There is one thing that few NYC consumers actually can comprehend unless they have been through the process themselves. It is also something that brokers take for granted. But let’s face it, to an outsider, the co-op board approval, application and interview process is time-consuming, tedious, paper-intensive and frustrating.
Fortunately for us brokers, we know it first-hand and we do it all day long. Buyers, on the contrary, don’t know what to expect. There are all sorts of tips and tricks to make a board package look great, have it completed faster and more efficiently and have less stress and anxiety for you, the broker, as well as the buyer and seller to boot.
Set Expectations From the Beginning
When you first start working with a buyer and describe how condos and co-op’s work, explain that the process for purchasing can be horribly time-consuming, paper-intensive and frustrating. Explain that while the condo board can’t technically reject you, nor do they require an interview, the buyer still needs to go through the application process. There is nothing worse than not being warned. Get it out there early and often. The more the home buyer hears from you about the process, the better.
Once they have an accepted offer, once again set the expectations that the following month will require them to dedicate a good amount of their time gathering information and completing the package. Send them a copy of the board’s sales application so that they can see firsthand all that they will need to gather and complete. Explain that it is your job, as their broker, to make it painless and you will shoulder the burden. You will ultimately put it together, organize it, make copies and present it, but you need their commitment to gather the information.
Be clear on the tedious nature of the board package and explain that if one page from a bank statement, a date, signature or initial is missing, it could delay the sales process or even lead to a board turndown. Put this in writing and make it as clear as day that this is serious business. If they know what to expect upfront, the tedious nature of the process and all the work involved will be understood to be important and required for the transfer to go through. Many consumers just want to plow through or blow off the process. But the broker needs to raise his or her hand early on and explain that it’s not possible.
There is No Standard for Board Packages or the Process
While each package asks for similar requirements, small differentiators exist, and the person reviewing the package may be more or less stringent, so you always have to plan for the worst. The first job of a good broker is to do a detailed analysis of the package. Pay attention to the things that are most difficult to nail down — particularly for clients who live abroad, travel for work or simply don’t have a minute in their day. Check to see if the board requires “wet signatures” or notarized signatures and how many are needed. If CPA’s, employers, or past co-workers require letters or review and they live abroad, plan for that. Plan for the nightmare reaction you get from today’s mobile, web and tech consumers. If you explain early on that boards and managing agents do business in an old-fashioned and non-tech way, you can lessen the blow.
It’s a People Business
Know whom you are dealing with when preparing and presenting the package.
Board members and the managing agent have what you want, and they have zero sense of urgency or desire to make the process any easier, more streamlined or efficient for you, the buyer’s broker. The co-op or condo board is their client, not you and not the buyer. Understand the dynamics upfront, and it makes things easier. The transfer agent or admin who fields your calls and reviews the package before submittal is likely a very low paid, low-tech position. They see the brokers as typical overpaid salespeople and won’t have any incentive to want to assist. They know that they have a good deal of control over the process and that they have what you want. A huge conflict exists out of the gates. Understand that and do your best to start off on the right foot. Be pleasant, say “please,” “thank you” and then be patient.
The Package Details
The numbers need to add up, the backup needs to be there and the package has to be as clean as possible. The managing agent or any board member may or may not scrutinize the particulars in the buyer’s sales application. You have to assume they will go through each line item with a fine-toothed comb. The numbers on the financial statement need to be substantiated down to the penny, no rounding. And, instead of making the board member or managing agent take out their calculator, highlight the numbers on each of the bank statements. Use a highlighter or colored pen or marker to draw attention to the balance totals on the bank statements. For example, if one has multiple savings accounts, circle the balances for each account and then, in the margins, add up the numbers to show the connection to the savings total seen on the financial form. This small and tedious work will ensure that the board knows you’ve given it the proper attention it deserves.
Don’t miss one signature. Some packages ask for multiple initials, signatures and dates. If just one date or initial is missing, the managing agent can send it back. Why would they send back a package with a missing date? Because they can. They know that you want to move this along faster than not. It can be a frustrating game of cat-and-mouse, but you win by both planning ahead and responding immediately. Get ahead of it. Always have someone check your board package before submitting. Tell your clients that your office completes an independent review prior to submittal and that there may be some last-minute adjustments or parts needed from them. The last thing the consumer wants is piecemeal requests. It is good practice to outline, separate from the front page of the board package, every signature, initial, statement, reference letter, bank letter, etc., required so that they know what need. You do not want to go back to the buyer asking for more information after the fact. They likely work long hours, travel and feel an incredible amount of pressure and stress from work. It is frustrating for them, and it’s your job to streamline and make the process easier and more efficient for them. They will get frustrated with you, not the board or the managing agent because you are the one asking for additional “stuff.”
Don’t Rush Through or Underestimate the Process
Taking your time early on will ensure your success in putting the package together. Print out two copies and go through one and make as many notes as possible in the margins. Highlight any key differentiators and the items that might be harder or take longer for the buyer to obtain. Make lists and plan out the weeks that it might take to complete the package to have it ready for submittal. Rely heavily on your co-broker because you will need their input and the package will require some things from the seller. Make sure you give them enough time to get what the board needs. Go slow and know that review and approval moves at a snail’s pace. It is better to take some time to submit a tidy package than to rush through and have it sent back because of mistakes two weeks later. If a rejection or request for more info happens, the buyer, seller or your co-broker will blame you for the delay.
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