Top Ten Reasons for Co-op Board Rejections 1. Financials
A prospective buyer needs sufficient assets following a closing. Boards focus on the amount of liquid assets one has, and many of the premier buildings require one to have two to four times the value of the purchased apartment after closing. Other building boards may insist that one have two to three years of maintenance and mortgage payments in the bank after all closing costs have been paid. A knowledgeable broker will not only be aware of each building's requirements but will also keep abreast of those changing variables. If a buyer's income is too low, that buyer may be rejected. The rule of thumb is that co-op boards generally want a buyer to be able to devote 25 percent of one's earnings to the payment of mortgage and maintenance. If those payments for one or more properties exceed more than 25 percent of one's gross annual income, one may very well be turned down. 2. Job History Most co-op boards will ask to view not only a prospective buyer's earnings from employment, but all of one's job history. The boards will want a buyer who has demonstrated job stability, rather than someone who hops from job to job. It is not uncommon for prospective buyers who had sufficient assets to be turned down by boards simply because the buyer changed jobs every few years. 3. Bad Credit Although a prospective buyer may have a good income and plentiful assets, if that buyer has a poor credit history, including a negative track record of paying current maintenance fees or rent, then that prospective buyer will likely be a candidate for the board's rejection. A good broker will examine the buyer’s credit report prior to showing them available apartments.
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