35 Sutton Place...coming soon

If you look at the plan for 7C, it implies that the 'service' hallway is perhaps part of the building (despite that bedroom off the hallway). I'd say it's part of the apartment, and there would be a owner-lockable door separating the apartment hall from the service elevator. Having the hallway bit be part of the apartment is consistent with how 3C and 7C were presented. I don't know the overall building plan -- it's possible somebody shortcut that bit of the drawing, and there's actually a hallway, stairwell, trash/incinerator chute, and service elevator on the other side of that door, rather than just the elevator shown. The plans for 4/5C and 10/11C just say 'service', with no elevator indicated. It would be absurdly expensive ($1m?), but I'd put 9C back to 3C or 7C's layout, which is probably the original design. (10/11C is pretty good as well).

@ali sorry to hear about that. Hoping better times lie ahead for you and for the local market generally.

So the third time was, in fact, the charm for 9C at at 130-134 E67th: https://streeteasy.com/building/130-134-east-67-th-street/9c?lstt=moNqOKSXCx7IB7dxzeHb1-Iay55ENBm9W_IKVT91eV8FhmaKRvKW3YFOGOcon0Rw_0QIb3932BGioSPm&utm_campaign=sale_listing&utm_medium=share&utm_source=web

As for us, we just got our first strike. Board turn down for an excellent contract for undisclosed qualitative reasons (as opposed to financial). Buyers possess no statutorily protected traits; they are just not people the current board wants to live with for whatever reason (most likely not rich enough and/or not New York enough).

All perfectly legal and what we signed up for when we purchased a coop, although we never really thought the board of our building would trend that direction. Part of me says that knowing what we know now, we would have gone condo, but what we have does not exist in condo structure, so there is that. Lucky for us that we love the apartment; looks like my dream of coming back at some point is still alive to torture me, and I am okay with that. We are taking it off the market.

ah, mcr, I'm sorry -- boards have been truly flexing their muscles post-Covid. Maybe your loss will be my gain though...

I'm so sorry, mcr. Hopefully things turn around. Will you rent it out (if that is an option), or continue to use it from time to time.

I cherish the idea that some day, somehow, coops will adapt to meet most people's needs. Proabably a lost cause. Or maybe not as the older generation dies off...

For the most part they do MTH... However, some are living out their Edith Wharton fantasies.

Hhhhh - why yes, of course, to the manner born.

Current board policy is no more rentals, and they just sent notice out lowering max financing back to 65% from 80%, though in reality I suspect nobody will get approved without 50% down.

While not ideal, we are fine with it all. It is a small building that by its terms is set up to be owner-occupied. Most people who buy there intend to stay forever.

We knew all of the above going in and would not have purchased there had we not been prepared to own it indefinitely.

Our scenario highlights why there is such a significant differential between the price of coops and condos. I tried to console the buyers that they dodged a bullet. Now that they have experienced the dark side of coops first hand, maybe they will go the condo route. They can certainly afford that route, but the challenge is finding the lovely factor in the neighborhood in a condo structure - it just does not exist.

At least you are being honest with yourself (and, to your credit, with prospective shareholders).

I was told by a longtime NYC resident who is head of his board that co-ops aren't what they used to be...by which I think he meant many/most are operating more like condos these days.

So, I have an update on our board turn down. I am happy to report that there was a reconsideration with transparency, and the denial of the application was purely financial. The debate within among interested parties was whether one should run the "What if applicant lost their job scenario?"

I believe one should run that scenario, and when the answer is that the applicant would not be able to carry the maintenance for even one month without liquidating retirement funds, then a turn down is reasonable, particularly when the high salary job is brand new (less than one year).

Assets that were material in our acceptance of the offer did not withstand scrutiney. They were both speculative in their valuation and not vested, plus there was a significant employer advance (that exceeded post-closing liquidity) that was subject to immediate repayment should the employment arrangement not work out.

Given the strength of the prospective buyer's employment record, I likely would have cast my vote for approval had I been a disinterested board member, but I do respect and understand the decision makers' conservative relatively conservative approach.

