Financials on coop approval process

It varies by coop tremendously. Some want a year, some 6 months, some are like your example; others insist "we have no formula". Similarly, some coops want more than 25% down. The listing agents and managing agents should be able to tell you.

Also, or maybe instead of your example, some coops will require you to put a year's or more worth of maintenance in an escrow account for a certain length of time (usually 1 or 2, but sometimes 3 years).

extreme boards will want you to have liquid assets equal to the cost of your apt left at closing. 2 years, in my experience, is pretty standard.

My answer can be best summed up in the immortal words of Englebert Humperdinck, just insert condo for quando.

http://www.youtube.com/watch?v=ux0nFrN9VQ0&feature=related

Don't forget about your debt to income ratio as well..

Keith Burkhardt
The Burkhardt Group
http://theburkhardtgroup.com/agents_details.php?agent_ID=7619

In the past I have questioned how funny Spinny really is (although that was just a ruse to make fun of his third-person usage). I must humbly apologize because that Humperdinck video might be the best thing ever. Kind of like Austin Powers meets Tom Jones.

No, it's not the same for all co-ops. Ours does not have a set policy on amount of remaining liquid assets, but we are a small building. If you are looking for co-ops that are more likely to be lenient, look for listings that says things like "co-purchasing/guarantors OK." Even if you don't intend to co-purchase or have a guarantor, the fact that the co-op is open to this arrangement probably makes them open to your having less than two years of liquid assets, post-closing. Be careful about getting into a building that is too lenient, though. If the financing policy is flexible, the sublet policy should be inflexible to discourage investors, who can make it impossible for anyone (including the corporation) to get a mortgage if owner occupancy falls belows a certain level.

If you find a co-op you love that is less flexible, I know others who have had a parent/relative deposit a sum in their checking account three months prior (boards normally ask to see two months of statements), and then they returned it after board approval. Not foolproof, but I know several people who have done it successfully.

Good luck!

Or look for a sponsor sale.

Ditto NWT.

If you can't scratch together 24 months of mortgage & maintenance to have in the bank at closing, most co-op boards will rightly tell you that you can't afford this property.

Either go condo, sponsor sale or wait until you've saved more money.

I have bought in more than one co-op with less than 24 months' liquid. It really sort of depends on your entire financial picture and what kind of person you are: all things being equal, fewer liabilities, a steady record of saving and giving money to charity paint a stronger picture than someone with student and car loans who neither saves nor is involved in the community. Keith rightly points out that your debt-to-income is going to matter too. Also, the security (or perceived security) of your income matters. Finally "fit" into the building is going to matter: if you are very much like the people in the building, and they trust your recommenders, they'll try harder to make room for you than if you're not.

This is one reason why finding a buyer's broker you have a good rapport with is so important.

lad's also correct that "padding" one's accounts can work. I don't think it's that it pulls the rug over the eyes of a board -- after all, they're reading your taxes and looking at recent bank statements, so they have a pretty good idea of your financial picture -- it's that the ability to bum money off friends/relatives is indicative of one more financial resource.

ali r.
DG Neary Realty

"If you find a co-op you love that is less flexible, I know others who have had a parent/relative deposit a sum in their checking account three months prior (boards normally ask to see two months of statements), and then they returned it after board approval. Not foolproof, but I know several people who have done it successfully."

"lad's also correct that "padding" one's accounts can work. I don't think it's that it pulls the rug over the eyes of a board -- after all, they're reading your taxes and looking at recent bank statements, so they have a pretty good idea of your financial picture -- it's that the ability to bum money off friends/relatives is indicative of one more financial resource."

*****

I strongly disagree with this.

Any significant "movement" of money into your bank account would cause tax liability problems for both you and your benefactor. I believe banks are required by law to report any deposits in excess of $9,000.

And if the amount is LESS than $9,000, I'd suggest that at this point if you're THAT hard-up to show post-closing liquidity, you really can't afford the apartment in the first place.

>Any significant "movement" of money into your bank account would cause tax liability problems for both you and your benefactor. I believe banks are required by law to report any deposits in excess of $9,000.
And if the amount is LESS than $9,000, I'd suggest that at this point if you're THAT hard-up to show post-closing liquidity, you really can't afford the apartment in the first place

Rubbish, first of all, what is the liability in tax on 100K deposited for three months in a Chase Manhattan Savings account? $500 earnings?
Banks are required to report physical cash deposited, unless something has changed that includes checks, Im getting reported all the time. And let them contact the IRS, there is no impropriety. I needed a loan, after three months I didnt need the money, I returned it.
Matt just doesn't like it when loopholes are suggested against his precious coop boards.

