After 2014’s havey cavey retreat from apartment buying, I renewed my rental lease for a year. I calculated that I could go back to the hunt in spring 2015, and have a new place by the end of the lease in the summer. (My landlady jacked up my rent by a $100 at the last minute, but one suffers these slings and arrows as a renter in this city.)
Determined to chart a different course this year, however, I started looking into sale ads in June. (My earlier plan to start in May was slightly delayed by a personal quandary that had brought into question the whole issue of staying in the city long term.) During this hunt, I decided not to engage the services of a broker, since I had felt too much pressure in that relationship last time.
What this meant was that I would look through sales listings, visit open houses, and contact the sellers’ brokers directly. To my dismay, the kind of apartments that had been listed at around $180K last year were now being placed on the market for $249K. In fact, the apartment I had turned down was on the market with this new tag. When you consider that most of the buildings require at least 20% as a down payment, that was a significant jump in the initial outlay.
While I briefly considered getting in touch with the broker for the apartment I had ditched last year, I probably took too long (as in, a week)—the listing disappeared quickly. The inventory for apartments in my price, size, and location range seemed low.
One week in mid June, however, I saw a listing that seemed appropriate so I called and set up an appointment for a showing. It was short notice, so I went alone and a young broker showed me the apartment. It was listed as 700 square feet but was likely close to 580—this inflated advertising happens routinely. While the bathroom was updated, the rooms were small and the bedroom had no closets. But there was a full galley kitchen and the location was a block from the local train stop. The broker also promised to find out about the possibility of bike storage in the basement.
I convinced myself that the proximity to the train and the reasonable price were a decent trade-off for a smaller space that needed some work. I went back with friends who agreed with my assessment, and the bank verified that it had approved mortgages to this co-op before. I made the offer my email and after some minor back and forth, the sellers accepted.
The next step was to get the lawyers to talk so the seller’s lawyer would send the contract to my lawyer. The broker had already sent me an application form, which I forwarded to my lawyer along with a binder that the broker wanted me to sign. She looked at it and suggested modifications, and I signed and sent it off to him. Having done that, I then sent my lawyer some suggestions on what I wanted to include or change in the contract (after she asked for them).
As a first time buyer, I had no real expertise in the matter, so any ideas I had came out of researching contracts online.
She approved of them, in any case, especially as some appeared to be standard (such as requiring disclosure if there were weird smells in the building or someone had kicked the bucket in that apartment).
Following my email approval of the modified contract, I met her in person to go over it and sign the papers. She would then send the signed contract to the seller’s attorney, who would obtain the signatures from the seller, put my accompanying 10% deposit check in escrow, and return the signed contract (which was then termed “executed”).
This process, which I thought would happen in a week, took over a month. For one thing, the seller’s attorney was on vacation and then took several weeks to get the three (!) sellers to sign. In the meantime, I had reviewed the application for the co-op board and gathered the required documents:
two pay stubs, two years of tax returns, bank statements and asset statements, forms allowing the co-op board to check my credit report, forms about accepting their pet policy, a letter from my employer verifying my job history, title, and “likelihood of continuing employment,” two letters of reference from non-family members, and a letter of recommendation from my current landlady.
Getting the letter from the landlady involved an exasperating, Who’s-on-first-like exchange; she was convinced that I was asking for a letter that would relieve me of the responsibility of handing back a clean, undestroyed rental apartment. Another of my referees was a friend who was kind enough to mail me a letter from a different country while on vacation!
Once I had the executed contract, I met with the mortgage banker and signed paperwork for almost an hour to apply for the mortgage. (I had obtained a mortgage pre-approval letter from him in a prior meeting earlier in the spring—I had had to submit the preapproval letter, along with all the above-mentioned paperwork, when I made the offer on the apartment to the broker.) This meeting meant that I was formally applying for a mortgage on a specific property for which I had signed a contract. It involved not just signing forms but putting down several hundred dollars for a refundable application fee.
That done, I waited for the mortgage commitment letter to arrive, which took under two weeks. During this time, I received more instructions on what the bank needed (such as a copy of my rental lease and a “profit/loss” statement.) Once I had the commitment letter, the co-op board application was nearly complete.
Before mailing it, I went back to the bank and obtained money orders for several hundred dollars in application fees to the co-op board and the building’s management company.
To these and the other paperwork, I added a money order brought over hurriedly to me the previous evening by the broker—that was a fee for moving out (which was to be paid by the seller).
Are you with me yet or have you collapsed from fatigue just by reading about this?
Well, once I had this paperwork and the money orders, there was one last step—I went to a bodega that had a copier and made copies of several documents for my records, and also made copies of a photo ID, as required by the application. Then I tramped over to the post-office and mailed the whole shebang out for another $20 dollars so it would get there overnight.
Once I received notice that the packet had been delivered, I breathed easier, only to be startled a few days letter by a letter from the bank that asked me to sign three forms and send them to the co-op. They also specified that the forms could not be copies but must have original signatures. After asking my mortgage banker about them, he said I should have included them with the application.
I had a minor coronary about why he hadn’t instructed me to wait for these even after receiving the commitment letter. He brushed off my worries, and just said to send them on now.
Concern unabated, I texted the broker and emailed my lawyer for advice; the broker seemed clueless but contacted the management company with my question. They suggested I send them the forms. In order to ensure that they didn’t get mixed up and lost, I decided to take them in person to the office, but when I called them to ask if that was okay, the staff person said that they’d just email any paperwork they receive to the concerned co-op board; this was a problem because of the original signatures required from seller and buyer.
The broker said he would contact the management company on my behalf again when I explained the problem to him. But as we were waiting to find out what was to be done, my lawyer emailed me back. She explained that I should hold on to the forms and we’d get them delivered to the co-op board separately at a slightly later time since the co-op board didn’t require them and they were thus not part of the application—we just needed to get them signed by the board before the closing date. Relieved, I told the broker what she had said, and we agreed to just wait for the board’s review to be done and for them to call me in for an interview.
We didn’t have to wait long. Only a few days after this conversation, the broker called to let me know that the management company had contacted him to say that my application had been denied. As is typical in this city, they offered no explanation. The broker speculated that the board thought the price was too low and asked if I’d consider raising my offer. Now as per my research, if this is the case, the offer may be raised but the seller makes up the difference to the buyer. So I told him to check if this was genuinely why the application had been declined. He agreed but suggested I ask my attorney to contact the co-op board’s attorney and ask as well.
Sufficeth to say, I did not hear much after this. The management company returned my money order for the refundable move-in fee with a letter formally denying the application. It was dated August 25th. They had received my application on August 13th. Most reviews by a board take a month. I’ll let you do the math and decide the probability of the board convening within 10 business days of receiving my application in late summer and making a decision on it.
And so ended that chapter of my NYC apartment hunt.