None of this changes the fact that were our building structured as a condo, the purchase would have gone through. However, were the building structured as a condo, we would have had to pay a lot more for the apartment, as would the prospective buyers, so it is what it is. The whole exercise just highlights again that you get what you pay for.

Thanks for sharing, mcr. That doesn’t seem unreasonable.

>> They were both speculative in their valuation and not vested, plus there was a significant employer advance (that exceeded post-closing liquidity) that was subject to immediate repayment should the employment arrangement not work out.

Does “speculative in their valuation” also means illiquid, as in some private equity mark that could be stale/wrong? Or does it mean a speculative asset whose market price fluctuates wildly, like Dogecoin?

FWIW, not counting unvested interests and employment advances subject to repayment makes sense to me. The former is illiquid—it cannot be turned into cash. Moreover, it disappears right when it might be needed most—upon losing the job—just like the employment advance. To the extent liquid reserves are desired by the board, these are not that. They are amounts subject to future employment. If one counts unvested interests, why not future wages? And if one counts employment advances subject to repayment, why not payday loans? I’d be inclined to look at them as part of the candidate’s compensation, not as part of their assets (illiquid or not).

I guess I’d say the board’s conservatism comes from wanting liquid post-close assets, not from disqualifying these contingent-on-employment assets (a.k.a. “compensation”) as such.

Sounds like you took a flyer with these applicants, especially knowing what your board was probably looking for. I guess when there's nothing else on the table why not?

Not having the ability to pay one month's maintenance after losing a job!? I would have figured your building would like to see 2 years worth of maintenance and mortgage payments. Liquid post close at a minimum: cash, stocks, bonds etc in non-retirement accounts.

We would not have accepted the offer had we known that the liquid assets that were represented to us by our broker were not only not liquid, but also not even vested. We are distressed that our broker neither spotted it nor saw it as a problem after it was highlighted as the glaring problem with the application. Next time around, if there is one, we will take time to kick the tires on what is represented to us.

As a finance person, I think 'nadas view of unvested interests is comletely correct: the interests (absent some document specifying otherwise) will not be paid out if the employee is terminated / quits before vesting. The employer advance is part of the employee's current cash assets (assuming the advance has been received, otherwise it's an valid receivable), but amounts received also need to show up as a term liability on the employee's personal balance sheet, because the repayment requirement hasn't been discharged through completing the employment period, or reduced through incremental repayment, or whatever condition applies. The 'speculative valuation' sounds like the 'assets' might have been stock options that would be granted according to the vesting schedule. If the company isn't public, then the valuation of the options is almost completely speculative (level III assets, for the banker types). There are valuation models, but unless the buyer and the co-op board are particularly financially sophisticated, it wouldn't be unreasonable to discount them entirely. The news is full of former companies that competed funding rounds at ever increasing valuations that turned out to be only so much malodorous emitted vapor.

I agree on all fronts and begrudge the board nothing for the denial.

My overarching sentiment from this whole exercise is disappointment in and for the broker. Not only should I not be having to defend the board's turn down to a seasoned broker, but I would have expected the broker to not only understand the issue, but also highlight the issue in presenting the offer to us.

I thought that maybe the buyer had misrepresented at the offer stage, but our broker's professed failure to understand the turn-down suggests that she knew from the outset and tried to finesse the package?

In any event, as matters stand, the broker has lost not only our confidence, but has also annoyed the board of a building in which she has closed many transactions. None of the board members felt good about having to turn down an applicant, and one expressed frustration that we and the broker put them in that position. I apologized and made sure they understood that there were no hard feelings on our part.

With all of the above said, despite the fact that we would not have accepted the offer had we known what we know now, I still would have approved this applicant myself were I a disinterested board member because the applicant is a professional superstar at the beginning of the serious wealth-building phase of her career. Her personal and employment references were special, plus her extracurriculars signal a seriously decent human being. I am thinking that is why our broker may have attempted to finesse the finances (and why she got approved for the mortgage), and at the end of the day, we are fine with all of it.

