Board rejected my buyer w/o interview

I would ask what the board is looking for rather than why the buyer was rejected. They may include a hint for the reason. They are unlikely to provide a reason for rejection as this opens them to lawsuits.

Could be any reason:
The board doesn't like what the applicants do for a living.
They don't want old people.
They don't want young people.

I bet they kept your application fee.

I can think of five nondiscriminatory reasons why a board might do this, and a couple of discriminatory ones. It's so hard to know without seeing the application package. However, you do need to get a hint of a reason so this doesn't happen again. Talk to the managing agent first, and see if he/she can give you anything to go forward with.

ali r.
DG Neary Realty

Do what Ali says. Also, you know your building and we don't. Do you see any yellow flags in these applicants? Were salaries heavily bonus based or otherwise subject to high risk of fluctuation? Were there employment histories full of job changes and lack of stability? Were their jobs undesirable in terms of what the board may be looking for in your particular building? Do they have any history of lawsuits or criminal investigations or actions? Did their references read alright? Have they owned property before? Is the money in their accounts from a readily discernible source? Is their relationship stable (married?) or very long term with indicia of stability like other assets held in common? Were they just barely financially acceptable thus placing a greater spotlight and focus on things like jobs and income stream? I ask because sometimes if you have a lot of money and financial wherewithal the other things lessen somewhat in importance. It is all a somewhat sliding scale of factors. Were they rejected before an interview? If not, then perhaps they bombed the interview somehow.

I seriously doubt it is simply due to a "mistake" in the application. Typically if there is a simple question needing clarification, boards will simply ask for followup information. Then again, if the overall application is a mess, that may turn off a board regardless of the candidate's finances.

And yes, I'm sure the application fee was kept since no coop returns application fees--it is a fee for applying, and is never contingent upon approval. Same situation as colleges--they don't return application fees if they reject you. Duh.

Oh, "duh", kylewest:
I only pointed that out because that is a cost to the seller that isn't always considered.

Sorry that I'm not a lawyer, as you are.
And I sure am not as smart as you are. "Duh".
I still do pretty well for myself. "Duh".

But that cost needs to be factored in, for any seller because as you agree:
It could have been anything. Any one of many reasons for the turn-down.
"Duh".

duh

Come at me with more "Duh"s, kyle.
You are a lawyer. "Duh".
Lawyers are a dime-a-dozen in this town. "Duh".
You take the clients that your firm assigns to you. "Duh".

I am the top independent music PR professional in this town.
I'm an independent publicist, so that means I get clients via word-of-mouth top notch references.
I get to turn down any that I don't want to work with.
Unlike,"Duh", an attorney in a law-firm.
"Duh", indeed.

can you provide the link to support your claim of being the top numb nut in a dying business?

link, please.

"Duh",
I would not think of trying to make you feel like a "Duh"mmy, Coop404.
But any reasonable seller would and should expect their broker to advise as to what the co-op is looking for.
"Duh".
The broker should check with the managing agent first, "Duh",
and then have that info to pass along to you, the purchaser. "Duh".
Before you waste good money and end up with your buyer being rejected. "DUH"!

*To you, and the purchaser, "DUH".*

What high-falutin' big lawyers and brokers post comments on this thread.
"DUH"!

I doubt you can get a board to alter its decision, but you dont state how long you have lived there, how big the building is, etc. you need to get as much info as you can so iwhen you next receive an offer you can assess its likelihood of success.

>can you provide the link to support your claim of being the top numb nut in a dying business?

Better than being shunned because of fraud and misdealings.
Also, aren't you dying?

Coop404: what were the key financials:
sales price =
bank appraisal =
% down and % financed =
Income (seperate out bonus from base) =
Maintainance =
Non-retirment funds post closing =
My guess is these numbers would contain the answer for the reject. I may be an optimist but I think most times it just comes down to money. Also, was the sale price considered too low by the board, thus providing low future comps for future sellers?

It could be the money, Bernie.
It could be anything. The Board doesn't have to give a reason. They aren't going to change their decision.
There's a possiblity that it could happen again with the next applicant, who also will be out the application fee.
The applicant is disappointed and can move on but if still trying for another co-op building, could get turned down again. Out another application fee. Disappointment on both sides of the deal.

