amount on your employee letter.
• If you are asked to provide a detailed list of assets, these need to match exactly any financial statements you are including with the application.
• The financial documentation (bank statements, tax returns, etc.) you include with the package, should be up to date.  More specifically, monthly statements should not be more than 30 days old, and quarterly statements should not be more than 90 days old.

8. Type up the application. The board application is almost always an electronic document, making it easy to complete on your computer, your tablet, or in the cloud.  If you are handed a paper application, I recommend at least asking for a digital version.  If none is available, then scan the hard copy to a PDF file and complete the application using adobe acrobat or a less expensive PDF editor (or just retype the whole damn thing in word).

9. Neatness counts. Whether typed or (if all else fails) hand-written, the application should be clear. Any additional documentation should be delivered in the same order it was asked for and each section of the package should be preceded by a title page (for extra credit, print title pages on colored paper or use tabs). I don’t recommend binders or folders mostly because, at 200 pages and above, most board packages are too big for such fasteners (but also because some board members resent the waste). Put a rubber band or industrial-sized binder clip around each copy of the package and stack them neatly on top of each other.

10. Hand it in on time. Applicants are usually required to submit a complete application within a specified period – most commonly, the earlier of 10 business days of signing a contract or 5 business days after receiving a bank commitment letter. This is a requirement you’ll agree to in your contract of sale, so best to comply completely. If at all possible, I recommend collecting documents and reference letters well in advance of offering to purchase an apartment (see Pre-qualify Yourself).

A lot of this may come across as draconian. The best boards use their considerable power to act responsibly and in the best interest of the co-op they represent.  The worst operate as a fiefdom where questionable decisions are made sometimes serving the interest of individual board members and not the co-op as a whole.  Thankfully, this latter scenario is the exception and not the rule, and human nature being what it is, most boards fall somewhere in the middle. Bottom line is that while putting in the effort to compile a solid application is no guarantee to acceptance, why give a board reason to reject you on whimsy?

When you have a moment, please share your co-op experiences and tips via e-mail or the comments section to this post. Next week, we’ll talk about the co-op interview and how to pass it and before the end of the year we’ll make available a comprehensive e-book with more detailed information and lots of examples.  Thanks for reading.

New York Assemblymember Hakeem Jeffries has a very promising career ahead of  him. He was instrumental in having Cathie Black fired and may have his sights on the US Congress.  But Mr. Jeffries latest bill proposal, about regulating up-and-coming neighborhood names, sounds to me like a stunt.  Someone needs to advise the Assemblyman that there is actual real estate crime occurring in Brooklyn.

BTW, I’m thinking of telling people that I live in NoCroHisDis.

How the NYPD knew it was my birthday I’ll never know, but they did and they were nice enough to give me a present. Today! – My birthday! – My car was towed! Towed not because I was blocking a fire hydrant and endangering the lives of my neighbors, not because I had a number of outstanding parking tickets (depriving the city of much needed revenue), and not for any reason that even the most bureaucratic bureaucrat would agree with. My car was towed for double parking 5 minutes past the posted alternate side of the street deadline. Double parking on my block, a side street, a lane, a  rarely used alleyway where everyone double parks from 9:30AM to 11:00AM every single Monday, Tuesday, Thursday, and Friday. Happy Birthday to me.

When I arrived at the Brooklyn Navy Yard Tow Pound, two undercover police officers were standing outside the main structure. I took my place in line behind them. One of them told me to go ahead in, that they were standing here waiting for their patrol car. “Your car was towed?” I asked. “Yup, can you believe it?” he said obviously very pissed. I didn’t know what to say so I walked through the swinging doors, that are the main entrance – Then I thought of something and went back. “At least you can get angry,” I said.  The partner just laughed but the cop who spoke before snarled, “We don’t get angry, we get even,” like he’d said a thousand times before.

Inside was pretty close to what I expected: the DMV on Lunesta. There were the florescent overhead lights, the ugly mint blue walls, and the scuffed 8X8 tile flooring. In the middle of the floor was taped a large white letter T. The top of the T faced five very dirty teller-style Plexiglas windows. Two men-I guess it was there birthday too- were standing in line over the white T, and a third, who’s posture indicated that he had already given up on being impatient, was in front of the only Plexiglas window that was staffed. The lone worker was unhurried, she was sluggish,..,she was slow. But to be fair she was also holding a conversation on her cell phone. Even more egregious, (apologies non-geeks), she was typing on a teletype style keyboard and looking at what appeared to be an old IBM 3270 style monitor. 1970′s technology at best! There were aging notices taped everywhere.

WELCOME TO REDEMPTION PLEASE START THE LINE BETWEEN THE POLES AND WAIT UNTIL YOU ARE CALL THANK YOU

DO NOT POST ADVERTISEMENTS BY ORDER OF NYPD.