It seems to me that the buyer was stretching. Their liquid net worth is presumably ~20% the apt price (the down payment), and their annual nut for the apt ~10% the apt price. This seems like a young, high-income, high-income-growth buyer scraping together every last penny they have ever saved to stretch into buying a home that is will be appropriate for the next N years, even if it’s a stretch today.

I totally get it, it’s what first-time home buyers tend to do. I’m generally surprised when Keith says that most of his buyers have a diversified portfolio, with another ~20% or whatever sitting in stocks/bonds/etc. That’s not in line with my observations of how first-time home buyers work. Possibly this is colored by a lack of trust funds, parents paying, etc. in my circle of peers.

I'm sure we've had a couple of them, NADA, but overwhelmingly most are further along in their careers, buying a second or even third home. For instance, we just signed a contract today with two clients in their late thirties, both well-established in their jobs, first-time buyers after renting in the same apartment in Manhattan for 10 years.. comfortably buying a $3 million condo, 30% down, and a strong remaining portfolio.

A lot of my younger first-time buyers typically are getting significant assistance from family, and usually buy condos. I think a lot of young people wind up renting, which I think makes a lot more sense regardless of your income.

Plus AI is starting to come after the upper middle class and I think it's going to be harder for a lot of them to bounce back from layoffs. Maybe the board was thinking about this as well.

Keith, the 40 year-old first-time homebuyer is certainly “normal” now, but that’s a historical aberration. As recently as 10 years ago, it was 30 (like the many, many decades prior):

https://www.axios.com/2025/11/04/homebuyer-age-first-time

I can also believe the typical 30yo homebuyer you see these days is funded by parents, especially in our markets, but I don’t think it was as prevalent (say) 20 or 30 years ago. A sorry state of yaffairsvv IMO, but it is what it is. I imagine mcr’s prospective buyer is in her early 30s, hardworking, and upwardly mobile with a small fortune self-saved—yet is unable to buy!

* unable to buy in Sutton place/co-op

I also have a buyer having a very difficult time qualifying for some of these ridiculous co-ops over there. Highly educated, Cash buyer that would have a strong seven figure portfolio after purchase, and also a hell of a nice guy!

So far we've been told thank you but no thanks. After submitting a financial profile to the selling agent to be shared with the board treasurer.

Understanding how employees at large financial firms and tech companies get paid is a critical part of being a broker/agent in New York City.

We just sold a two bedroom at 39 power Street in Brooklyn that we listed. These were young first-time buyers in their twenties, no help from Mom and Dad because it's a condo and it's relatively affordable.

And I can add that the couple we sold it to previously, were late twenties early 30s. Very good tech/ finance jobs, purchase something they could comfortably afford.

>> ridiculous co-ops over there

I don't think MCR's coop board was being ridiculous in their assessment of the finances. The buyer wanted to put in every last penny she had to her name for a minimum downpayment and sign up for an annual nut that takes an income of many hundreds of thousands. Not a particularly fancy apt, in a pretty no-in-demand neighborhood.

This is not on you, nor for you to defend, but when most grown-ass adult 30 year-old buyers are dependent on parents for their finances, it's a sorry state of affairs... without casting aspersions to any individual broker, grown-ass 30 year-old, or parent for the state of affairs.

Yes, I agree with you. In this case the broker failed to qualify these buyers. That said, there is a reason these Sutton place co-ops trade at low valuations and can take years to sell.

Nada,
For NYC in general, due to largely unch prices in the last 10+ years and incomes growing, the affordability is better for buyers. I suspect, many young buyers - call it 35 or less - buying in top 15-20% percentile by value in NYC have always gotten some help from parents. It is just inheritance.

There is also tax free inheritance transfer by grand parents paying for grandkids private schools and college.

>> For NYC in general, due to largely unch prices in the last 10+ years and incomes growing, the affordability is better for buyers.

