Getting Approved By the Co-op Board: Not for the Faint of Heart
Buying into a co-op is not for the faint of heart. So before you even think about it, do your research.
Find out what the personality is like there. If you plan on having a revolving door of visitors, practicing your drums, and playing fetch with your two giant dogs, a building full of retired investment bankers might not be the best fit. You should also check to see what their fees and rules are. It’s likely they’ll be a little more strict than an HOA, so if that idea makes you uncomfortable, you might want to explore other options.
If you’re ready to buy into a co-op, make sure you use an agent who has co-op experience. He’ll be able to help you navigate the whole process. Mostly importantly, he’ll be able to help you put together a good board package. That’ll be key in helping to board decide whether or not you can live there. They can’t discriminate against you (that’s illegal), but they don’t have to tell you why you weren’t approved. So don’t give them a reason.
Make sure your board package includes:
Your financials and legal:
Pay stubs, tax returns, credit reports, investments, other assets. They’re going to need to see it all. You should also include an explanation for anything that could put up a red flag. That means lots of different jobs in the past year, a see saw salary, or any legal troubles.
Include reference letters (for you--and your pet):
Co-op boards want to know they’re going to get a good neighbor. So ask your current neighbors to write you a reference letter explaining how you were clean, quiet, and always good for a cup of sugar. While you’re at it, get one for Fido too. These should also include any training certificates he’s earned. After all, it doesn’t matter how wonderful you are if your dog is barking all night and going to the bathroom in the elevator.
Speaking of letters…
Don’t forget to include a cover letter for your package to explain why you want to live there and how you’ll be an asset to the community. And you thought cover letters were just for jobs.
Plans for the future
If you already know you plan on renovating your apartment, include those plans. Make sure you explain how your renovation will help property values. (But don't over-explain. If renovations are allowed, then you'll be fine, but you may not want to let the board know your renovation will take two years.) The same goes for if you plan on renting out your property. A lot of co-ops don’t allow that, so it’s better to know that up front.
Make sure you tell the truth. Co-op boards are known for spending a lot of money learning about potential candidates. If you lie, it makes you look suspicious. Plus, who wants to be neighbors with a liar? In the end, everyone just wants a good neighbor.