Any brokers, coop board members, or buyers - notice any change in how Boards vie buyers?

Excuse, me "View" buyers.

Prior years of income comprised largely of bonus money will not impress many boards these days--they'll be judging much more on actual pay-check salaries and liquid assets. Type of employment will obviously matter in terms of assessing relative job security of applicant. This isn't really a surprise, right? It's pretty common sense, which despite what some might say, is what guides most boards.

Me thinks if you tell them that you prefer not to be "judged", that in your personal life, you find that the more you judge people, the less time you have to love them. This should help win over most Boards.

Patient09, I should have added that--good advice. Also, I find boards like spunky buyers not afraid to display some cockiness to cover up weaknesses in their applications by telling the board that some things are none of their business.

patient09: Exactly. Before voting on an applicant, the Board of our old co-op always asked themselves, "What would Jesus do?" Buyers should anticipate that kind of thinking.

Can Boards seriously think any job/ industry is "safe" or any job "secure"?

Triple: your question is flawed. Boards aren't looking for certainty. They are seeking to limit risk. They tend not to be stupid people. Some jobs are riskier than others goes without saying. An I-banker still operating a piece of Lehman's brokerage would seem a dubious candidate right now. A tenured b-school professor with substantial assets from a prior career in finance is a low-risk right now. Yes, some jobs/industries are much better bets today. This is an era where slow and steady wins the race. The go-go era of zillion dollar bonuses is over and the appeal of those who depend(ed) on bonuses is gone for coops. But plenty of professionals are still attractive if they have the right finances. The question you pose suggests if a board can't achieve certainty they should just approve everyone. Or am I missing what you are trying to raise?

kylewest: I am simply saying that it is very challenging to accurately assess anyone's job security in this environment. From teachers to public servents to bankers to advertising execs to scientists. I was making a comment on the very uncertain and volatile time we are living in. I was sort of implying that Boards shouldn't approve *anyone*.

And disclaimer, this is not meant as a challenge, I am simply curious: What do you think the "right" finances are? In your opinion (or anyone on this board), what % of income can come from a bonus without sending up flags? How many years of mortgage + maintenance would you expect a buyer to have after down payment + closing?

My own disclaimer: I am not currently serving on a board, but I have. Today, I would discount any bonus income and view the applicant as if there were no bonus coming in coming years. Then require minimum of two years of maintenance and mortgage payments in conservative places (bank, CDs, money markets) with some money left over if the unit clearly needs renovations and to account for life's unexpected expenses for the next two years. I'd look at length and type of employment, how many incomes the buyer's have, how much other equity, debt and fixed expenses they have (car loans, summer home, investment properties), and I'd carefully scrutinize account statements and tax returns to look for any flags suggesting recent money transfers that could be suspicious(like a parent loaning the buyer $250,000 to keep in a checking account to make it look like the buyer has greater assets than s/he truly has. I'd ask questions about where such funds came from and how they were acquired and check this against tax returns. I'd be a complete hard-ass because things are likely to get tougher and whatever level of risk a coop found acceptable in the past should be lowered a few clicks for the foreseeable future.

"but I have BEEN." left that word out of first sent. above. sorry if it confused.

Kyle: what if one is retired and will pay cash for the apt. How much more in liquid assets do they want to see?

Another thing smart Boards are aiming for is diversification. An orthopedic surgeon is a great candidate for most buildings... but if you're around the corner from HSS and half the building is orthopedic surgeons, maybe you think twice about concentration risk.

I would think boards would look at this differently based upon their own occupations. So a building with many people in education, arts might be more 'understanding' about others in those fields, vs. a building with many people in law - they might be less fearful about law school debts? But then again this would be opposite to what West81st just said.

Would also figure that this could be difficult for people who are consultants, freelance, creative fields or are recently out of graduate / medical school?

All cash deals are fine but I still would want to see what the retiree's yearly income is (pensions, SS, investments) and be assured that there was well in excess of two years of reserves if this person is no longer earning money.

As for artists being more lenient, my experience is that as people have more to conserve, they become more conservative. At least financially. On a coop board, don't count on too much leeway here.

And for all I've said, obviously the type of building matters enormously. All one bedroom and studios in a building that attracts mostly young people is one thing; an upscale coop on Lower Fifth or established upscale building on the UES is going to be very different. Across the board though, requirements are and will be getting stricter than we've seen in a generation. I'll call it a prediction, but it seems more common sense than prescience.

tandare: I think we're both right. Smart boards like economic diversity. Dumb boards like people who resemble themselves.

Of course, if the whole local economy heads south, diversification only helps so much.

P09 :"Me thinks if you tell them that you prefer not to be "judged", that in your personal life, you find that the more you judge people, the less time you have to love them. This should help win over most Boards"

Gota try that one... u r funny.

Bonus money, what bonus money?

My husband has a normal job, but I have a "portfolio" career -- I have two professions, publishing and real estate. I am going to attempt to pass a somewhat difficult board by arguing that my contractual writing and editing income alone will put us at a 30% ratio of household expenses to income. In other words, I am treating my real estate income going forward as zero -- although the history of my tax returns would suggest otherwise.

It would not surprise me at all if the board still finds us marginal candidates and asks us to escrow some funds.

ali r.
{downtown broker}