I doubt it. According to the BEA (which you can look up via FRED), Manhattan incomes have increased by 58% over 10 years… same as national. Inflation is up 37%, which is the more relevant number. So inflation-adjusted Manhattan RE prices are indeed down to 1/1.37=0.73x what they were 10 years ago. But I think cost of financing has approximately doubled, which when combined with taxes & common charges, would put affordability right around where it was 10 years ago as far as how these things are typically calculated (taking into account mortgage costs).

"Understanding how employees at large financial firms and tech companies get paid is a critical part of being a broker/agent in New York City."

I will suggest that how they’re paid has changed substantially over the years, and people haven’t kept up. Year-end bonuses for finance people were and continue to be the norm, and while there were some signing bonuses, and cash only, those typically happened only for fairly senior people – many likely already homeowners. Sales traders might get advances or some type of sales-performance compensation promise but again, cash-only and rare, unless they were senior with a book of clients they were expected to bring with them. As most traditional trading firms were partnerships, there weren’t stock options to be handed out – only limited- or full- partnership shares, which came with various sized buckets of tangible cash – no future valuation needed – the only issue was whether you were employed by a ‘good’ firm (i.e., old-line NYSE member firm, with the ‘right’ sort of partners - trading was not really viewed as 'acceptable' employment). With the rise of corporation-owned trading firms in the early 2000s, option-based compensation became more commonplace (not just for senior executives and managers), supplanted by rulings in 1995 on companies’ accounting treatment and disclosure of options valuation and outstanding options. Banks (which were already corporations) traditionally paid bonuses directly in bank shares, then got into options once the accounting issues were settled. Options-based compensation wasn’t legal until the tax code was changed in 1950 – one could argue that co-op boards are still in a pre-1950 valuation mode.

Tech as a highly compensated industry generating significant NYC sales essentially didn’t exist until the late 1990s. It would be interesting to know how co-ops in San Francisco have fared (my understanding is that SF is really the only other city with co-ops, and even there, they’re fairly rare), and how their acceptance practices have changed, assuming they had hurdles and barriers like we see in NYC.

So I did some calcs using Fred time series for 30 years.

$1.5mm mortgage.
Tax benefit due to mortgage amount deduction change from $1mm to $750k roughly offsets increase in pre-payment benefit increase with higher rates.
30y rates up 60%. Sub 4% average of 2014-2016 to current around 6.2%
Inflation 37%.

Better get more help in down payment from mom and dad to keep monthlies the same.

300, these home affordability calculations tend to look at 30yr mortgage payment amounts, not interest, right or wrong. A $1000K loan at 6.2% works out to about 37% more than the monthly payment on $1000K at 3.6%. $4500/mo vs $6100/mo.

But deduction effect is there, as you say. Beyond the $1000K vs $750K thing, back then a buyer was itemizing anyways because of SALT (or at least planning on it). In 2025, that’s not the case. OTOH, saving the 20% down payment is now 37% easier to acquire. But overall, I think it’s a wash.

Aaron2, that’s a fascinating history of Wall St compensation! I have one friend who was a trader of yore (had a company with a seat on an exchange, etc.), and it’s interesting how that world completely changed.

Agree. It is a more or less a wash after your factor in the inflation adjusted lower down payment.

I just did Interest. But people would look at month payments vs rent.

That makes me think about affordability of NYC vs NYC burbs where prices are up 35-50%.

Yes, that's a great history Aaron!

However, I think for the most part an agent/broker should be able to determine what is considered liquid versus non-liquid assets.

Although I always thought that a little bit more consideration should go to retirement accounts. Since at least with traditional ones the money can be accessed, although with a penalty. If it was a matter of paying a penalty to access this money to keep your home from being foreclosed on, under many circumstances I think one would do that.

Although Google seems to have their own system when it comes to their stock options that they call GSU'S

Mortgage deduction is in addition to standard or itemized deduction. For 2026, Salt Cap is going up. So at the low/mid-end people ($400k or less) may benefit by deducting real estate taxes depending on state and local taxes paid.
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But deduction effect is there, as you say. Beyond the $1000K vs $750K thing, back then a buyer was itemizing anyways because of SALT (or at least planning on it).

