My wife and I currently do not qualify the 25% ratio requirement set by the board. Since my wife works for her dad's bunisess the agent told us to get a letter from the business stating she would get a increase in her salary. With this letter and our current income it will meet the 25% ratio. Obtaining this letter would not be a problem, but my concern is will this raise a red flag with the board? If we get rejected by the board because of the letter or not meeting the income ratio requirment, would we get our deposit back.
It depends on the board, obviously, but of course such a letter is a red flag -- you're asking them to trust you.
That said, many boards would. The logically next step of due diligence for them would be to get your Dad's CPA to give them last year's financials of the business, so they can see it really exists, and to ask you to escrow some mortgage and maintenance payments "just in case."
Most boards, having taken those steps, will then pass you.
Not one to look back, but curious why this is coming up now. It's not clear from your post, but when you ask "would we get our deposit back", I'm assuming you're now in contract, and have already submitted your deposit. Your (buyer's) agent - if you have one - and the listing agent would usually have reviewed your financial qualifications (assets & income) prior to accepting your offer, to see if the financials could actually work for you. Presumably, the listing agent would have had a good sense for what the Board wants to see in the way of an income ratio, and would have shared that info with you and your agent beforehand.
Ditto to what Ali R says - often income ratios are not absolutes, and are just part of the overall qualification picture, so there can be ways to compensate for that, DEPENDING ON THE INDIVIDUAL BOARD.
Double Ditto to kylewest - it's your attorney's job to protect you AND your deposit.
Those admissions committees and boards I have served on would not like some promise of future money coming from a family business. If the raise is coming, then why not just make it immediate? Family business would already concern me insofar as the financials are more easily manipulated than someone drawing a salary from a non-family job. I'd look very hard at the current and past financials of the applicant for consistency and well-established patterns of income. I would not be interested in applicants who "show promise" for future earnings. That isn't how it works.
kylewest - in your experience, what would you have considered as more heavily weighted, investments in stocks and cash instruments or a person's base salary? yes, both are important, but which shows greater stability?
Salary. Unless the investments were such that they were low-risk and income generating like a trust fund or government bond fund or the like. We didn't like the idea that someone would potentially have to liquidate something to pay their mortgage and maintenance if the bonus check didn't come that year. Ideally, we'd look for solid earning history as well as some savings/investments. That is what most buyers we saw had.
how does that make sense especially these days when a job is more out of one's control. investments are bankable, whereas a salary as many can attest, is not
It's all relative. I was saying all things being equal, I lean toward a strong employment history, but don't discount investments. It's a balance. Someone with a shaky job and $250,000 in Yahoo stock is not really any better than a trader with a salary of $60,000 and a bonus for each of the last 3 years of $200,000 with minimal money in a portfolio.
Many jobs are not subject to bear markets as much as others. Teacher, lawyers, doctors, all sorts of government positions, established businesses owned by the applicant... Not everyone is an IB or broker.
In the end, though (and perhaps I should have been clearer before) it is ALWAYS the total package. There may be deal-breakers revealed in the application package (recent bankruptcy filing; involvement in ridiculous number of lawsuits; atrocious credit score), but there is rarely a stand-out single thing that results in approval. Approvals come from a combination of long-term demonstrated consistentcy, responsibility, financial stability, generally being someone others want for a neighbor.
Kylewest - very helpful comments on board approval considerations. In your experience, how flexible are the "liquid assets" requirements? I am not talking about the standard 2 years of mortgage and maintenance payments, but the ones that require a lot more. I've encountered a few listings where the broker says something like "the board requires close to the purchase price in liquid assets after closing". So I am just wondering whether it's worth it to try to convince them that our income, good credit history, stable jobs, etc. more than overcome some shortfall of assets, or whether it's just a waste of everyone's time. Thanks.
being a board member who has reviewed many applications--my suggestion would be to:
-temporarily raise your paycheck three months prior to the appropriate amount to pass the board
-reduce the salary to a lower amount to equal same annual salary for the rest of the year after you pass the board
newbuyer99 - Re "liquid assets requirement" - it depends largely on where you choose to play. You're right - I know that many of the high-end, "prestige" buildings require liquid reserves in the amounts you describe. But many, probably most, of the typical doorman "luxury" buildings would be absolutely fine with 24 months of m + m after closing, all other financial parameters being up to speed, though some neighborhoods tend to be more "reserve friendly" than others.
