rejected without an interview

Of note, our financials were strong and the offer price was good. We are a married couple in our early 30ies. The seller lives in Asia and has had frequent problems with the coop board.

Buy a condo.

If your financials were good, without an interview I can only think price. Was your contract price competitive with recent comps?

The price was a little lower than ask but it was almost in estate condition. I suspect it was because our financing took so long to come through? The building was declined because of division of ownership, lots of investors, and infrequent financial statements.

They have not had many sales in the past few years that involved a buyer with a mortgage and were flummoxed by a lot of the request for financial statement etc. that we made. I think they thought we were difficult for asking for so many docs ( bank requests) or for taking so long?

I am so upset! I reviewed all of the things that coops look at and it didn't seem like we had anything to worry about. I can't believe we had to wait so long to get the loan approved and then we were declined by the coop!! Is there anything I can do?

Can I write a letter reaffirming my interest and request additional consideration? Is there something reasonable, I can do to appeal to them?

before coming to any conclusions about the building or your financials, can you first let us know if you are Canadian?

Very unlikely. consider it a bullet dodged. if they dont change your market to sell will be pretty limited

No, I am not Canadian. Why?

The seller's broker just told me the decision was unanimous but cannot tell me any more. I am surprised that I had no inkling that there might be an issue.

We did think it would be hard to sell but were planning on holding onto it for a while and really liked the place.

You certainly can write the letter if you want, but unless you change whatever it is that concerned them it will not help. I think rejections based in price are more common in units in very poor condition because sellers and buyers factor that in, while boards members may be clueless about the state and are just worried about the appearance of the price. My money is on the price. If you really want to give it a shot, perhaps the seller could feel out a board member they know on cause. You could always resubmit with a modest price increase. I have seen this work, but there are no guarantees. The board is likely unaware of all your requests which the managing agent handles generally.

The building is self managed and I believe the managing agent is one of the board members. He did express frustration with our banks requests for documents even thought they were standard requests. They also told us they were irritated the financing process was taking so long.

The price is low but i would think they would say something prior? They didn't give any indication.

I wish i could get a clue but the seller is not friendly with anyone in the building, an out of the country investor.

Thanks so much for the insight, you guys. I really appreciate your feedback

As a co-op board president, I can tell you you'll never get a definitive answer as to why you were rejected. Nor will you get a second consideration.

Move on.

Definitely move on. You don't want this place. Poorly managed, difficult to work with, unreasonable. Perhaps the fact that you cannot purchase the unit CASH is the reason. Who knows. You never will. If they don't want you, you don't want them. This wasn't the place for you. There are myriad reasons you were rejected. Get over the "They don't want US?!?!???" & go find a much better place.

But as a seller who wants to get rid of the apartment, what can the seller do? In the meantime, the seller is paying the maintenance and living elsewhere. I don't understand how co-ops can get away with rejecting a buyer without giving a reason? I understand their fiduciary responsibility but at least tell the parties involved why the buyer was rejected so the same scenario is not replayed again and again.

NYC2013:

1. the business judgment rule of Levandusky makes the Coop's decision unappealable
2. to learn the true reason for your rejection, buy a calendar

3. when you compare the date of your contract and yesterday's date, you will learn
why your application was summarily rejected

4. you might also learn additional reasons for your rejection if you had full access to
the bank accounts of your seller and board members

5. send your bankers a thank you note: they have heloed you avoid closing costs

The appeals court for Brooklyn, the Second Appellate Department,
has held that it is illegal for a coop board to reject a purchase appli-
cation because the purchase price is too low, but proving that as
the reason for rejection could be very difficult

The problem is in your co-op package.
#1 reason to NOT be granted an interview is financial. Job stability, post closing liquid assets, origination of down payment are all front and center in package review.
#2 Google yourselves, anything weird come up? Anything that would require an explanation might be worth examining.
Small co-op boards don't make it hard for undesirable share holders to sell. We are usually happy to see them go and the flip tax is always welcomed. Dealing with difficult banks is just part of the process. "seller's broker just told me the decision was unanimous" how would they know? Co-op are very tight lipped on this issue. We don't tell sellers and we for sure don't talk to RE agents.
You should examine your co-op package and ID the issue for future reference.

falcogold1:

1. what if the Coop board decided the flip tax would be 25-35% higher if the apt
were sold now pursuant to a new contract

2. don't you think that would have tempted them to reject NYC's purchase

The mortgage and sale was in my husbands name since I am about to have baby and won't be back to work for bit. We have no debt and with my husbands income alone the monthly cost of maint. and mortgage less than 20% of monthly income. We put 40% down and would have a high 6 figures in liquid assets remaining after closing. I never saw this coming since the coop seemed so lackadaisical with their finances I doubted they would look to closely at mine.

