For the titans of American capitalism, it’s a bracing experience to be told you must conform to the requirements of a co-op board application. Yet this is what New York co-op protocol demands of all, from new money to Rockefeller.
The co-op board application process isn’t elegant or normal. It’s dehumanizing. It reduces people to numbers on a tax return. It can make a dear friend call into question your financial stability. But resistance is futile.
“You get rogue clients all the time,” says Brian Lewis, a Compass broker who lives in a co-op building. “Just the other day I had someone who literally didn't want to show his tax returns. I had reminded him at the beginning of the process that it was something he would be asked for, and I think he thought that he was higher and mightier than that. He thought, ‘If the president doesn't have to show it, I don’t.' But co-op applicants do.”
“With a co-op package, you are basically opening your kimono to the board. It’s your entire financial life laid bare on a piece paper,” says Toby Cohen, real estate attorney with the firm Holm & O’Hara.
That’s why a cover letter, also known as a personal letter, can sometimes work magic on a board.
Remember that in addition to financial information and reference letters, your co-op or condo application must include a written insurance quote or active insurance policy—on an apartment you are not even approved to buy yet. Fortunately, the co-op and condo insurance insurance experts at Gotham Brokerage can provide exactly what you and your board need in a fraction of a business day. They’ll also swiftly accommodate any changes (for example, if your closing is delayed), and fully refund any policy costs if you don’t complete your purchase for any reason. Click here to get started.
“The purpose of a cover letter is to humanize the board package,” Lewis says. “The board, by the very nature of the process, wants you to be a number. They want this to be all about your financials, because they are governed by law not to question you on specific things.”
It’s always worth recalling that the board members who review packages are volunteers and they don’t necessarily have the time or training to interpret complex financial statements. It’s often the building’s attorneys who review those documents, then give the board an opinion.
“What the board is really going to be reading is your cover letter,” Cohen says. “The cover letter allows you to give the board the bullet points. You are giving them you highlight reel. You are trying to make yourself look as good as possible and kiss up a little.”
But, like all concerns co-op related, there is etiquette to the cover letter that tops your board package.
Cohen says that many of his clients hire consulting firms to help them put their best foot forward. Those firms will help you prepare the perfect letter for a fee. However, that’s really something that your broker ought to be doing for you, according to Lewis.
“It's important that you run it by your broker, if you have representation,” Lewis says. “Even if you don't have representation, the seller's agent will help, because everybody has the same goal, which is to get you a set of keys. Listen to the agents, because we do this every day, and without good, successful board packages, we don't get paychecks.”
Letters of recommendation should be sent on personal letterhead and perhaps even scrawled out in longhand.
Cover letters, on the other hand, must be more to the point. Print yours out on normal copy paper and use Times New Roman for your typeface instead of something flashier.
“It's not the time to show identity through style,” Lewis says. “It’s about getting your message across. You don't want to stand out or be remembered for the wrong reason. Like, ‘Oh yeah, that lady had the perfumed paper.’”
All co-ops are looking for a shareholder who is three things, according to Lewis: “quiet, boring, and rich.” Your cover letter should reflect those beguiling attributes.
The cover letter is ultimately your place to shine. It should not be negative. However, it is also an appropriate place to gently broach sensitive subject matter that might be misunderstood if pulled out of context.
“If there is a nuance and a filter that you would like the board to visualize the package through, this is a nice way to introduce the concept,” Lewis says.
For instance, what if your parents gave you a large financial gift, or paid your security deposit? To the board, this could appear to be evidence that you cannot fully support yourself, and that you may someday be unable to afford maintenance. But in the cover letter you can explain: “Although I am receiving a large gift from my father, it was given as a vote of confidence in my future. As you can see, my liquidity supports this purchase, even without such a gift.”
“It’s the moment to put your spin on it,” Lewis says. “It's a gentle way to guide the board into a perception.”
Other common situations that be treated with a golden veneer in the cover letter include earning income as an independent contractor, and changing jobs. For example: “As you will see, I started my job at Mt. Sinai Hospital only a few months ago. However, I have been in this industry for the past 15 years and I have had consistent employment. My reference letters will reflect that as well.”
If you are a 1099 employee, whose incomes bobs with the economy, your approach should focus on your strengths, like this: “I am an independent contractor. I provided the past few years of my income, but I can also go deeper. I have been it the industry for many years and have consistently made money. The worst year I had was this. The best year I had was this. However, I average this.”
“Sometimes you have almost lead with your flaw and almost throw a spotlight on it,” Lewis says. “But only if it can be explained away or you can control the perception of it.”
Brevity is a must. Do not exceed one page.
Within that page, it's reasonable to think that flattery will get your everywhere in life, including into some the city’s most exclusive buildings. But no one likes a toady.
“Everyone knows that this is an opportunity to kiss up a little, so just make sure that it’s a true compliment,” Cohen says. “If there is a specific architectural detail you love about the building, absolutely put that in. But don’t say something like, ‘This is the best-looking board I can remember.’”
Discover off-market properties in your dream neighborhood that perfectly suit your needs and budget. Meet and deal with sellers before their apartment hits the market.