Just for comparison, I'm a buyer broker who works almost exclusively with first-timers, so my niche is that studio or Junior-1, anywhere from the high 200K's to the mid 400K's. Every Board (naturally) is different, but most of these buildings would be fine with 12 months. And there are situations where six months could work, as well. As always, in situations where there is "multiple buyer" interest, it's a situation of "out-qualifying" your competition, as much as meeting the minimum threshold of the Board.
In this price range (at least), I'm always told by the listing agents that it's always the "big picture" of a buyer's qualifications, not any one "absolute" factor. Though each listing agent (and Board) has minimum income ratio and reserve ideas, it seems that coming up slightly short in one area may not be cause to throw in the towel. Trophy buildings, though, may be a whole different kettle of fish.
johnrealestate1 - helpful stuff. what have you found to be the manhattan average for average to above average (not trophy) buildings in the debt/income ratio, and is the income considered gross or net? you also mention areas that are more prone to be more "reserve friendly" so can you share thoughts on what you've found is the average by neighborhood?
manhattangood - As I speak to listing agents (whose job it is to know what their seller's Boards are looking for), I find a range of anywhere from 25% (stringent) to perhaps 33% (very, very lenient), with average to slightly above average buildings looking for 25-28%. In GENERAL, the newer, the larger, the fancier, the more established, the more expensive the building, the more stringent the qualifications, including reserves.
These are % of GROSS (pre-tax)income. But they also (almost always) include your other fixed recurring monthly expenses - typically other debts that will show up on your credit report - things like student loans, auto loans, and credit card payments. A lender will usually have two ratios to look at - your monthly housing expense / income, and your monthly total expense (housing + other) to income, whereas a Co-op Board typically uses the more stringent one.
As mentioned, much of my work has been with the first-timer, often a smaller building on the UES, where 6 - 12 months of reserves can often work. Even on the UES, I've found that most "mainstream" doorman buildings like 24 months of reserves. Even though it's more about the building than the neighborhood, I've found that buildings in the East 40's, 50's and 60's can be, on average, tougher than most in this regard. Maybe that's the better way to look at it - that, to me, that area tends to be a "reserve-unfriendly" zone, whereas in most of Manhattan, it really tends to be more a "building" issue.
The other thing to point out here is what's an asset and what isn't. Some applicants think they're "savers" because they have accumulated retirement funds, although they have almost no liquid assets. Some boards will look at that nice big 401(k), and your regular contributions to it, as part of your track record, and others won't.
I feel like in general, boards are tightening up, and we're seeing more rejections than we have in the past -- everybody's moving towards the 25% end of the scale.
Since boards are more nervous, here's another plea -- PLEASE make your numbers internally consistent. If you're claiming $100K in assets, don't document two bank accounts that add up to $95K or $105K. It's really not that hard to proofread these things.
why do boards consider retirement funds illiquid? they're held in stock, fixed income or cash instruments and just subject to a penalty (IRAs) if withdrawn but otherwise, just as liquid as a savings or money market account. 401Ks are liquid and a line of credit (if needed). i'm not saying to view retirement funds as the piggy bank in one's pre-retirement phase but why disregard them or consider them non-liquid assets? sounds like people are penalized for saving.
Another plea would be:
- check your credit report for mistakes
- pay down you credit cards (I am not talking about school loans)
- don't buy any big tic items prior to an apartment purchase
Regarding "would we get our deposit back" -- PLEASE hire a Real Estate attorney, not cozen or a friend of a friend, who specializes in criminal law, because it would be a crime for them to represent you on a real estate transaction.
