April is the season for letters from elite gatekeepers, when words like wait-list start peppering teen vocabularies – and this year, parents are going through the same sort of painful wait for approval. Economic fears are driving co-op boards to new levels of pickiness, making it harder to get into the Dakota than into Dartmouth. “A board is a little leery that somebody’s working for a company that might not be around next week,” says real-estate lawyer Marc Luxemburg of Snow Becker Krauss P.C. “If someone who’s received a big bonus wants to rush out and buy the most expensive co-op they can, the board is going to say, ‘I want to see a track record.’ “
Co-ops were already tightening up during the boom, worried that new money was risky. “They learned their lesson in the late eighties,” says Carol Ott, editor-in-chief of Habitat magazine. “Boards allowed a lot of financing, and they ran into problems. Shareholders lost their apartments.” In this bad economy, though, they aren’t bending the rules to boost sales – they’re clamping down “to be careful that prospective shareholders don’t overextend themselves,” says Mary Ann Rothman, executive director of the Council of New York Cooperatives and Condominiums. “People lose jobs.”
Or is that just an excuse to say no? “There’s no legitimate reason to turn someone down who’s already been approved for a $600,000 loan,” says Halstead broker Robin Horowitz, who sells downtown with her sister Nancy, about a recent non-sale. “It has to be something personal. This particular building wanted a family, and this was an unmarried couple.”
“They call it a financial thing,” agrees Corcoran’s Tami Shaoul. “It has to be, otherwise it’s discrimination. They look for the Goldman Sachs type – we have to bring in someone who fits that mold. It used to be an Upper East Side thing, but it’s all over the city.” And the private investor and his family who were bounced – without a word – from a $3 million Park Avenue co-op last winter? “Their liquid assets were five or six times the value of what they were purchasing,” says their frustrated broker, Corcoran’s Marie Schmon. “They’ve even got great reference letters.”
Still, all but the iciest buildings know when to say yes. “When boards are really ruthless, turning down everyone or making people wait forever, brokers don’t want to deal with them,” says Charles H. Greenthal’s Margo Goodale, adding that a shopper can always just buy a condo. “They’re devaluing the apartments. You want brokers to like your building.”