"Rubbish, first of all, what is the liability in tax on 100K deposited for three months in a Chase Manhattan Savings account? $500 earnings?
Banks are required to report physical cash deposited, unless something has changed that includes checks, Im getting reported all the time. And let them contact the IRS, there is no impropriety. I needed a loan, after three months I didnt need the money, I returned it.
Matt just doesn't like it when loopholes are suggested against his precious coop boards."

Wrong.

Regardless of the AMOUNT of the tax liability, there's still liability and paperwork required.

And again, playing these money tricks, even if you're not not caught by the board, strongly suggests you're buying something you really can't afford.

Not an accountant, but I believe a couple can "give" another couple $52K without a tax liability to anyone; that's $13K per person annually. If you do this between in Dec and Jan, for Spring buying, that's $104K. Bring in the grandparents and it can reach $208K. With the life time exceptions, it can go much higher without anyone paying a cent.

I agree with front_porch view that: "...the ability to bum money off friends/relatives is indicative of one more financial resource."

Sorry, but if you have to bum money off of family and friends, that's not a "resource" worthy of buying real estate you couldn't otherwise afford.

Is it really that hard to buy within your means?

Or, God forbid, continue RENTING?

Also, your lender will likely ask for evidence of the source of large deposits into your bank account as part of the underwriting process.

agree with Matt, wow, on all this

plus--you gotta be nuts if a board will really care about charitable contibutions where a buyer has engaged suspicious money moving

when i was on a board last, we were on the lookout for suspicious money-movement, considered it an attempt to game/subvert our process, and shitcanned 2 buyers for this during my tenure---so id be careful with advice that you do anything like this---and we saw nothing reassuring that someone could bum up a few bucks for a few months---we cared most about money earned/saved or legit family money to indemnify in case of adverse financial develoipments

we never even discussed charitable donations---none of our business

Matt
>Regardless of the AMOUNT of the tax liability, there's still liability and paperwork required.

If I write you a check for 20,000 and three months later you write me back a check for 20,000. THere is NO paperwork other than the checks. There isn't a phone call, an email, a letter.

So you would pay tax on 3 months of interest earnings for "a loan." There is no extra paperwork. It's in your bank's 1099 statement mailed to you at the end of the year. And that's if you put it in an interest earning account. In a checking account there would be nothing!

>And again, playing these money tricks, even if you're not not caught by the board, strongly suggests you're buying something you really can't afford

Your unlikely to get caught by the board (more fearmongering) but have to agree with the rest.

Matt
>Wrong.

What exactly was wrong in any of my post. Please back up with facts because you really dont know what your talking about. The bank is only required to report any deposits of 10,000 or more in CASH (including checks made out to cash...duh). That's it.

Can a banker please chime in on this stupidity.

I am entirely confused. I thought that as long as you lived in your place full time, and you could prove that you are not a pied a terrorist, the board would have no problems with your application. I thought excellent financials, buying all cash, etc. just showed that you were a high flying party animal. Who knew?

Sunday, don't forget Crummey: http://crummeyservice.com/powers/notification.html

And the Crummey kids don't appreciate it..
Love the third link "Why Pay for Crummey Service?"

Reminds of a very funny letter on dams created by beavers..

Mr. Ryan DeVries
2088 Dagget
Pierson, MI 49339
SUBJECT: DEQ File No. 97-59-0023; T11N; R10W, Sec. 20;

Site Location: Montcalm County

Dear Mr. DeVries:

It has come to the attention of the Department of Environmental Quality that there has been recent unauthorized activity on the above referenced parcel of property. You have been certified as the legal landowner and/or contractor who did the following unauthorized activity:Construction and maintenance of two wood debris dams across the outlet stream of Spring Pond.

A permit must be issued prior to the start of this type of activity. A review of the Department's files shows that no permits have been issued.

Therefore, the Department has determined that this activity is in
violation of Part 301, Inland Lakes and Streams, of the Natural Resource and Environmental Protection Act, Act 451 of the Public Acts of 1994,being sections 324.30101 to 324.30113 of the Michigan Compiled Laws annotated.

