Bid first to view a co-op's financials statements?

PS I can meet income/down/savings requirement... any way I can use this to my leverage to expedite seeing those financial statements?

Why not?

because they all want their couple of hundred$$ for their non-refundable application fee.. i don't care so much for the app fees, it's the 2 week red tape bullshit process plagued by most mgmt boards in this town.

this is the beginning of my search, so i'm looking at 10 different co-ops.. i dont have time to keep track of each one while they masturbate to the view while im busy working and getting my comps' ready for the bid, since i only use my broker for his body and not his liberal arts training.

is it normal to walk in with financial statement and w-2 in hand and walking out with financial statements that same day or am i too advanced for such a regressive system?

Normally, you have to have an accepted offer and start on the attorney review process in order to see the co-op's financial documents. It's only after you've examined them and had all your questions answered that you sign a contract if you want to. So I don't think you need a contingency clause vis-a-vis financials, but I may be wrong.

consider this... financial statements are typically 30+ pages. many people want them before they put in "a bid". you can ask general questions and get an idea, but giving out financials, for 2 years, to everyone who is interested, is just too much.

you yourself are saying that you're looking at 10 different coops. this means that you don't know what you really want yet, but you want 600 pages of financials.

ask what the reserve is, what the mortgage is, what assessments are typically per year. based on that you can make an offer. if the financials/due diligence doesn't work out, don't sign the contract.

It's going to depend on the building. Ask and see.

When we expressed interest in possibly making an offer, we asked for and were given a PDF of the building's budget and operating expenses for the past three years. Then again, this is a small building with nothing "sexy" (e.g., salaries) or controversial in the finances.

Prior to offer, we also asked for and were given an approximate balance of the underlying mortgage, the shares of our unit and the building, and whether the building had been paying principal on the loan.

We were given both of the above before we provided any on-paper documentation of ourselves, but after expressing serious interest and conveying enough information about ourselves that the broker knew we were qualified.

I never had a problem requesting financial statements from a coop and receiving them prior to a bid. red flag and/or broker bullsh1t if you ask me.

not what i wanted to hear tromp, but thank anyhow that seems to be the norm unfortunately..

ab, i can see underlying mrtge and number of shares for the unit.. RESERVE is huge, and they don't seem to budge on their stance with that.. assessments you can pry at the co-op's site as some post their board minutes (not all).. but if i can get the reserve, that'd be a huge step..re: 10 co-ops i started initially from 60.. ran the numbers in excel one night, and got it down to 10.. so i do know i want, its just FS of a co-op is a bigger deal for me than space/view and arguably location (i prefer south of 58th though)

lad, congrats that's awesome, i'll try to be polite and upfront and see who'll budge.. unfortunately some of the 10 i have are large buildings so their process may not be so flexible as your building.

hol4, selling brokers can probably provide financials on half of the buildings that you're looking at -- I know I can on my listings, although I don't tend to hand them out before there's a bid. Still, you might want to ask your broker to request them from listing broker, with diplomacy -- sometimes this is where the liberal arts training comes in handy.

I would try very hard not to think of the system as "regressive" though, because if you stay with the mindset you're posting with -- skip the line by flashing the cash -- you'll flunk the board interview.

These are potential neighbors you're talking about. You're not buying a car.

Also, bear in mind these co-ops aren't corporations that have to file calendar year financials by March 31 the way Fortune 500s do. 2009 financials are in many cases still not available yet, in some cases just coming in now.

ali r.
DG Neary Realty
A.B. English and American Literature and Languages, Harvard '87

hol4, if they have PDFs for the financials, i don't see why you would not get them. the ones on paper are the ones that i'd expect to give you some issues. you can request just the pages with numbers (balance sheet, income statement), that will cut down to approx. 4 pages per year.

the issues are so simple: reserves, assessments, lawsuits, % tax deductability, upcoming expenses--any selling borker should be able to provide this verbally--obviously borker needs to be honest as you/your lawyer will see the financials and board minutes once your offer is accepted--if borker lies, as would be illuminated via the financials/minutes, borker has blown a deal and had an apt off the market unnecessarily--borkers often are quite stupid, but not so stupid as to blow a deal by lying re fin'ls/minutes

if borker doesn't know these things about a building borker has a listing in, borker should not be selling coops in nyc...bye bye borker!!

I used to think that brokers didn't provide much value. However, in being on the boards for a while, people like Ali's or 30yrs' knowledge of buildings and their financials seems to be an invaluable service that a broker provides -- if you find a good one. I think you need a better broker.

