Seller/Seller Broker NDA for coop purchase

Since you're dealing with a co-op, the seller is absolutely going to see your financials, because he/she may be preparing your path through the board. For the seller to do that based on a partial financial story communicated by your broker, and then have a piece that he/she thought was unimportant show up ... that's a recipe for a turndown.

As far as an NDA, I've only been requested to sign one once, and I was willing, but the request -- which was eventually dropped -- came from my side.

Frankly, I don't know that I would have if the request came from the other side, unless we were dealing with a real superstar. Are you Matt Damon? Are you J.Lo? From pretty much anyone else -- and I've worked with well-known people -- I think it smacks of "this person is going to be tough to work with."

ali r.
DG Neary Realty

Thanks for that. I'm a first time coop buyer and find the dissemination of my total financial picture a very disconcerting, especially to complete strangers. Seller's brokers understood, but sellers themselves?

Streakeasy, keep in mind that your total financial picture will likely be distributed to the entire co-op board. Along with your SSN, photocopies of your license and passport, etc.

I was truly shocked at just how many people had access to my full, unobscured information. And how various people, including brokers and attorneys, emailed it in digital files that were not password protected.

By the end of the transaction, at least 10 people had enough information to steal my identity very easily. And, thanks to a closing packet where nothing was obscured, I probably could've stolen my seller's identity very easily.

I completely understand the coop board disclosure. This whole process provides no protections for the buyer in any way- privacy is of high concern to me, but at the same time, over 80% of all property in manhattan is simply a cooperative. I'm trying to protect myself as best I can and feel an NDA would probably do the best, since it is normally accepted practice in the rest of the 'normal' financial transactional world.

If it helps your thinking, part of the process of finding the "right" co-op is finding a building where these "complete strangers" are people you want to be in a community with.

ali r.
DG Neary Realty

A word of advice - don't head into a co-op board telling them how you want to do things. Follow the specific procedures to the letter if you want to buy a co-op. The minute a prospective purchaser starts thinking they can suggest modifications, ways around the board package or approval process is the minute the board starts thinking you might be a difficult neighbor. This is why lawyers sometimes have a hard time passing co-op boards.

The board is not looking to steal your identity. We are looking to be sure that you can afford the apartment, weather any unforeseen financial difficulties, and that you will be a pleasant, respectful neighbor. You are going into business with your neighbors, and they have a right to know more about you in order to decide if you are adequately prepared to be a partner.

If you are not willing to co-operate without putting your own terms on the process.... don't look at co-ops. Think about the derivation of the word co-op....

At the same time, don't take anyone's word for anything.
Brokers promise your info will be secret, only the board will see it. Will cross out all non essential info, etc....wrong!
Do it yourself. Things like the full account numbers, social security on your bank statement copies, etc.
Seller thought I was little kooky but later admitted his identity was stolen twice and maybe should have been as diligent as I was.

As Target says, "the board is not looking to steal your identity" but yet it happens.
Your package sitting on a desk for 2 days. Improper disposal of your package by a board member after. Emailing a missing statement to the broker who's putting the package together has a virus on the main offices computer.

But yes giving over all that financial info on yourself is somewhat disconcerting as a first time buyer. It was for me as well. But you get over that fast. As soon as you visualize your on the board and someone else is coming to be "your partner" in a cooperative, especially if it's a small one.

I'm on my co-op's board, and I think most of the information is extraneous. We need one properly trained person to securely receive the buyer's SSN and account numbers in order to conduct the appropriate background checks. The rest of can and should get copies with SSN and account numbers blacked out. There is absolutely no reason why seven of us all need SSNs and specific account numbers. We can make our judgments just as well without this information, and we give both the buyer and ourselves more protection by doing so.

Your neighbors may not be bad people, but what happens if they toss your packet in a non-secured recycling bin? What happens if they store it digitally (as my co-op has been doing for a years!) and their computer is hacked? Or their gmail is hacked? At minimum, co-ops should be required to properly protect personal information in a way that would pass a routine business quality audit.

The real estate industry and co-op boards can both do a much better job of protecting buyers' information without sacrificing anything. And with that, I'll get off my soapbox....

Lad, an easy place to start would be to have all co-op members return their packages to either the managing agent or the buyer's broker post-application.

ali

What does the board do with account numbers? SSN I understand, so the Credit Report can be pulled. What good are bank account numbers to the board?

In my particular case, the building management company requested two Board packages: an original with account numbers; and a copy with numbers redacted.

The original was/is used by the management company to pull the credit report and verify financial information. The redacted copy is distributed amongst the Board. The Board members never see the account numbers or SSN.

As a first-time buyer of a co-op as well, I knew going in I had to forfeit (at least temporarily) my right to privacy with respect to financial information. Considering that thousands upon thousands of co-operative apartments have been bought and sold in NYC, it would seem a bit aggressive and unnecessary to request an NDA.

One thing to note, I put my Board package together myself (much like my loan application) and I personally hand-delivered the original and the redacted copy to the management company. The broker only reviewed the package, made no revisions and only added a copy of the appraisal, although it was not required. Doing so, cut out a lot of potential for misuse.

@Lad, coming from another country i totally agree. I provided my own credit reports (along with all the other information) and then blacked out anything import dob/ssn/shopping transactions etc.

Basically they saw cash i had in the bank/totals in 401k/share transactions and pretty much everythign else was redacted.

I mean seriously....two personal references who t f cant put together two friends ina room or fake them-its an antiquated system that people continue to maturbate about how exclusive they are etc...

Maybe they'll next force you to give your Facebook password: http://www.usatoday.com/tech/news/story/2012-03-20/job-applicants-facebook/53665606/1

But to the original post, an NDA won't help. An NDA won't change their practices, including the issues lad suggestes.