I thought that those fees went into the building's cash reserves until NWT explained that it goes to the management company.
Makes me think that they really don't have much incentive to tell the seller what the board is looking for in an applicant.

My friend's parents recently sold their home on Long Island to move into Manhattan to be closer to the grandkids and not have the responsibility of maintaining their big house.
They are well into retirement both are 75-years-old.
Excellent financials. Should have been no problem for them.
Yet, they were rejected by the co-op board without being interviewed.
Their broker told their son: "Oh, I think they don't want seniors of such an advanced age buying in the Building." So they are going to buy a condo.

Young buyers are always suspect. Some co-ops just don't want them no matter how good their current financials are.

People who work in the entertainment business usually aren't welcome in co-ops. They end up buying in co-ops that are friendly to entertainment business people but those are not the norm.
Most just buy condos not to waste time going through the process only to be rejected.

huntersburg: That idiot wants "a link"?
As if he knows anything about the business I work in.
Another know-it-all lawyer. Or retired lawyer. Or dis-barred lawyer. Whatever.

Usually if the buyers are close financially the board will send some questions via the managing agent for clarification prior to the interview. The fact your buyers were not offered an interview would lead me to think there was something fundamentally off with the buyers profile. Since it is unlikely we will get a chance to review their application here are some co-op 101 items:

Profession of buyers: Non-traditional employment/entertainment biz?
Was their base income sufficient to keep them at a 25% or lower debt to income ratio? Some buildings are very strict about this.Recently we were told that 26% DTI would not cut it in one building.
Would they have 2 years maintenance/loan payment liquid post closing.
Did they have solid credit scores?

If they met all this then as pointed out by others was sales price consistent with recent closed deals. Did they have any special requests such as playing musical instruments such as a piano. Were they planning on any unusual/large renovations. Any strange stuff pop up if you GOOGLE their names.

Keith Burkhardt
TBG

One other item-was any of their funds coming via a gift?

The gifting of funds is not looked upon as a plus, that's for sure Keith.

and pianos are frowned upon. You would think the noise would be less than drums or a trumpet.
But music and instruments make co-op boards think there will be noise complaint problems.

I know a Broadway actor/singer who was turned down without an interview.
She doesn't play any instruments but I guess they were afraid she would be singing show-tunes.
I sing show tunes, and I'm no singer. But a professional makes them think that singing will be ongoing
in that apartment all the time.

It doesn't really make much sense that the board charges the same fee whether they convene to interview the prospective tenant or not.

Triple: why doesn't it make sense to you?

404
You do need some guidence from the managing agent and the board. Trying to sell an apartment is costly. If you are providing the board with financially sturdy applicants that would appear as excellent applicants you might be missing something. I would be imperitive that the managing agent contact the board not to inquire as to why they were turned down but as to what qualities are needed to insure the next applicant succeed. Kinda of tricky wording but it's what you need to know.

Yes, you can try and hope your wording gets some kind of information in return but it's really a matter of:
if the board wants to turn down your applicant -- they can.

Trip:
The fee goes to the management company. They don't care if your applicant gets turned down, they just deposit your check.

I'm a board member of coop. We always want a sale to work out. It means flip tax and it means facilitating the needs of our fellow share holders. We don't take chances with applicants. If you don't pass the financial criteria with flying colors, fogetaboutit. If there is something fishy about your income of profession or the origins of you nest egg we might ask questions but only if your very close to the line. You only get an interview if we are pretty sure your in. All you have to do is interview reasonably well. All that being said, a few nut balls have made it past the goalie.

Oh please, there are boards with members who don't get along with each other.
They will dick an applicant over just for the satisfaction of an ego-trip.

@Kyle: "Triple: why doesn't it make sense to you?"

Because rejecting someone with no interview is much less work and much less of a logistical burden than rejecting someone with one.

Turning a buyer down without meeting them is no hassle at all for the board members; they don't necessarily have to even meet all at once, they can look over the paperwork on their own time (and maybe discuss it asynchronously by e-mail), and if it's an open-and-shut rejection, almost no arguing or debate is necessary.