I don’t think you get to deduct a mortgage if you take a standard deduction. That’s what itemization covers, no?

I think…

An income earner would be itemizing pre-2018 anyways irrespective of mortgage (for income SALT). For 2018-2025, they wouldn’t because the SALT cap at $10K is lower than standard deduction (barring huge charitable contributions or something else, which seems unlikely for a $1M home purchaser). Post-2025, they will be itemizing anyways given the new $40K SALT cap is above the standard deduction.

I don’t think deducting RE taxes benefits income earners since 2018, because the income already puts them at the SALT cap (whether $10K or $40K).

Yes. In order to take mortgage deduction, you have to itemize.

Standard deduction includes mortgage interest, but within Itemized deductions (which were not limited), State and Local Taxes (SALT) were limited to 10K. So you had to have charitable deductions (call it $3-5K). mortgage interest, plus others stuff more than 15k (10k SALT) to deduct Mortgage interest. Most people in NYC will mortgage over $500k at 4% I would think were itemizing.

As someone who derives a fairly substantial portion of my income from getting marginal buyers into picky co-ops, this whole story shocks me.

Yes, of course brokers should be able to see what assets are vested and what aren't ... that's pretty much Brokerage 101 (although honestly, having explained to one of the top mortgage brokers in NYC what an RSU is, when I had a client that worked at a little tech company called Facebook, nobody's ignorance should surprise me any more.)

But the co-ops also shouldn't demand *so much* cash from their buyers -- I got one young buyer with fantastic character and a fantastic job into a stuffy Upper West Side building, and one of the first things he did was get on the board and help raise the financeable percentage and also help erase the post-closing liquidity requirements. You know what? The building's "easier" to buy into for people under 40, because they don't need to show up with 70% of the sales price, but in terms of its finances, it's still fine.

MCR, in your specific situation, where the h-- was the buyer's broker? You know I would not for one second have tried to pull that wool over anyone's eyes, and there are actually lots of brokers who are as honest as I am. And where was your broker, who is experienced enough that she shouldn't have been caught with her pants down?

And finally, where was the back channel of communication for the board to tell you, quietly, that this buyer was too light on assets but in view of her excellent character and her terrific career prospects, (and also possibly the fact that there were no other fish in the barrel and it's not a good look to have apartments on the market forever) there was room to negotiate escrow?

How about this: If 20% down is all the cash she has in the world, but the bank likes her job, and you presumably like her career prospects, then make her liquidate $100K of her retirement funds, pay the penalty, and escrow $75K for three years. If she's a high earner and she stays employed, she'll repay her retirement, and after three years, the building is more comfortable with her, and she gets her $75K back. If she's a high earner and she loses her job, the board is protected for the nine months to a year it will take her to get a new job. (Because, remember, she's young, and all those I-couldn't-get-a-job-for-three-years stories are really about ageism.)

And you know what, if she has the connections to get this kind of job in the first place, she knows someone who is going to quietly lend her that $100K.

This may sound a little fast-and-loose, but truly every party involved has fairly substantial risk protection.

The alternative is an ossification that means the only available co-op buyers are old, which isn't good for the buildings in terms of diversity of candidates available for board service, and it will also tend to eliminate diversity of shareholders because there are fewer minorities in the situation where grandma and grandpa hand over the down payment (or fund Collegiate, or similar, as 300 mentioned.)

ali r.
upstairs realty

>> one of the first things he did was get on the board and help raise the financeable percentage and also help erase the post-closing liquidity requirements

This seems like a great way to do it!

>> …but in view of her excellent character and her terrific career prospects…

I can imagine a board not wanting to get into making such non-financial judgements. Too easy for “excellent character” to veer towards discrimination (of the illegal type or otherwise), or accusations thereof. Same with “terrific career prospects”. For any storyline you give for how someone it tech, law, medicine, finance, etc. has “excellent career prospects”, I can spin a tale in the other direction.

