Anyone who has ever undergone the process of applying to be a shareholder in a New York City co-op knows how exhausting it can be, not to mention stressful. From securing a loan, to culling financial documents to be reviewed by a co-op board, to the nervous jitters of having to be interviewed, is there anything pleasant about it?
If things go smoothly - and they should, if prospective buyers do their homework and have a good idea of what's expected of them - there is, of course, the reward: an apartment of one's own in a secure community environment. In New York, this is nothing to sneeze at. But what about the horror stories that have made the news in recent years?
In 1997, there was Broome v. Biondi, a case in which a biracial couple was awarded $640,000 by a federal jury after alleging discrimination when they were rejected by a co-op in an exclusive New York neighborhood. But, most people in the business, from managing agents to brokers to real-estate attorneys, assure that such cases are rare. The co-op application process, however, can be sensitive and sometimes litigious territory, even if the object of contention is not your income or your occupation, but your terrier.
"It's a very invasive process," says Carol Shainswit, a senior associate broker with the Corcoran Group. "Becoming a shareholder is like gaining admittance into a club, so to speak. Different co-ops have different admission requirements, but in general, your neighbors want you to be like them."
Clubhouse mentality aside, prospective buyers should be just as choosy about the buildings they approach as boards are in screening applicants. Working with brokers is a good way to find an affordable building with a compatible environment. Wise to the lay of the land, brokers have experience working with particular boards and will be able to provide more nuanced profiles of co-ops. Like people, buildings can, generally speaking, be characterized as "types," and a broker can make the job of finding the right one a lot easier. Likewise, brokers can steer clients away from buildings that aren't quite the right fit.