Contrast this with an interview session: having to set a date to all get together and talk things over with the buyer seems to me to be where the real hassle lies and where a board can justify taking a fee.

(If it's the management company taking the fee, then it's a little different; I'm talking about application fees where the board/co-op keeps the money.)

No, Trip: The Board doesn't keep the money.

Boards are notorious for claiming that they "work for free, blah, blah, blah..."
In fact, they get special treatment from the building staff and anybody who posts a comment on here claiming otherwise is bullshitting.

It's a fee paid to the Co-op (to whom you write your check) but your check is received and turned over to the management company, who do not perform an amount of work in any way that should be compensated for the usual $1,500.00 plus fee.

They receive a seperate check for the credit check.
The co-op receives a seperate check for "move-in/move-out fees" (non-refundable, even if no damage is done during the move by the movers, usually $500.00).
They are paid by the co-op to perform management operations in the form of their yearly salary fee.

NWT may be around later to confirm that he explained it to me. I was surprised, but really: as far as the
whole co-op board situation goes, the bullshit factor is to be expected.

and BTW Trip:
Tht Broadway performer who was rejected had excellent financials, great credit and steady earnings.
Nothing off-putting comes up when you GOOGLE her name other than the Tony Award and other industry awards
she received.

It's a bunch of bullshit from the egos of the Board members.

She doesn't even sing at home. She's on vocal-rest when not performing.

Triple: the fees don't go to the board. In fact one of the most usual fees goes to the managing agent -- who has to rifle through all the pages of these documents and make sure that they're complete (as well as perform routines like credit checks) before passing the package onto the board.

That work gets done whether there's an interview or not.

ali r.

The buildings are built just for the fees. Oh the fees.

The poor managing agent, "who has to rifle through all the pages of these documents and make sure they're
complete..."
For $1,500 bucks, that rifle action is overpaid.

The Buildings are built by the developer, huntersburg.
The developer gets his own "fees".
The Corporation is another entity.
The Management company, oh woe is them.
They have to "rifle".
There is another check that is paid to the Co-op for the credit check.
Oh, woe, woe , woe. How horrible for them.

stop.

stop.

stop.

columbiacounty, everyone's red light.

Coop, how long did board take to reject your buyer? Did they screw around for months?

clearly there was something wrong, likely finacial, with the buyer.

perfect example of broker screw-up. had you and you attorney handled this your self, and had you been very specific with buyer re what would be required to pass your board, instead of allowing all to be filtered by brokers, your "buyer" would likely have not pursued your apt.

"Questions:
1) What are my (best) options: ask applicants to reapply, provide clarification to the board, lobby board members, hopefully other..?

2) It's uncommon, so I'm really interested in what are people's experiences here from either coop board members, applicants that have been through this, or others.

I can't just move on because I can't afford to have this happen again with the next applicant!
Thanks for your thoughts."

***

Speaking as a board president:

1) You have no options. Boards do not consider re-applications unless something significant has changed in their situation (new job, more money, inheritance windfall, marriage, etc.). Do NOT even bother trying to lobby board members individually. It's a legal liability to even discuss matters individually with shareholders; discussing matters with OUTSIDERS could pose an absolute legal nightmare.

2) What's "uncommon"? Rejecting applicants without an interview? Are you new to real estate??

3) Li8sten to the advice given thus far. Do NOT approach board members personally. Do a little homework about the building so that next time there won't be a "next time" rejection.

Matt, maybe reversals don't happen in your building, but they do happen; I've just seen one (on a FSBO actually). The person you are asking to "do a little homework about the building" is a shareholder, and as such, the board members work for them.

I do agree that approaching board members personally certainly isn't the first step. However, an inquiry to the managing agent is certainly cricket.

ali r.

Ali, where did she say she's a shareholder and not an agent?

NYCMatt: I think it was inferred that the OP is a shareholder by the first paragraph s/he writes: "My coop apt buyer was rejected by board without an interview. Obviously no reason is given but BOTH BROKERS STATED..."

Ali and I assumed that to mean the buyer and seller's brokers and that the writer is the seller. It also doesn't sound much like a broker's post -- more the type of questions a seller would ask.