-- exposure.
For most co-op buildings, a buyer needs to have a 25% debt-to-income ratio.
What this means is that a person earning $10,000 a month (or a pretty significant $120,000 a year) can take on carrying costs, including mortgage and maintenance payments as well as any ongoing fees like school loans or car payments, of only $2,500 a month. What is more, after 20% down payment and closing costs (though for co-op closing costs are much less then for real property), this person needs to have two years’ worth of $2,500 payments (or $60,000) available in liquid assets.
P.S.
we just submitted BP to a building on York Avenue where debt-to-income ratio - 28%, with required downpayment - 30%.
don't coops realize that by making that ratio more difficult to meet they're either expecting prices to come down (the debt part of the ratio) or the income to increase (which today is just not possible in ANY field)? why feed the growing concern of price decreases?
what can be bought in manhattan on a monthly of 2500?
i don't think the 60000 is outrageous by the way but lowering the ratio when incomes are going down doesn't do anything to lessen a coop's "exposure". boards want to protect themselves? they should look at the usual credit history, employment history, etc but with more emphasis on the liquid assets. liquid assets are supposed to be there for recessions, and not just used as another line on a statement of financial assets.
manhattangood - don't quite get your analysis that Boards are expecting prices to come down or incomes to rise. All they care about is the "here and now", that any prospective buyer can currently meet the guidelines that they've established and they're comfortable with.
When you ask "what can be bought for 2500 / mo", remember that the income ratio and reserves deal with the mortgage payment, not specifically the price of the apartment. Many people, for example, put down much more than the minimum down payment. In my space (first-timers, "starter" apartments), many of my buyer clients get substantial down payment assistance from parents, making their financial profile just fine with their (typically) 80K - 120K salaries. The vast, vast majority of Co-op's are OK with parental down payment assistance, as long as the adult child can "comfortably" manage all payments going forward. In fact, that is often the only way for someone to buy his / her / their first apartment.
bad economy usually means lowered income (who expects a huge raise / bonus in this economy?) and this would apply across the board and not just for bankers so let's not ostracize them based on their professional choice.
using the debt/income ratio, debt presumably increases with price, no?
so, lower income and holding debt (which is tied to the sales price) equal will cause the ratio to increase
if coop boards expect that the ratio, already more stringent than a bank's should be further lowered, what do we change to find balance in that ratio? you've got to either decrease that debt (lower the price) or increase that income (which just won't have in 2008)
using the monthly example of 2500, i understand that people can also lower the debt by putting more down so for an average 600000 one bedroom with that crazy ratio you're expecting a person making 120000 to paydown more than the usual 20-25% which'd be 120000 or 150000. to how much? assuming 5.75% 30 year fixed, that'd be a down of 350000 leaving a mortgage of 250000 so payments are 1458.93 for a maintenance of 1000 approximately. question is how many people would want to stash away that much of their cash in the apartment. we're talking a down of 58% which is sutton place levels.
lots of people have always had gripes with coops and looks like the resentment should continue because there is no lessened exposure with the ratio tightening. i don't question the brokers (got some good replies here) but they've and board members got to also realize that this pricing dynamic exists with the ratio lowering. condos will experience crap pricing because of the overbuilding but why are coops doing this? they're just asking for a world of hurt.
"The vast, vast majority of Co-op's are OK with parental down payment assistance, as long as the adult child can "comfortably" manage all payments going forward. In fact, that is often the only way for someone to buy his / her / their first apartment."
Pretty pathetic, in my opinion.