>> The alternative is an ossification that means the only available co-op buyers are old

I dunno, here are some other alternative:

- Said buyers with terrific career prospects chill and live below their means for a couple more years while strengthening financial position. I don’t think having zero months of liquid assets is anyone’s idea of prudent financial planning. Nor is raiding retirement funds.

- Prices are another outlet. They can just come down 30% or whatever. A third less downpayment, a third less mortgage => financial cushion issue solved.

FWIW, I cringe at the idea of raiding a retirement fund to pay for what is, in the end, a pretty discretionary purchase. These coops are not basic housing. They are “Let’s sign up for $200K/yr post-tax in housing expenses!” type of housing. I’m not sure anyone really “needs” that.

The early amounts you put away have the most time for compounding to do their magic. I look at the amount I squirreled away 20+ years ago now, and it was a piddling compared to now. But compounding has already ballooned it into a formidable sum, to say nothing of what the next 20 years might bring. Will I need it for retirement? Probably not. But if my finances had taken a more typical trajectory, they’d form the backbone.

@FP, I hear you but in the end I come down where nada is; I think the board did this buyer a favor. I believe that in three years she will have her choice of coops of she continues on her current trajectory. Sure, her housing the next three years will be not as "lovely," but I suspect she will be working so much during the next few years that it won't overly matter. FWIW, I feel like this prospective buyer, like me, has an irrational preference for owning over renting. On the other hand, she did appear to understand what she was buying. During the negotiations she highlighted that the apartment was likely a depreciating asset. What became clear is that we agreed, but were not willing to part with it for below the contract price because the contract price is what it is worth to us given the totality of our circumstances.

Well, if the agreed-upon price was below contract price it's possible that the turndown would have been based on price; that's a common occurrence among East Side co-ops.

And the problem with the "just wait" theory -- most of the active posters on this board are childless or private school people, but the quality of public education is, unfortunately, tied to location, and keeping buyers locked out of their preferred locations delays/disrupts their family plans.

Rent?

I have a work colleague who bought an apt in the UEs based on school zoning… only to have the zone change on them the next-ish year.

Agree Nada, regarding retirement funds. I just think it wouldn't be a terrible idea for boards to give them a bit more weight than they currently do.

Both of these below are correct due to weird or not so weird reasons.

Many people don't like to pay as much in rent as in monthly expenses to buy. Put your money somewhere safe. Property appreciation.. Prefer more to move. Parents helping with down payment but not rent. Limited rentals in some school districts.

And I remember we got zoned out from a top K-5 school 2 year after buying. And we are closer to that school than good half of properties still zoned for that school. The new zoned school is ok but nowhere as good as the previously zoned school.
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And the problem with the "just wait" theory -- most of the active posters on this board are childless or private school people, but the quality of public education is, unfortunately, tied to location, and keeping buyers locked out of their preferred locations delays/disrupts their family plans.

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Rent?

I have a work colleague who bought an apt in the UEs based on school zoning… only to have the zone change on them the next-ish year.

>> Agree Nada, regarding retirement funds. I just think it wouldn't be a terrible idea for boards to give them a bit more weight than they currently do.

I agree with that. If the solution is “You need 2 years’ worth of mortgage + maintenance in liquid assets, of which 1.5 years may be retirement accounts that can be withdrawn (with penalty)”, that strikes a nice balance. It’s a “break glass in case of emergency” situation. What makes me cringe is breaking the glass when there is no emergency, for the sake of a charade of sorts.

300>> Many people don't like to pay as much in rent as in monthly expenses to buy. Put your money somewhere safe. Property appreciation.. Prefer more to move. Parents helping with down payment but not rent. Limited rentals in some school districts.

Sure. I’m just presenting alternatives in what was presented in rigid, existential terms.