Op refers to "both brokers" in 3rd person... OP is owner. FP: what does cricket have to do with this? :)

Cricket takes days to play one game.
It's a sticky wicket for the seller.

Bernie, I didn't make a bet with the OP literally.
I was only pointing out that the buyer is out application fee as well as time thinking all was,uh,
a basketball dunk.

and I stated the truth in my comment.
You're a money guy, how much would I have won in a cyberbet? How much should I have put down on the cybertable?
"DUH"!

It is not at all uncommon for a rejection to happen without an interview. In fact, my understanding is that most rejections occur because of issues discovered during review of the board package.

deferring simple work to brokers caused a fail--

call your managing agent and inquire re what is required for your next buyer to clear your board--speak directly to the next buyer if possible or, God forbid, through his/her broker as to what is required, use serious language to the effect that buyers shouldnt waste your or his/her time if they dont clearly have finances required. ask the buyer about income and assets directly. be very clear that their deposit will sit in escrow wasting everyone's time if they don't have the finances they claim to.

There you go Coop404.
You are now cooking with reality gas.
It's not uncommon.
No use going to ask for a do-over.
Could happen again.

If you do what yikes suggests and the next applicant doesn't make it past the board --
it's something else that nobody will tell you.
You just have to keep trying to sell and find an applicant that is super-shiny to please the board.
What you can do for yourself is buy a condo when you do finally sell your co-op.

Rejections happen all the time without an interview. I disagree with the advice about not speaking to the board...you have every right to ask them about 'what went wrong' or 'how do i avoid this in the future'....they are not obligated to give you any reasons but many will give indications.....in the case of your applicant its either price was too low(was it vs comps?) or financially they werent stable....you should speak to their broker and get his/her thoughts as well

yes, you can speak to a board member, just don't expect an answer.
The OP did speak to broker (s), from what I read in the comment.
Somebody told him the applicants' financials were satisfactory ("both brokers").

If priced too low, broker didn't do the job of pricing correctly.
If priced too low, broker should tell seller: "Your asking price is too low. There is "a floor". That means if you price it too low the Board won't allow you to sell it for that too low price."

I don't know how the Board member would give you "indications".

You ask: "If you didn't like the applicant because applicant was too old, blink your right eye twice."
"If you didn't like the applicant because applicant was too young, blink your left eye twice."
"If you didn't like the applicant because applicant works in the entertainment business, tug your right earlobe."
" If you didn't like the applicant because applicant plays piano, wiggle the fingers on your right hand."
"If you didn't like the applicant because applicant is black, open your mouth real wide while raising your eyebrows and run away from me."

Truth, I've gotten Broadway performers through a co-op board. The trick was to anticipate that the board might object to noise, and to try to block that objection from the get-go.

Here, though, we have an application that was reviewed by two different brokers. Presumably if the problem were something obvious -- indelicate facebook posts or low assets -- that flaw would have been found, and an attempt made to pre-empt the board's reaction. It feels like this one is more subtle than that.

ali

She's trying, ali.
I may suggest she give you a call but she's kind of fed up with the co-op situation at this point.
She's also black and there are no black folk in that building.
She was hoping it wouldn't matter.

Her facebook page doesn't have any photos of her swinging from the chandelier in her bloomers or anything like that.

What's wrong with Broadway performers?

Fan attention/photographer attention.

Seriously?

It's BROADWAY, not Hollywood. No one recognizes stage performers.

The bigest issue with Broadway performers would be the lack of consistency in income. Also add on the noise-related issues to practicing and warming up for auditions.

swim: She tours with her own cabaret show whenever in-btween Broadway gigs.
Around the USA and overseas.
Plenty of income and money socked away in retirement funds.
She's black and can't do anything to change that.

The co-op didn't want an influx of black folk visiting her at the building.
They would be seen in the lobby, the elevator and the hallway.

and as I said: She doesn't practice in her apt., she goes to a studio/rehearsal space.
She warms up at the theatre.

It seems as if this is another situation in which everyone could be better off if the buyer also had a better idea of the soft requirements of the building, what type of people were on the board, what are the demographics of the building and how has it trended, and so on.

What type of people are on the board?!
The snobby type, most of them could not pass their own restrictive requirements if they purchased now, instead of in 1987.