The Department has been informed that one or both of the dams partially failed during a recent rain event, causing debris and flooding at downstream locations. We find that dams of this nature are inherently hazardous and cannot be permitted.

The Department therefore orders you to cease and desist all activities at this location, and to restore the stream to a free-flow condition by removing all wood and brush forming the dams from the stream channel.
All restoration work shall be completed no later than January 31, 2002.

Please notify this office when the restoration has been completed so
that a follow-up site inspection may be scheduled by our staff. Failure to comply with this request or any further unauthorized activity on the site may result in this case being referred for elevated enforcement action.
We anticipate and would appreciate your full cooperation in this matter.
Please feel free to contact me at this office if you have any questions.

Sincerely,
David L. Price
District Representative
Land and Water Management Division
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

RESPONSE:

Dear Mr. Price,

Re: DEQ File No. 97-59-0023; T11N; R10W, Sec. 20;
Montcalm County

Reference your certified letter dated 12/17/2000 has been referred to me to respond to. First of all, Mr. Ryan De Vries is not the legal
landowner and/or contractor at 2088 Dagget, Pierson, Michigan.

I am the legal owner and a couple of beavers are in the (State unauthorized) process of constructing and maintaining two wood "debris" dams across the outlet stream of my Spring Pond.

While I did not pay for, authorize, nor supervise their dam project, I
think they would be highly offended that you call their skillful use of natural building materials "debris." I would like to challenge your
department to attempt to emulate their dam project any time and/or any
place you choose. I believe I can safely state there is no way you could ever match their dam skills, their dam resourcefulness, their dam ingenuity, their dam persistence, their dam determination and/or their dam work ethic.

As to your request, I do not think the beavers are aware that they must first fill out a dam permit prior to the start of this type of dam activity. My first dam question to you is:
(1) Are you trying to discriminate against my Spring Pond Beavers? or,
(2) do you require all beavers throughout this State to conform to said dam request?

If you are not discriminating against these particular beavers, through the Freedom of Information Act I request completed copies of all those other applicable beaver dam permits that have been issued. Perhaps we will see if there really is a dam violation of P! art 301, Inland Lakes and Streams, of the Natural Resource and Environmental Protection Act, Act 451 of the Public Acts of 1994, being sections 324.3010,1 to 324.30113 of the Michigan Compiled Laws, annotated. I have several concerns. My first concern is aren't the beavers entitled to legal representation?

The Spring Pond Beavers are financially destitute and are unable to pay for said representation - so the State will have to provide them with a lawyer.

The Department's dam concern that either one or both of the dams failed during a recent rain event causing flooding is proof that this is a natural occurrence, which the Department is required to protect. In other words, we should leave the Spring Pond Beavers alone rather than harrass them and call their dam names. If you want the stream "restored" to a dam free-flow condition - please contact the beavers - but if you are going to arrest them they obviously did not pay any attention to your dam letter (being unable to read English).

In my humble ! opinion, the Spring Pond Beavers have a right to build
their unauthorized dams as long as the sky is blue, the grass is green
and water flows downstream. They have more dam right than I do to live
and enjoy Spring Pond. If the Department of Natural Resources and
Environmental Protection lives up to its name, it should protect the
natural resources (Beavers) and the environment (Beavers' Dams).

So, as far as the beavers and I are concerned, this dam case can be
referred for more elevated enforcement action right now. Why wait until 1/31/2002 The Spring Pond Beavers may be under the dam ice then, and there will be no way for you or your dam staff to contact/harass them then.

Being unable to comply with your dam request, and being unable to
contact you on your answering machine, I am sending this response to
your office via another government organization - the USPS. Maybe,
someday, it will get there.

Sincerely,
Stephen L. Tvedten
The University of Texas at: Austin
Office Community Relations/Accounting unit
P.O. Box 7367
Austin, TX 78713

I like the response from the Cleveland Browns to a fan who wrote a ridiculous letter, which is discussed below:

http://deadspin.com/#!5716038/the-greatest-letter-ever-printed-on-nfl-team-letterhead

The lawyer for the Browns wrote a two-line letter. The first acknowledged receipt and the second said "I feel you should be aware that some asshole is signing your name to stupid letters."

Nothing beats this guy.........

http://www.27bslash6.com/massanutten.html

http://www.27bslash6.com/easter.html

http://www.27bslash6.com/foggot.html

Thanks, Goldie. This guy is hilarious.