Also yet another sign that the market is overpriced, if the only way for someone to buy is to get their parents to help them.
alpine292 - always an option. Just be prepared for prices (regardless of the market) 20 - 30% above those of a Co-op. And MUCH higher closing costs.
manhattangood - I accept your point. Mine was just that Co-op Boards don't exist (in their mind) to facilitate sales in their building. If a buyer doesn't meet their qualification requirements, they don't much care. Don't construe this as my endorsing their viewpoints - just reporting on what I've seen.
As I mentioned, my experience with income ratios is that they vary from 25 - 33%, with more around 25-28, than 30-33. I'm not aware of any broad move to lower the income ratio, but I have recently seen some buildings raise their down payment requirements (10% => 20%, or 20% => 25%).
And I wouldn't begin to try to justify the price of Manhattan apartments. But I do know, that for many people, purchasing an apartment is viewed as a very viable alternative to renting. Smarter people than I on this discussion board have made cases for / against renting vs buying. I do know that rents in Manhattan are hideously expensive, and that apartments, on average, have probably doubled in value over the past decade. And the income tax breaks certainly appeal to many. Anecdotally, when I lived on the UES in the mid 1970's, my rent for a two bedroom "railroad" apartment was $154 (my share was $77). That apartment probably rents for $2000 (or more) today. Is Real Estate a good investment? I'll leave it to others to argue that point.
newbuyer99 - "pretty pathetic" - perhaps. But welcome to Manhattan. And whether to buy or to rent, people keep flocking here. Remember, too, as a buyer representative, I'm only too glad to see prices substantially off their 2005-2006 highs. And I hope they fall further. But even if they correct another 10% or so, it won't much change the reality that first-time buyers in Manhattan will often need $$$ help from their family.
johnrealestate is correct--Co-op boards are not in the business of facilitating sales--they simply don't care whether or not 'you' qualify financially. Someone else will. Or won't. In which case the original shareholder will have to retain the apartment until such time as a suitable buyer can be found.
My wife and I currently do not qualify the 25% ratio requirement set by the board. Since my wife works for her dad's bunisess the agent told us to get a letter from the business stating she would get a increase in her salary. With this letter and our current income it will meet the 25% ratio. Obtaining this letter would not be a problem, but my concern is will this raise a red flag with the board? If we get rejected by the board because of the letter or not meeting the income ratio requirment, would we get our deposit back.
gross or net?
This is 100% a question your attorney should and likely can easily answer for you.
It depends on the board, obviously, but of course such a letter is a red flag -- you're asking them to trust you.
That said, many boards would. The logically next step of due diligence for them would be to get your Dad's CPA to give them last year's financials of the business, so they can see it really exists, and to ask you to escrow some mortgage and maintenance payments "just in case."
Most boards, having taken those steps, will then pass you.
ali r.
{downtown broker}
Not one to look back, but curious why this is coming up now. It's not clear from your post, but when you ask "would we get our deposit back", I'm assuming you're now in contract, and have already submitted your deposit. Your (buyer's) agent - if you have one - and the listing agent would usually have reviewed your financial qualifications (assets & income) prior to accepting your offer, to see if the financials could actually work for you. Presumably, the listing agent would have had a good sense for what the Board wants to see in the way of an income ratio, and would have shared that info with you and your agent beforehand.
Ditto to what Ali R says - often income ratios are not absolutes, and are just part of the overall qualification picture, so there can be ways to compensate for that, DEPENDING ON THE INDIVIDUAL BOARD.
Double Ditto to kylewest - it's your attorney's job to protect you AND your deposit.
Those admissions committees and boards I have served on would not like some promise of future money coming from a family business. If the raise is coming, then why not just make it immediate? Family business would already concern me insofar as the financials are more easily manipulated than someone drawing a salary from a non-family job. I'd look very hard at the current and past financials of the applicant for consistency and well-established patterns of income. I would not be interested in applicants who "show promise" for future earnings. That isn't how it works.
kylewest - in your experience, what would you have considered as more heavily weighted, investments in stocks and cash instruments or a person's base salary? yes, both are important, but which shows greater stability?
