After submitting a bid and having it accepted, you could still face one last hurdle in your quest to purchase a property. You might have to face a co-op board of directors. If the board approves of you, the transaction can continue moving forward. However, if you are rejected, your purchase will be blocked. If you have an upcoming interview with the board, here is what you need to know.
Why Would the Board Reject You?
There are a number of reasons why a board might reject a potential buyer, but some reasons are more common. For instance, the board could disapprove of a person who has been involved in a lot of lawsuits. As part of the background search of potential buyers, if multiple lawsuits are uncovered, the board might feel that you are a risk.
The board could also reject your attempt to purchase if it feels that the property will not be your primary residence. The board members want to be sure that someone is available to provide the care that the property needs on a full-time basis. Even if you are planning to lease out the property to others, the board could disapprove. The members might question whether or not the tenants you choose would be suitable.
How Can You Avoid Rejection?
One of the most important steps you can take to avoid being rejected by the co-op board is to work with your real estate agent to determine if there are any red flags in your background, finances, and current lifestyle that could trigger a rejection. As an agent, he or she is familiar with the interview process of co-op boards and can be instrumental in helping you pinpoint areas that could be problematic for the board.
Once you are aware of what could cause an issue for the board, take action before the interview. For instance, if you have been involved in a number of lawsuits, take the time to write out an explanation as to why. If it was for business purposes, state that.
If the board is unsure whether or not you will live in the residence full-time, you need to reassure the members that you will. You might have to offer to pay your maintenance fees in advance as part of convincing the board, but it can be worth it.
Your real estate agent can help determine what other measures you need to take prior to the interview to make yourself more desirable to the board.