- “The alternative is an ossification that means the only available co-op buyers are old”

- “keeping buyers locked out of their preferred locations delays/disrupts their family plans”

Yes. If you refuse the possibilities of:

- prices decreasing (in inflation-adjusted terms)
- buyers waiting until they have stronger finances
- buyers going with something smaller
- buyers refusing to rent

Then yep, we’re in a bind. Woe be the buyer looking to spend $200K/yr on housing who has been locked out of all viable options to meet their family plans.

I guess I have a hard time wrapping my head around a mindset as entitled as making family plans predicated on $200K/yr burned on housing. If you can swing it—whether now or in a few years—that’s a nice cherry on top of life! Go for it. If you cannot, well I guess you’ll have to make do with “family plans” more similar to the other 99% of the population.

The apartment we've been discussing is closer to $135K a year to carry -- which means two third-year BigLaw lawyers, say, could carry it. Assuming a couple years of work experience between college and law school, they're 30ish -- which is an easier time, honestly, to have kids than to attempt it several years later.

But maybe they're not the buyers. I do like the idea of giving retirement funds more weight; then people could get "credit" for being savers, which frankly a board should like.

OK, sure. If you’re a 30-year-old couple whose housing “needs” are such that you cannot make do, even for a few years, with housing solutions that 98.5% of the population must make work due to lack of sufficient income—many of them with older children—then you’re in a bind.

All the posts have given me food for thought, and I think I am now coming down on giving retirement funds more weight where the retirement funds are sizeable.

Additional information: Our prospective buyer resonated with me because part of her lack of liquidity is that she already owns a home elsewhere that she is perhaps irrationally attached to (in a special location, so I get it). Had she been willing to liquidate that home, she would have sailed past the board, but as matters stood, she was looking to carry two "lovely" pieces of real estate, both of which I would put in the "consumption" rather than "investment" bucket, without non-retirement fund liquidity that would survive one month should she lose her job.

Had I been a disinterested board member, given the strength of her resume and character references, I would have greenlit her risking having to liquidate retirement funds or sell her prized other home should she lose her job. Given the strength of her resume and character, the likelihood that she will get fired is negligible, and I suspect that should she lose her job due to disability or some other reason, I would be surprised if she did not have disability insurance. This is a seriously Type A high achiever we are talking about on the cusp of turning 40.

So, while I still understand why our board denied the application(as would many other boards), I, personally, would have voted to approve it. Honestly, I fault the brokers because the way the package was presented was disingenuous; nobody likes having to read too far into the package to learn there is a huge advance that is subject to repayment in its entirety if the employment does not last a full three years, and nobody likes to have to read everything to realize that securities that are listed in the assets section are not vested. It just seems like the brokers were hoping nobody would actually read the package? Not cool.

In short, here is where I come down on our particular situation: Had the package been presented honestly, I think there is a way this buyer could have gotten through. Indeed, had the situation been presented honestly to Mr. MCR and me, I likely could have worked behind the scenes to make the case. However, both we and the board were misled such that we are all just annoyed at this point.

This all feels pretty financially marginal to me, MCR. To keep the numbers anonymous, let’s say the contract price of you apt is $100.

- How much of the $100 was the buyer financing?
- How much equity and mortgage does the buyer have in their other home (relative to the $100)?
- How much does the buyer have in retirement accounts (again, relative to $100)?

So I totally understand a retirement plan say a 401k should never be considered liquid but do Co-op boards assign any value to it? Say you have $500k in a retirement plan and you are are many years away from retiring. Obviously no bank would treat that as liquid, equivalent to $500k cash. But would a co-op assign 50, 60, 70%….etc to that $500k? Would they treat it as $250k cash or do they completely ignore it when considering if the buyer has sufficient funds for carrying costs post closing for whatever time frame they like to look it.

@nada:
$80 to be financed in new purchase
$70 equity in existing real estate
$170 in retirement funds
Annual salary: $40

*some of the retirement funds come from spouse who is not working and 10 years older than the primary applicant.

