Remember the game “52 Pickup”?  It’s the “trick” played by a practical jokester on an unsuspecting victim who must pick up 52 cards that have been scattered willy-nilly on the floor.  “That’s what the board packages we get look like sometimes—especially from the larger firms where there seems to be less supervision,” says Jane Bayard, Warburg’s Executive Vice President.  She’s describing how sometimes what we get from our co-brokers makes no sense.  “It looks like the papers have been literally dropped on the floor, then picked up totally out of order and reassembled haphazardly with no thought to logical sequencing of information and with numbers that just don’t match up.”


Generally, at least 2 people are responsible for submitting the buyer’s application to the co-op board:  the buyer’s broker who guides the purchaser through the process, and the seller’s exclusive broker who reviews the package and recommends changes when necessary.  At Warburg, a Manager also goes over the packet adding another set of eyes to catch inconsistencies or omissions.


Lately I’ve been asking my sellers’ attorneys to add a provision to contract riders that reads:  “Purchaser shall submit a copy of the purchase application and supporting documentation to seller’s broker prior to submission to the Managing Agent or the board.  Purchaser shall incorporate all good faith comments made by seller’s broker to the extent same are accurate into said application.”  I find the additional contract proviso helps to solidify the fact that the board presentation needs to be a joint effort between buyer’s and seller’s brokers. 


Timing is a critical element in assembling the package.  Unless a change has been made to the boilerplate language of the Contract of Sale, the presentation is due 10 business days after the delivery of a fully executed contract, or if the purchase is being financed, 3 days after a commitment letter is received.  To avoid a mad rush, co-op buyers should begin planning at the time their offer is accepted by assembling required financial documents and enlisting reference letter writers.  While requirements may vary from co-op to co-op, the main ingredients are constant:  application form, financial statement, back-up documentation, tax returns, and references.


Keeping It Simple


Above all, board packages should be clear and easy to understand.  When I review a presentation, I sit with post-its and legal pad at the ready to jot down my questions.  If I don’t understand something, it’s safe to assume that a board member with less patience and less personal interest will be similarly perplexed.  A request from the board for additional information creates delays and breeds negativism. 


Since an individual’s finances are fluid by nature with changing deposits and withdrawals, it’s best to select a single date to define The Statement of Financial Condition:  “As of ___ unless otherwise noted.”  I typically choose an end of the month date to correspond to the latest monthly paper statements.  If received quarterly, this should be noted.  If there’s a reason to include additional computer generated pages, make sure that a name as well as account number appears on every sheet.  All pages of every statement are required.  I circle the numbers on the statements that correspond to the numbers on the Financial Statement so board members can follow along without difficulty. 


Every line item in the Financial Statement requires hard copy verification either in the form of a monthly statement or letter from a qualified source such as an accountant, broker or appraiser.  I round off numbers to the nearest dollar, and I make sure they match up throughout the application—which means that the income noted on the application should be exactly the same as the income stated in the Employer’s Reference Letter and shown on the Tax Return and Loan Application.  If inconsistencies exist, they must be explained.    


Often the basic forms provided by Managing Agents don’t allow for presenting increasingly complex financial profiles, so more often than not, I provide additional detailed spreadsheets.  I let the specifics of each case dictate how I will organize the information, but I always separate numbers into different asset categories such as cash, equities, bonds, real estate, retirement funds, etc.  I specify the name of the account holder, the institution where the assets are held, and show subtotals for each category.  I arrange back-up documents in the order they are listed, and provide summary sub-divider pages for each asset class.


With respect to references, I offer samples to illustrate that letters need substance and can’t be generic.  I help buyers to determine which writer is best suited to present a certain aspect of a person’s profile such as family background, educational achievements, business accomplishments, philanthropic interests, and leisure pursuits.  I suggest that writers submit a draft in advance of final copy, so they are more willing to accept any changes for revisions.  Nearly always, I ask the purchaser to write a cover letter to the package which not only sets the tone for what follows but also presents an opportunity to explain certain elements of the package upfront. 


The broker’s responsibility is to present the purchaser in the best light possible.  It’s rare to have a second chance to make a first impression.