Salary. Unless the investments were such that they were low-risk and income generating like a trust fund or government bond fund or the like. We didn't like the idea that someone would potentially have to liquidate something to pay their mortgage and maintenance if the bonus check didn't come that year. Ideally, we'd look for solid earning history as well as some savings/investments. That is what most buyers we saw had.
how does that make sense especially these days when a job is more out of one's control. investments are bankable, whereas a salary as many can attest, is not
It's all relative. I was saying all things being equal, I lean toward a strong employment history, but don't discount investments. It's a balance. Someone with a shaky job and $250,000 in Yahoo stock is not really any better than a trader with a salary of $60,000 and a bonus for each of the last 3 years of $200,000 with minimal money in a portfolio.
Many jobs are not subject to bear markets as much as others. Teacher, lawyers, doctors, all sorts of government positions, established businesses owned by the applicant... Not everyone is an IB or broker.
In the end, though (and perhaps I should have been clearer before) it is ALWAYS the total package. There may be deal-breakers revealed in the application package (recent bankruptcy filing; involvement in ridiculous number of lawsuits; atrocious credit score), but there is rarely a stand-out single thing that results in approval. Approvals come from a combination of long-term demonstrated consistentcy, responsibility, financial stability, generally being someone others want for a neighbor.
Kylewest - very helpful comments on board approval considerations. In your experience, how flexible are the "liquid assets" requirements? I am not talking about the standard 2 years of mortgage and maintenance payments, but the ones that require a lot more. I've encountered a few listings where the broker says something like "the board requires close to the purchase price in liquid assets after closing". So I am just wondering whether it's worth it to try to convince them that our income, good credit history, stable jobs, etc. more than overcome some shortfall of assets, or whether it's just a waste of everyone's time. Thanks.
being a board member who has reviewed many applications--my suggestion would be to:
-temporarily raise your paycheck three months prior to the appropriate amount to pass the board
-reduce the salary to a lower amount to equal same annual salary for the rest of the year after you pass the board
newbuyer99 - Re "liquid assets requirement" - it depends largely on where you choose to play. You're right - I know that many of the high-end, "prestige" buildings require liquid reserves in the amounts you describe. But many, probably most, of the typical doorman "luxury" buildings would be absolutely fine with 24 months of m + m after closing, all other financial parameters being up to speed, though some neighborhoods tend to be more "reserve friendly" than others.
Just for comparison, I'm a buyer broker who works almost exclusively with first-timers, so my niche is that studio or Junior-1, anywhere from the high 200K's to the mid 400K's. Every Board (naturally) is different, but most of these buildings would be fine with 12 months. And there are situations where six months could work, as well. As always, in situations where there is "multiple buyer" interest, it's a situation of "out-qualifying" your competition, as much as meeting the minimum threshold of the Board.
In this price range (at least), I'm always told by the listing agents that it's always the "big picture" of a buyer's qualifications, not any one "absolute" factor. Though each listing agent (and Board) has minimum income ratio and reserve ideas, it seems that coming up slightly short in one area may not be cause to throw in the towel. Trophy buildings, though, may be a whole different kettle of fish.
johnrealestate1 - helpful stuff. what have you found to be the manhattan average for average to above average (not trophy) buildings in the debt/income ratio, and is the income considered gross or net? you also mention areas that are more prone to be more "reserve friendly" so can you share thoughts on what you've found is the average by neighborhood?
manhattangood - As I speak to listing agents (whose job it is to know what their seller's Boards are looking for), I find a range of anywhere from 25% (stringent) to perhaps 33% (very, very lenient), with average to slightly above average buildings looking for 25-28%. In GENERAL, the newer, the larger, the fancier, the more established, the more expensive the building, the more stringent the qualifications, including reserves.
These are % of GROSS (pre-tax)income. But they also (almost always) include your other fixed recurring monthly expenses - typically other debts that will show up on your credit report - things like student loans, auto loans, and credit card payments. A lender will usually have two ratios to look at - your monthly housing expense / income, and your monthly total expense (housing + other) to income, whereas a Co-op Board typically uses the more stringent one.
