Coop Boards requesting maintenance in Escrow

Options:
Do as they say or walk away.

Common?:
Sure, it's especially reasonable as you don't have a job.

Is it a red flag for me re the building??:
No. Assuming coop's financials are good, they're just being cautious. If you were an existing owner in the building, you'd want similar protection.

Bottom line:
You not being employed is the red flag. You could bet it all on black one day and broke the next.

If you LOVE the unit and have plenty assets as you say, just do it. If not...

Good luck.

Thanks for the response. Yes, I get the caution. But couldn't I also lose the plum job I have the day after closing? That's where the caution seems a little skewed. However, I expect you're right. I don't really have any other option.

Yes, you are correct. People lose jobs everyday. But they will look at your position, length of employment, annual salary, etc... But as you probably know, the entire file will reviewed, not just job or assets.

typical irrationality of coop boards.

i would much rather sell to an all-cash buyer with plenty of assets, than to a 40% down buyer with some assets and a "secure" job.

also, get some specifics in writing re what a "review" is--like review should be, simply, that they return your escrow in full, if youve paid monthlies promptly over the 2 year run.

i assume that, whatever the terms of the escrow, you can have your $$ in readily marketable securities--ie not at jpchase earnign 32 bp's a year with annual fees.

If you do put up the money in escrow, have your lawyer insist that you get the interest and that you mutually agree on the interest bearing instrument.

vslse65 is entirely correct in the first post below your original. Some co-ops will not ask for this escrow, but it's not an improper request for a co-op to make. After you've moved in, when the next prospect comes along whose Job & assets are like yours, you will be happy the co-op put that mandate into place.

Best wishes on your new home!

harassment wont stop there. get a condo

"Some co-ops will not ask for this escrow, but it's not an improper request for a co-op to make."

And other co-ops will just reject you out of hand since you have no income.

Consider yourself lucky.

matt, youre a testy dope often, and in this case, certainly.

"no income" is a meaningless dig, when we are speaking of an all-cash buyer with plenty of assets. no job means no ordinary income, fool. plenty of assets likely generates plenty of dividend and interest income. whatever the case plenty of assets provides a much better cushion to prevent financial issues for the coop.

what's a bit odd to me is the concern over the escrow. if one can pay 1 mm all cash for an apt with 2000 monthlies, and have "plenty of assets" remaining after the purchase, what's the big deal with escrowing 48k? even over the long haul, so long as the money can be invested reasonably.

put some numbers (at least hypothetical) on this. is "plenty of assets", more realestate, some of it well-leveraged? or is it readily marketable securities equal in value to 4x the value of the apt?

and ignore matt, who is on the board of his walk-up coop in washington heights. likely he presides over a very leveraged building (underlying mortgage) full of shareholders with >50% mortgages, few real asset beyond their apts, and "secure" jobs. and if he's like many coop board members, he's lucky he got in long ago, bc he probably couldnt pass muster with even the current weak standards he enforces in his own building.

Actually, yikes, I've lived in both co-ops and condos (all in the central/west Village), and also served on the boards of both.

I find your attitude pretty snarky "...typical irrationality of coop boards..." Having done my time in both, I can assure you that there is plenty irrationality to go around when it comes to SOME boards, both co-op AND condo. By the same token, I've seen pretty darn good boards operate in both situations. It's a building by building situation, and has nothing to do with co-op vs. condo.

As to this situation, I would prefer all-cash (or a healthy down payment) + plenty of verifiable easily liquid assets + a steady job history, to be honest. If I am forced to choose, I would then prefer a NOT all cash down (50%+ down is plenty) + approved mortgage from a quality lender + even MORE cash in bank + some kind of reasonably negotiated escrow. I personally do NOT prefer the 'all cash no job' scenario....