rejection reasons

not uncommon

No, but I could see this happening if (a) the board knew the name of the applicant, googled it, and had unsavory results turn up or (b) the purchase price was significantly below market. I'm sure there are other scenarios that could prompt this, but those are the first two that occur to me.

Count your lucky stars. Saved yourself a lotta work.

In this case was something around "circumstances" such as co-signing, co-purchasing, or guarantors. But wouldn't the seller know up front what was acceptable and what wasn't and only go into contract with a buyers situation that had a chance to get thru. Or if the board saw a no-go situation coming, wouldn't they likely just remind people what is acceptable and what isn't and give the buyers a chance to change gears and submit an application that was potentially acceptable? Just seems a weird point in process, before the application is finalized and submitted to reject it. Seems pointless.. Either wait and see what something looks like on paper when submitted, or remind seller what is acceptable and let them work with buyer to adjust & submit, or break things off. But rejecting something you haven't received seems extremely unusual and unnecessary to me..

Think of it this way -- the board is doing the seller a favor by rejecting as soon as they have information (presumably reliable information) that would eventually cause them to reject. The favor is that the seller, although disappointed, can move on to another buyer sooner rather than later. Totally understand it may feel more like a premature rejection in the moment, though.

Was it a small co-op? In my small co-op, where we all know each other, sellers have "floated" offers to the board, usually before accepting them. Most of our policies boil down to "case by case basis." We have allowed pieds-a-terre, gifting, parents buying for children, dogs, ARM or interest-only loans, etc., but we are uncomfortable with a blanket yes policy on these things because we don't the building overrun with them.

There was one case where sellers had an offer from a parent buying for child, who had a large dog, and who intended to finance via a nontraditional loan. We told the sellers off the record that we had some concerns, and they ended up accepting a different offer from an easy to approve buyer. Nothing about the offer we didn't like violated "policy," and we may have approved the applicant had it gone to board interview stage. It was just a risky combination of things, and we didn't want the sellers to be off the market for 4-6 weeks just to end up with a rejected offer, especially since they were relocating due to impending family expansion.

I understand your frustration because this situation is akin to being in a relationship and getting dumped with no explanation as to why. What's worse is that the "it's me not you" doesn't apply here. It's more of a "it's you.” Short answer - for one reason or another, they didn't think you were a good fit for the building and they will not budge on this denial. You can either spend all your energy trying to convince them only for them to deny you again or simply say thank you and move on. It truly is a blessing in disguise because their answer is always final. You could have spent hours upon hours filling paperwork to only come to that same result. So, in a sense, you are lucky as Flutistic suggested.

Boards can only get themselves in trouble by providing a reason as it opens them up for discrimination. So legally, the less they say, the better. Natural reaction is to think about what you did wrong or what you can change for the next board application (or relationship). If you speak with a seasoned broker, he can fill you in on some of the most common board rejection reasons such as co-purchasing, pied-a-terre usage, etc. Good luck on the next one!

Halitosis, said quietly under my breath

good question

>> But wouldn't the seller know up front what was acceptable and what wasn't <<

Not necessarily. Sellers are often completely clueless on board/building policies. It is not at all uncommon for a buyer to be rejected before submitting a package, especially if there is an issue with guarantors or co-signers, which is a deal-breaker for many boards.

The selling agent should have done his/her homework, though, and understood what is and is not acceptable in a buyer in this co-op. You are lucky that the rejection came early, presumably before you began spending time and money on due diligence, etc. But it is a bummer to have gone through the trouble and expense of drawing up a contract if there was already a known kibosh on the deal. I'd take it up with your broker or the selling agent, though it is unlikely you'll be able to recoup any money.

A few other notes:

>>Or if the board saw a no-go situation coming, wouldn't they likely just remind people what is acceptable and what isn't and give the buyers a chance to change gears and submit an application that was potentially acceptable?<<

>>Either wait and see what something looks like on paper when submitted, or remind seller what is acceptable let them work with buyer to adjust & submit<<

No. If the buyer is unacceptable because of financial reasons there is no way to 'fix' that. If your income or liquid assets are deemed too low to comfortably carry the monthly costs after purchase then it is what it is. No way around it. Boards do not like to waste time wading though packages if it is clear from the get-go that the applicant is not acceptable.

Where is this co-op located ?

Exactly, what neighborhood is this in?

It may be a situation that has to do with the transaction rather than the buyer. For example, if the Board didn't think the price would set a good precedent for the building they may reject the transaction regardless of the buyer.

@interestedparties - well said. that's a very likely possibility. boards don't like low sale prices

Unless it is someone on the Board who is doing the purchasing.