I took my place in line. There were three of us now and it was quiet. Quiet like it was quiet waiting outside the principals office. Quiet like it was at your uncle’s on New Years Eve and you don’t want your parents to notice that it’s seven hours past your bedtime. Quiet like someone had something of yours locked away and you couldn’t get it. Something that would cost ten, twenty, or fifty thousand dollars to replace and you weren’t going to get it back if you didn’t behave yourself. It was real quiet until a uniform police officer walked in talking on his cell phone.

“I don’t know… I’m going to see. OK bye.” He dialed another number. “Hello… Yeah, this is officer So And So…. Yeah, I’m gonna be late today… My car was towed… I was parked in a bus stop…Yeah, I was dropping my kid off. Can anyone there help me with this?…I don’t know. OK”

The uniform officer didn’t take his place in line behind me, but stood on the side, ignoring the big white T taped to the floor. Still it was quiet. The three of us would occasionally eye him and glance at each other, but we said nothing. And still the same guy was up at the Plexiglas window.  The lone worker was no where in sight.

Overall, I want to thank the NYPD and Mayor Bloomberg, in particular, for my birthday and though it will be much harder to surprise me next year, I hope you try.

Thanks for reading, Jim.

I like to think the comment below is more representative of my work:

“You’ve been incredibly helpful, and if we do in fact choose to move forward with our home search, we would very much like to stay working with you. In our house-hunting experience over the past month, you, by a long shot, come across as a genuine advisor who wants to be our advocate.”

- Paymon

Thanks Paymon, you made my week!

Law Breakers: Chrissy, Jack, and Janet

Well now I’ve heard it all. I mean, I’ve always known that oral sex was illegal in several states, and I was not surprised when the Texas Board of Education erased Thomas Jefferson from their textbooks, but this morning  I learned that in New York City it is illegal for more than three unrelated people to live together in an apartment or a house! Don’t believe me?  Here’s this morning’s NY Times article:

In New York, Breaking a Law on Roommates

Jim,

I think you’ll get a kick out of this. We are refinancing our home through a mortgage broker that shall remain anonymous. Among the mountain of paperwork they asked for, we were asked to provide our most recent bank statement. It had to be an official bank statement with the full account number (like the ones the bank sends monthly) not a download from online banking. So we sent them our February 2010 bank statement. It was rejected…want to guess why? February only has 28 days and the mortgage broker insisted on 30!
Anyway, just wanted to send this your way. We still love our apartment!

Take Care,

Julie

One word of caution. If you intend on taking advantage of the credit, don’t wait until April 1st to start shopping. There is liable to be a feeding frenzy at that time which could artificially push prices higher, and nullify the value of the credit.

 Here are the facts:

What Qualifies?

The Tax Credit applies only to the purchase of a primary residence (i.e. home) where the purchase price is $800,000 or less. The home cannot be purchased from a direct relative (i.e. parents, grandparents, siblings, or children).

 Who Qualifies?

First-time Homebuyers

 First-time homebuyers are defined as people who have not lived in a home they own for the previous three years. For first-time homebuyers, the tax credit applies to 10% of the purchase price up to a maximum amount of $8000. 

Repeat Homebuyers

Repeat homebuyers must have owned their current home for at least five years or have lived in the same home for five consecutive years over the last eight. For repeat homebuyers, the tax credit applies to 10% of the purchase price up to a maximum amount of $6500. Notably, the new law does not require that you sell your current residence.

Income Requirements

Single taxpayers with annual earnings of $125,000 or joint filers with annual incomes of $225,000.  (Single homebuyers with incomes between $125,000 and $145,000 and married homebuyers with incomes between $225,000 and $245,000 will be eligible for a reduced credit).

When?

You must have a signed contract by April 30, 2010 and your transaction must close by June 30, 2010. This deadline is extended to April 30, 2011 for members of the military who have served outside the United States for at least 90 days between Jan 1, 2009 to May 1, 2010. 

How?

Taxpayers can claim the credit on their federal income tax returns. If the credit exceeds the amount of tax owed, the difference is paid in cash – even if the taxpayer owes no tax!

Thanks for reading. 

For additional information (of both the detailed and confusing kind) have a look at the IRS websites below:

First-Time Homebuyer Credit

Some Current Homeowners Now Also Qualify 

Form 5405

Form 5405 Instructions

…

Walk-through: David Gahr House

I have a question.

If everything I’m reading these days sounds something like housing hasn’t hit bottom.., or something like housing prices are plummeting.., or Deutsche Bank Predicts 40% Drop in New York Home Prices.., or Brooklyn leads the way in unfinished condos.., or the Real Estate crisis is finally catching up to New York..,  then why are so many “experts” out there still referring to this old fairy-tale?