As mentioned, much of my work has been with the first-timer, often a smaller building on the UES, where 6 - 12 months of reserves can often work. Even on the UES, I've found that most "mainstream" doorman buildings like 24 months of reserves. Even though it's more about the building than the neighborhood, I've found that buildings in the East 40's, 50's and 60's can be, on average, tougher than most in this regard. Maybe that's the better way to look at it - that, to me, that area tends to be a "reserve-unfriendly" zone, whereas in most of Manhattan, it really tends to be more a "building" issue.
The other thing to point out here is what's an asset and what isn't. Some applicants think they're "savers" because they have accumulated retirement funds, although they have almost no liquid assets. Some boards will look at that nice big 401(k), and your regular contributions to it, as part of your track record, and others won't.
I feel like in general, boards are tightening up, and we're seeing more rejections than we have in the past -- everybody's moving towards the 25% end of the scale.
Since boards are more nervous, here's another plea -- PLEASE make your numbers internally consistent. If you're claiming $100K in assets, don't document two bank accounts that add up to $95K or $105K. It's really not that hard to proofread these things.
ali r.
{downtown broker}
insightful, intelligent posts - thanks
why do boards consider retirement funds illiquid? they're held in stock, fixed income or cash instruments and just subject to a penalty (IRAs) if withdrawn but otherwise, just as liquid as a savings or money market account. 401Ks are liquid and a line of credit (if needed). i'm not saying to view retirement funds as the piggy bank in one's pre-retirement phase but why disregard them or consider them non-liquid assets? sounds like people are penalized for saving.
what's the point on the move to 25% gross income?
Another plea would be:
- check your credit report for mistakes
- pay down you credit cards (I am not talking about school loans)
- don't buy any big tic items prior to an apartment purchase
Regarding "would we get our deposit back" -- PLEASE hire a Real Estate attorney, not cozen or a friend of a friend, who specializes in criminal law, because it would be a crime for them to represent you on a real estate transaction.
elena
(broker)
what's the point on the move to 25% gross income?
-- exposure.
For most co-op buildings, a buyer needs to have a 25% debt-to-income ratio.
What this means is that a person earning $10,000 a month (or a pretty significant $120,000 a year) can take on carrying costs, including mortgage and maintenance payments as well as any ongoing fees like school loans or car payments, of only $2,500 a month. What is more, after 20% down payment and closing costs (though for co-op closing costs are much less then for real property), this person needs to have two years’ worth of $2,500 payments (or $60,000) available in liquid assets.
P.S.
we just submitted BP to a building on York Avenue where debt-to-income ratio - 28%, with required downpayment - 30%.
elena
(broker)
don't coops realize that by making that ratio more difficult to meet they're either expecting prices to come down (the debt part of the ratio) or the income to increase (which today is just not possible in ANY field)? why feed the growing concern of price decreases?
what can be bought in manhattan on a monthly of 2500?
i don't think the 60000 is outrageous by the way but lowering the ratio when incomes are going down doesn't do anything to lessen a coop's "exposure". boards want to protect themselves? they should look at the usual credit history, employment history, etc but with more emphasis on the liquid assets. liquid assets are supposed to be there for recessions, and not just used as another line on a statement of financial assets.
manhattangood - don't quite get your analysis that Boards are expecting prices to come down or incomes to rise. All they care about is the "here and now", that any prospective buyer can currently meet the guidelines that they've established and they're comfortable with.
When you ask "what can be bought for 2500 / mo", remember that the income ratio and reserves deal with the mortgage payment, not specifically the price of the apartment. Many people, for example, put down much more than the minimum down payment. In my space (first-timers, "starter" apartments), many of my buyer clients get substantial down payment assistance from parents, making their financial profile just fine with their (typically) 80K - 120K salaries. The vast, vast majority of Co-op's are OK with parental down payment assistance, as long as the adult child can "comfortably" manage all payments going forward. In fact, that is often the only way for someone to buy his / her / their first apartment.
