Featuring real estate articles and information to help real estate buyers and sellers. The Nest features writings from Georges Benoliel and other real estate professionals. Georges is the Co-Founder of NestApple and has been working as an active real estate investor for over a decade.
Does the listing agent ask you to submit a REBNY form Financial Statement in NYC with your offer to buy an apartment? A REBNY form was only provided for co-ops in NYC real estate market. However, this financial disclosure form became a document accompanying all offers for properties listed in the Real Estate Board of New York’s RLS. Here is a REBNY financial statement spreadsheet. It allows you to quickly complete your REBNY Financial Statement and use it in every offer we place. We are not surprised.
Buyers submitted this Statement for co-ops in NYC. However, this financial disclosure form has become a de facto document accompanying all offers for properties listed in the Real Estate Board of New York’s Residential Listing Service (commonly referred to as the RLS in NYC).
This blog post will answer those questions and provide readers with REBNY financial statement instructions and pro tips.
The REBNY Statement is almost always required when submitting an offer on a co-op apartment in NYC. This Statement is a high-level summary of your assets, liabilities, income, and projected expenses.
This allows the listing agent and seller to ascertain whether you meet the co-op’s financial requirements. These financial requirements usually consist of the debt-to-income ratio and post-closing liquidity.
Click here to download our 2018 template.
Technically, New York State law does not require a REBNY residential form financial statement with an offer. However, it has become the standard. All offers submitted to a listing agent (with or without a form) are required to get forwarded to the seller.
Then, if you want the seller to take your offer seriously, the answer is yes. You should include a REBNY statement.
Co-op board rejections frequently happen in NYC, and the last thing you want is the denial to result from the buyer not passing all of the board’s financial requirements. Therefore, as a buyer, you should complete the REBNY form financial Statement even if you feel it’s somewhat invasive.
Generally, you will not request the buyer to include a REBNY Statement, co-op sponsor units, condos, or new construction. For these situations, a pre-approval letter, proof of funds, and your offer level (price, % down, and contingencies) will suffice.
Sellers use the form and listing brokerage firms to evaluate the relative strength of offers. They determine who remains the most financially qualified and likely to pass the co-op board. An economically stable candidate is good because it can help make you stand out, especially in a bidding war.
Most New York City apartment inventory is co-op apartments. Therefore, it is incredibly likely that the buyer’s broker will ask for this Statement.
The REBNY form combines a personal balance sheet and an income statement for those familiar with accounting.
Working with an experienced buyer’s agent will help ensure that you are fully informed about each co-op’s nuances and requirements. I don’t want to invest too much time in something which may not be the right fit.
Under the assets section, you will need to fill the itemized schedule and list all liquid and non-liquid assets for yourself and any co-applicant (spouse, significant other, etc.). When a listing agent reviews the assets section of the REBNY financial statement, they will be looking to see if you have enough liquid assets to cover the following items:
Most co-ops have specific guidelines for the amount of post-closing liquidity a new shareholder (purchaser) should have after closing the apartment. If you buy all-cash, ‘post-closing liquidity’ means the amount of liquid assets you have available to cover the monthly co-op maintenance.
If you are financing the unit, ‘post-closing liquidity‘ means the amount of liquid assets you have to cover the monthly mortgage and maintenance bills. Co-ops often look for anything between one to three years of post-closing liquidity.
In some cases, the amount the board is looking for is also related to how substantial your debt to income ratio is.
We recommend completing this form ahead of time if you plan to buy in New York. Also, secure a mortgage pre-approval. When you find the apartment you love, you aren’t scrambling to get your documents ready to offer to your agent. No matter what agent you choose, or if you decide to go alone, the listing agent will likely still ask you to fill out this form.
Many times people express they are uncomfortable disclosing personal and financial information. Unfortunately, if you don’t include it, you may put yourself at a significant disadvantage. In the case of co-ops, the board application process is excruciating and intrusive. These items will eventually come up.
It is good to disclose your financial information clearly and honestly upfront. If you can’t afford a co-op (or condo), it is best to know early on to move on to the next place. Generally, the more transparent and clear your offer is, the more likely it will stand out from other buyers.
Suppose you are planning to buy in NYC. In that case, we recommend that you complete this form ahead of time and secure a pre-approval. This way, when you find the apartment you love, you aren’t scrambling to prepare documents to make an offer with your agent.
No matter what agent you choose, or if you decide to go alone, you will still need to fill out this form. It is a great way to show that you meet the financial requirements of a building.
When submitting bids, a REBNY financial statement spreadsheet doesn’t require backup, and it simply gives the seller and listing agent a ballpark sense of your finances. If the seller is unsure the board approves you, they may come back and ask for additional detail and documentation. For example, the board requires a debt to income ratio under 25%, and you are at 26%.
If a substantial portion of your income is from an annual bonus, the listing agent may ask for your bonus for the last three years to ensure it hasn’t fluctuated too much. Whatever the request, your agent can tell you if it is reasonable and relevant to the proposed transaction.