When it comes to buying a co-op apartment, there's often a
disconnect between how the application process works and how people think it
works. Not surprising, considering "it's a system that prides itself on the
mystery about it," observes Barbara Corcoran, founder of the Corcoran Group.
Unfortunately for buyers hoping for transparency, much of the mystery is
legal. Co-op boards do not have to disclose what they are looking for in a
buyer or why they reject someone - so they don't.
Indeed, a co-op board may not discriminate for race, gender or religion.
"Other than that, the board has discretion," notes real estate lawyer Lisa
Breier Urban of Manhattan.
Prudential Douglas Elliman executive vice president Jacky Teplitzky says,
"Figuring out what a board is looking for is more a mystery game than fact. The
boards won't say because it opens them up to liability. On buildings we have
never sold we are like FBI and CIA agents. We call managing agents and owners.
We compare notes with other brokers. We ask friends."
What about the co-op board scare stories? The couple rejected because of
the wife's Hollywood hair or the husband's gold chain. The dog that failed the
"Urban myths," says Corcoran. "Being rejected is a public embarrassment.
You have friends providing references. People will write it off to the board's
unreason. This perpetuates the myth."
When Scott Shuster, former ABC News correspondent and now head of his own
business event planning firm, tapped his best references for his midtown
Manhattan co-op application last spring, he had a face-saving plan. "What would
I have told my references if I had been rejected? I had a strategy in place.
Lie. Lie. Lie."
"The fact is," Corcoran said, "nine out of 10 [applicants] are rejected on
paper for financial reasons and never meet the board."
Sylvia Shapiro, author of "The New York Co-op Bible," sees a more mundane
explanation for initial rejections. "Frequently, applications are incomplete or
inaccurate, requiring the board to request additional information ... a
process that can assume a life of its own," she says.
Although they vary from building to building, most applications require tax
returns, bank statements, documentation of assets and liabilities, credit and
employment history as well as references from colleagues and friends. "Often
neither the buyer nor seller is aware there's a problem with the application,"
Shapiro says. "Many of them don't get actively involved, abdicating the
responsibility to brokers."
Shapiro finds this reliance a problem in the overheated market, "where
there are many relative neophytes who may lack the financial expertise
necessary to fully understand and represent a buyer's financial condition."
What can a buyer do? "Get more involved in the application process,"
Shapiro advises. "If you don't feel qualified, have your lawyer or accountant
look over the application and get it right."
If an application is approved, the next step is the board interview, a
dreaded ritual, but in reality, Teplitzky says, "it's 90 percent a done deal if
someone is invited."
Judy Strauss, managing agent for Sennesh Properties agrees, "The only
reason someone would be rejected is if they show up insane."
Taking no chances, many brokers coach their clients.
Before an interview with an Upper East Side board, Sean Gibbons was sent
tips by Teplitzky's team. "I'm from Boston. We don't have co-ops. I found the
entire process ridiculous," he says. He heeded the tips, however, and zipped
his lip. He closed on his co-op in May.
Says Teplitzky, "No one was ever rejected for being too boring."
The famously rejected
Co-op board silence on rejections has not prevented the gossip mill from
churning, as author Steven Gaines illustrates in his book "The Sky's the Limit:
Passion and Property in Manhattan."
Gaines' list of celebrity real estate smackdowns includes:
19 E. 72nd St.
Initially approved by the board, the disgraced president withdrew his offer
after residents rebelled. Nixon then tried to buy a condo - where there would
be no board to turn him down - but withdrew after a group of residents sued to
bar the sale. The condo owner, Democrat millionaire developer Abe Hirschfeld,
refused to refund the humiliated Nixon's $92,500 deposit.
435 E. 52nd St.
Flush with success from her new line of jeans, the mother of newsman Anderson
Cooper tried to buy a co-op in the River House. Vanderbilt sued. The board
zinged her back by disclosing that her cash assets were not the $7.6 million
claimed in her application but $215,000. Vanderbilt dropped the suit.
The San Remo,
145 Central Park W.
According to Gaines, who also has written a biography of Calvin Klein, "Calvin
and Kelly were rejected because The San Remo was afraid they'd throw wild
parties." The Kleins wanted to buy the apartment of Robert Stigwood, the
producer of "Grease" and "Saturday Night Fever." In the mid- 1980s, The Kleins
became the second famous couple rejected by a co-op board. Madonna and Sean
Penn, who were briefly married, were rejected in 1985.
320 Central Park W.
Looking to buy Barbra Streisand's co-op, Mariah Carey met the board in bare
midriff, a style she favored at the time, surrounded by three bodyguards who
she insisted stay for the interview. A board member trying to be hip confused
rap impresario Puff Daddy (Sean Combs) with the then recently slain rapper
Biggie Smalls and asked "if Mr. Biggie might be visiting the building?" Carey
is said to have replied, "Mr. Biggie, he be dead."
and Melanie Griffith
The Dakota, 1 W. 72nd St.
The film-star couple were turned away on paper. The Dakota, Gaines notes, is a
fickle building that has welcomed showbiz residents such as Rex Reed, John
Lennon and Leonard Bernstein, but rejected Billy Joel and Cher. - D.Z. Stone
In meeting the board, less is more
Interviews can range from informal to a formal 'hot' seat. Jacky Teplitzky
offers the following interview pointers:
Prepare for a lack of privacy
Know your application
Couples should decide in advance who will answer which questions
Dress-up and be prompt, as you would for a job interview
Unlike a job interview, do not try to sell yourself
Never volunteer information or engage in unsolicited conversations except for
basic cordial remarks and greetings
Do not ask questions - save these for your broker
Be prepared to answer questions on proposed renovations
Do not expect an answer at the end of the meeting
Remember, a short interview is better than a long one - D.Z. Stone