Screw co-op boards. Buy a condo!
bad economy usually means lowered income (who expects a huge raise / bonus in this economy?) and this would apply across the board and not just for bankers so let's not ostracize them based on their professional choice.
using the debt/income ratio, debt presumably increases with price, no?
so, lower income and holding debt (which is tied to the sales price) equal will cause the ratio to increase
if coop boards expect that the ratio, already more stringent than a bank's should be further lowered, what do we change to find balance in that ratio? you've got to either decrease that debt (lower the price) or increase that income (which just won't have in 2008)
using the monthly example of 2500, i understand that people can also lower the debt by putting more down so for an average 600000 one bedroom with that crazy ratio you're expecting a person making 120000 to paydown more than the usual 20-25% which'd be 120000 or 150000. to how much? assuming 5.75% 30 year fixed, that'd be a down of 350000 leaving a mortgage of 250000 so payments are 1458.93 for a maintenance of 1000 approximately. question is how many people would want to stash away that much of their cash in the apartment. we're talking a down of 58% which is sutton place levels.
lots of people have always had gripes with coops and looks like the resentment should continue because there is no lessened exposure with the ratio tightening. i don't question the brokers (got some good replies here) but they've and board members got to also realize that this pricing dynamic exists with the ratio lowering. condos will experience crap pricing because of the overbuilding but why are coops doing this? they're just asking for a world of hurt.
"The vast, vast majority of Co-op's are OK with parental down payment assistance, as long as the adult child can "comfortably" manage all payments going forward. In fact, that is often the only way for someone to buy his / her / their first apartment."
Pretty pathetic, in my opinion.
Also yet another sign that the market is overpriced, if the only way for someone to buy is to get their parents to help them.
alpine292 - always an option. Just be prepared for prices (regardless of the market) 20 - 30% above those of a Co-op. And MUCH higher closing costs.
manhattangood - I accept your point. Mine was just that Co-op Boards don't exist (in their mind) to facilitate sales in their building. If a buyer doesn't meet their qualification requirements, they don't much care. Don't construe this as my endorsing their viewpoints - just reporting on what I've seen.
As I mentioned, my experience with income ratios is that they vary from 25 - 33%, with more around 25-28, than 30-33. I'm not aware of any broad move to lower the income ratio, but I have recently seen some buildings raise their down payment requirements (10% => 20%, or 20% => 25%).
And I wouldn't begin to try to justify the price of Manhattan apartments. But I do know, that for many people, purchasing an apartment is viewed as a very viable alternative to renting. Smarter people than I on this discussion board have made cases for / against renting vs buying. I do know that rents in Manhattan are hideously expensive, and that apartments, on average, have probably doubled in value over the past decade. And the income tax breaks certainly appeal to many. Anecdotally, when I lived on the UES in the mid 1970's, my rent for a two bedroom "railroad" apartment was $154 (my share was $77). That apartment probably rents for $2000 (or more) today. Is Real Estate a good investment? I'll leave it to others to argue that point.
newbuyer99 - "pretty pathetic" - perhaps. But welcome to Manhattan. And whether to buy or to rent, people keep flocking here. Remember, too, as a buyer representative, I'm only too glad to see prices substantially off their 2005-2006 highs. And I hope they fall further. But even if they correct another 10% or so, it won't much change the reality that first-time buyers in Manhattan will often need $$$ help from their family.
johnrealestate is correct--Co-op boards are not in the business of facilitating sales--they simply don't care whether or not 'you' qualify financially. Someone else will. Or won't. In which case the original shareholder will have to retain the apartment until such time as a suitable buyer can be found.
No skin off the board's nose either way.
coop boards are supposed to preserve share value