*$30 mortgage on existing real estate they don't want to liquidate ($70 equity)

> *$30 mortgage on existing real estate they don't want to liquidate ($70 equity)
> $80 to be financed in new purchase

> Annual salary: $40
> $170 in retirement funds

So the new purchase price is almost the same as the existing real estate. Not knowing the exactly the amount of maintenance and real property tax on the two properties, it seems the debt to income ratio is going be high when carrying two properties.

With $40 salary and one real properties prior to this purchase, not much liquidity and only $170 in retirement funds (only 4x of their salary) unless they are early in their career (unlikely as one spouse is already in retirement) or just had a big salary raise, it seems that they were already stretching.

Yes, the debt to income ratio on the cash salary of $40 is high. The additional piece of information I neglected to share is the restricted stock portion of the compensation, the ultimate value of which is speculative and subject to vesting. For 2025 that piece is $60. The primary applicant is only 40 and just ascended to the high salary. The non-working (but previously employed) spouse is 50.

Thanks for the additional info, MCR.

At a high level, the finances seem fine. I think the $40 cash salary becomes $20-25 after-tax / after-retirement in this situation, and she was looking to spend half-ish to carry the two homes and half-ish on other expenses. The $170K of retirement funds would not support that kind of spending now, but she’s only 40 and has time in the market on her side as well as $60/yr of stock-based comp. This is a purchase she can support long-term.

The issue here is the following. Her income is substantial, equal to the “$100” price of an MCR apt. Her net worth is solid given the age, at $260. Yet she is looking to YOLO herself into a situation where she is living month-to-month, for a while anyways. She had a fine emergency fund in the form of $20 (assuming it was held in cash or similar), but she wanted to use that as downpayment into a second home.

Having a $0 emergency fund is kinda a financial no-no. I’ve recently been exposed to concepts of “financial order of operations”, and building an emergency fund is high on the list—basically after paying of high-interest debt like credit cards but before everything else. This move would have reversed that.

We have had one, long 17 year bull run in stocks without a real recession. This person’s adult career coincided with that. This under-40 cohort is half the workforce, and all they have ever known is milk & honey & FOMO. But this type of thing can turn on a dime with everything hitting simultaneously. Consider all of these happening at the same time:

- Stock market cut in half, meaning the retirement fund drops to $85K.

- Job loss due to layoffs. During a recession, even great people get laid off, especially if they’re the new hire. Finding a new job can take a long time because no one is hiring. And contrary to popular sentiment, a place like McDonalds is reluctant to hire overqualified people who would do excellent work because they know the person will leave as soon as an opportunity arises.

- A 10% drop in RE prices becomes 20% if you “need cash now”. After paying transaction costs, the MCR apt is underwater… so why bother, especially if you need to be in NYC to find the next job.

At this point, the choices are to panic-sell 25% of your $85 retirement fund to float yourself for a year, or else to fire-sale your $70 equity in the second home down to a $40 level so you can spend half of it.

Is this dire scenario likely to play out? Absolutely not, and you should certainly not run your finances based on such doomsday predictions. But you probably *should* at all times have $20 (or $10) in an emergency fund, not $0, when your net worth is $260.

Sorry, I had it a bit wrong. The emergency fund is priority #1 (out of 9), coming before even paying off high-interest credit card debt:

https://www.bogleheads.org/wiki/Prioritizing_investments

Not being able to pay even one month’s expenses without taking drastic financial measures is just ass-backwards for a person with otherwise prudent finances. Maybe the board was reacting to this, in addition to the obfuscation of the true situation.

Yes, a reasonable turn down for sure, but I still would have let it go through. :)

Thank you for both the exercise and the input; I found both helpful!

Worth highlighting again that this was bad brokerage all around.

@Ali - I agree. Disappointing.

One of those having to learn the hard way situations. Good luck mcr -

Perhaps you need to reevaluate the process by which you choose who represents you. And by this I mean pay less attention to the pitches which focus on the agent's ability to find buyers (which is what they usually focus on), and more on how they represent seller's interests even if that means not putting deals together which won't close.