Part of our down payment was a gift, but we still could have managed the purchase without it. We didn't think that would be an issue since another sale last year was a gift for a father to his college age daughter. Most of the other in the building are investors or have lived there for a long time, some at 100k or so purchase price.

The purchase price is low but only a couple points lower than the original asking price. All of the units are 1 bedrooms or studios and the one we were buying was the only two bedroom and cost twice as much.

One of the broad members sent an email to the broker saying he wouldn't discuss the outcome except to say it was unanimous. The 2 people selling it to us had 4 bankruptcies ( yes, four) , each lived in a different country, had several tenants crammed in as though it were separate apartments, and never paid their fees. How did they get approved?

I don't want to go through this again but almost all of the building we have looked at are coops! How do I prevent this in the future?

Thanks for all of your feedback. I think next time I will try to get as much info as possible before going into contract and see if that helps.

Buy in a larger building- larger co-ops cannot be so restrictive and still approve all that turnover in inventory. Maintenance is usually a tick lower too as more units share in some fixed costs.

" We put 40% down and would have a high 6 figures in liquid assets remaining after closing."

So you would have had $800-900K in post-closing liquidity?

I know this sounds weird but since it's a small building with all one bedroom apartments and this is the only two bedroom, is it possible that there are no children in the building and they think you wouldn't be happy there and they and they don't want any babies or young children running around? Just a thought.

Sorry this happened to you.

If you're the same person I recall from a month or two ago, you posted quite a lot of information online, including some potential concerns with the building, your attorney's name, etc. It's possible that someone from the building saw this and viewed it unkindly.

Overall, I think you dodged a bullet. Based on what you posted, the co-op seemed shaky -- not unfixable, but higher than average risk for both being a poor investment and being a headache.

I suspect you've learned a lot of valuable information that will help you with your next adventure in New York real estate. Onward and upward!

>>I never saw this coming since the coop seemed so lackadaisical with their finances I doubted they would look to closely at mine. <<

You definitely dodged a bullet here. Purchasing into a co-op with 'lackadaisical' financial management is a recipe for disaster.

Chin up! You'll find a better place.

Agree with Lad. I too remembered that post and thought at the time it might not be a good thing for you. Next time, do not post or if you do, don't be specific. At the end of the day, you really are lucky not to be living there from what I can see. Good luck on your next venture as I feel it will be a better one for you both.

NYCMatt - yes, we would have that much left over.

Lad - Yes, I did post a lot about the building but I changed a lot of building details in case someone from the coop happened to be on this site. I don't think they would have been able to put it together. I do wonder though if all of the issues I had with the buildings docs, etc. made them see me as a difficult buyer.

I just wish I had some direction on how to prevent this in future. Now I am afraid to put in offer in on anything.

'I do wonder though if all of the issues I had with the buildings docs, etc. made them see me as a difficult buyer.'

Could very well be. Next time if you see anything you don't like in a building,especially one that the banks won't finance easily, move on. It will be that much harder to sell later.

"The building was declined because of division of ownership, lots of investors, and infrequent financial statements." Why would you want to purchase a unit in such a building? And in estate condition as well? Something's amiss here..........................

"I do wonder though if all of the issues I had with the buildings docs, etc. made them see me as a difficult buyer."

BINGO.

Bravo again, Matt!

We heard from the broker that the coop was concerned about our bank's requests for so much documentation like financials statements and offering plan. We resubmitted our package with an appeal and explanations about the banks requests and that they were standard for any bank to ask for. They rejected our resubmission stating the banks requests were just too much!?

Jesus, we asked them for just a handful of things and all basic requests. Oddly, the coop package we were asked to provide the coop was about 300 pages worth of our personal stuff. I can't believe the irrationality.

Irrational but not surprising. Co-op boards have a lot of difficulty with anything that represents a departure from the norm.

The last thing you want to hear is that you're better off, but that board is effectively limiting the building to cash sales only. Imagine if you had to put up with that as a seller.

The coop we applied to has a boiler plate sheet that they send out to the banks. If your bank asks for anything beyond that, you have to pay $150 for a "custom report". Apparently, all the banks we were considering for mortgages needed this "custom report".

I am still surprised since the requests were so normal. Financial Statements, offering plan, current C of O? Who doesn't ask for this stuff.

What building is this?

Moreover, HDFC?

OMG let it go already. They don't want you there!! Sometimes "no" really does mean "NO".

Do not ignore lovetocook's post.
My ex neighbor (1st year I lived there) in my small co-op building had two kids that used to scream and run up and down the stairs.
If I get neighbors with kids again, I will sell.

I have no problem with kids [they're especially good curried]. It's parents what I simply cannot abide.