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Wondering if everyone could weigh in on what co-ops are expecting to see these days after closing? We are looking primarily in Lenox Hill & UES east of 3rd. Currently own our apartment, good income and find condos to be too expensive and we're not all cash buyers. Budget is $1.2mill to $1.6mill but obviously would depend on what boards want to see after we close.
2 years of total expenses in cash / diversified stocks ex 401k should be sufficient for any non-stuffy coop. Also selling broker will tell you.
I had more than that and the board still asked me to put 6 months' of maintenance fees in escrow for at least one year. So I think it really depends on the board. Thankfully, I got the escrow back after a little over a year's time.
Usually about 2 years of liquid post closing but as stated by 300_mercer---selling broker may have additional guidance on that and it also depends how favorable the debt to income ratio would be.
leecube - if you don't mind sharing, do you know why they required the escrow? I'm on a board of a fairly liberal coop - we have only asked that of one of our new owners because they were tight on the requirements and had yet to sell their previous apartment before closing. we returned the escrow after 1 year.
if, by "2 years of total expenses", 300 means 24 X (monthlies + mortgage pmt), that would be very light, in my experience, even for not-so-challenging coop boards.
I lived in a building that is solid/prudent financially, but not nearly as tight as many, and it required 50% down, with ability to show liquid assets, after the close, of at least 48 X (monthlies + mtge pmt).
much as you may appreciate financial leniency when a buyer, you wont if something goes wrong with the building and/or its finances.
@jms8, I have absolutely no idea why and the board didn't offer any reasons either. We were renters before so we didn't have anything to sell before closing. We have more than 2 years of liquid (cash + mostly government bonds, no stocks) assets post closing. Large down payment. Steady (9 years) jobs. The only thing I can think of might be the debt to income ratio, which is closer to 28%, but we don't have any other debts.
Who knows what these boards are thinking sometimes. I only agreed because my old lease had already expired and I was staying beyond that expiration date even though the landlord didn't technically agree to it. It is all good now, they agree to give us back the money after the 1 year's time.
@Yikes, a board that wants 50% down is about as tight as it gets, was this in Sutton Place or something?
I mean your total expenses including food, personal expenses and kids education + mortgage + maintenance. Typically at least 50 percent more than your maintenance and mortgage. So call it 3 years of maintenance and mortgage min should be sufficient for any non stuffy coop if your last 3 year average income less 50 percent of your average bonus covers your total expenses.
50 percent down min is stuffy. You can tell stuffy by
downpayment requirements less than 35 percent = non stuffy.
Elevator operator/excessive staff = stuffy
Lots of old retired people in the lobby = stuffy
Selected areas/locations with old money = stuffy
"I had more than that and the board still asked me to put 6 months' of maintenance fees in escrow for at least one year. So I think it really depends on the board."
And it depends on the prospective shareholder's income stability.
@jms8: 50% down is far from as tight as it gets. Sutton Place, prime Park and Fifth Ave. buildings would require 100% cash and additional liquidity. 25% down is light; 30-40% is more standard, and 50% is a high requirement, but isn't that uncommon, even off prime avenues.
@jsw363 - ok fair point, i ignore as I wouldn't even look at those buildings, i do see plenty of buildings in lenox hill & yorkville with just 20% down requirements.
Some buildings also have front and back end debt to income ratios. At the apartments we looked at, the front end varied from 25 to 28% and the back end varied from 30 to 40%. This was besides the minimum downpayment (10% to 50%). These were not "prime" buildings.
@jms8: Are you looking for pre-war? How many bedrooms? If you're looking at co-ops west of Third (as indicated in your initial post), I'm surprised that you've found that many buildings with 20% down requirements.
In any event, I think that based on your descriptions that 2 yrs mortgage + maintenance in liquid assets would be the absolute minimum post-closing. I also agree with 300 Mercer, that a good selling broker should be able to steer you clearly if your own broker can not.
sutton place aint what it once was. it's weakened relative to comp mkts in sync with midtown east generally. river house maybe, the rest aint got no cachet.
i have never heard of a coop considering one's personal expenses, beyond debt service for other situations, and the nut to carry the coop apt. i tink you speak of what you dont know. food? tuitions? laughable.
stuffy?...you aint been around stuffy much, obviously.
and 50% is common, as is all cash. less is common, too--but les than 25%, dont go there, and take a very close look at a bldg that req's only 25or 30% equity.
@jsw363 - no EAST of 3rd per my initial post. 2-3 bedrooms, pre or post-war is fine. I have a great broker, not officially in the market yet as I'm selling my current place and given what's out there, I think we'll sit tight and rent for the next couple of years.
"i have never heard of a coop considering one's personal expenses, beyond debt service for other situations, and the nut to carry the coop apt."
You must not get around much.
My board -- and many others that I know of -- increasingly want to see at least a year of NET INCOME in the bank. We're not stupid. We know that if you hit a severe crunch and need to dip into savings, you are much more likely to use your "maintenance" money to pay the cell phone bill or buy food.