Had a somewhat similar situation where the broker already had pdfs of finangials. Had some difficjlty getting that current year's since they had not finished them as of oct. We wouldn't sign until we saw trhem though.Yes our board is dysfunctional

Thanks for the shout out skinny!

ali

front_porch: 'I don't tend to hand them out before there's a bid'

Why? It does not make sense for the buyer to put in a bid before they know what they want to know. If this is a matter of costs, charge a few bucks for it and be done.

uk, how many people will give you let's say $200 for this info? if you sign the contract, you'd get your money back. as you can see, hol4 is looking at 10 coops, that would cost him $2K and he would get back only $200 if he decided to bid on any one of them.

asking the questions and getting the answers should be sufficient to get a better idea of what the financials of the buildings are. everything else will be done by the attorney anyway during doc review.

No, unlike the offering plan, which can cost a couple hundred, financials are generally free or fairly minimal cost ($15, maybe). It just doesn't feel right to me to hand them out too early.

If a buyer wants to know general information about the building -- "How many units? What's in the reserve fund?" then listing agent can answer those questions, either off the top of his/her head, or in a follow-up email. But for a buyer to want to know the financial nitty gritty of a building -- which remember is private information -- I want to see some evidence of seriousness from them.

Typically, when a buyer bids, they attach a REBNY financial form, so they are exchanging their private data for the seller's private data. To hand it out earlier seems one-sided and unseemly, somehow.

That said, if a buyer's agent sketches the profile of their client without submitting a REBNY form ("look, he's at Chase, and he makes $400K a year, and they have the down payment in the form of an inheritance from her mom, and she has $80K of law school debt but otherwise they're debt-free"), I'll do it.

and of course, since in this hypothetical I am an agent of the seller, I try to ask the seller very early in the process to position the marketing of unit X along the "hand out information freely/keep things private in the early days" spectrum. Agents do the marketing, but we are shaped and directed by the styles and wishes of our individual clients.

ali r.
DG Neary Realty

I can't think of a single (good) reason that is in Seller's interest not to give f/s to anyone interested enough to ask for them. Representing the seller, I think an agent is (a) more professional if s/he is more responsive and open and (b) possibly creating a competitive advantage, compared to competing listings where the agent is not forthcoming.

Why not make it as easy as possible for a qualified bidder to be comfortable enough to actually make a bid? Especially if I have them in PDF form, I generally send a purchase application to a buyer who seems interested, even without being asked; when asked, I will always send the most recent financials.

I assume agents worry that if they send the f/s a buyer will ask "too many" (detailed) questions, which I have seen happen. But then I can cut off the seminar at that point *if* I think it appropriate to do so. Or, I can get the answers to reasonable questions, in part because I should know the answers to reasonable questions about my listing. If a prospective bidder becomes a pain in the a$$, I can draw some lines, but to repeat: how is it not in the seller's interest to make it as easy as possible for a qualified bidder to bid??

BTW, I find it is unrepresented buyers who ask for f/s. Buyers with agents tend to learn enough from their own agents, who can ask the listing agent general questions and a wrap-up "will we see anything in the financials that will raise any red flags?". A professional listing agent will then tell a buyer's agent, e.g., "you are going to see a drop in the reserve fund Y-o-Y because ...", or "the building expense spiked last year because ...", or "we carried two shareholders who lost their jobs, so you will see some maintenance receivables ...". With that kind of preview, bidders react to a lawyer's report of Due Diligence in a much more benign way, such as "yes, that looks bad but the seller already told us about that".

Different agents have different opinions, obviously.

front_porch: can't help but disagree with you. For me as a potential buyer to be serious, I need to know what I am buying. Until I know the financials of a building, I do not know what I am buying. Second, while the financials are private info, they are by no means something that 'unseemly' as you put it to disclose too early. It appears to me nothing more than sellers' agents' tricks to get a person to commit and then make it much more difficult to get out of a deal if they find something they do not like.

uk, the buyer does not sign a contract until Due Diligence is complete. if anything pops, the contract is not signed or is renegotiated.

keep in mind that there are many people who have no clue what the coop's financials should look like and ask for them. they see the coop runs in break-even or at a small loss, as it typically is, and think that it's an awful thing. they don't realize that a coop is NOT SUPPOSE TO TURN A PROFIT.

when i was purchasing my coop apartments, i had my accountant go over the financials as the attorneys were not savy enough. he owns a coop and his wife has been on the board for years. i spoke to another accountant who told me not to bother sending him coop financials because he will not have any clue.