In New York City, an offer creates no legal obligation for either the buyer or the seller. Therefore, if you submit an offer and it is accepted, you are free to change your mind until you sign the contract of sale.

When buying a co-op, you’re actually buying shares in a corporation that owns the building.  Regardless of the owner’s decision to accept an offer, prospective buyers ultimately need the approval of the co-op board in order to close on the property. Sellers consider the offer price but also must look for a qualified buyer who can make it past board approval to the closing table.

As a result, there are 3 documents required when submitting offer on a co-op –

Pre-Approval Letter – You can bolster your offer by including a preapproval letter from your lender stating you’re in good financial standing and can afford the sale price and down payment. Sellers will find any offer you make more attractive if you are pre-approved for a mortgage. A preapproval letter is much more serious than a prequalification letter. It shows you are ready and qualified to buy a home at a certain price point. It’s what you want in your hands if you are home shopping and need to move quickly.

REBNY Financial Statement – The REBNY Financial Statement provides sellers and listing agents with an overview of your financials as a buyer. Completing a REBNY Financial Statement is almost always required when submitting an offer on a co-op apartment, as sellers and listing agents need to ascertain whether or not you satisfy the coop’s financial requirements for applicants.

Purchase Cost Analysis – Although some co-ops are stricter than others, most co-op boards want only to see a maximum of 25%-30% of your income going towards your housing costs (mortgage plus maintenance). Co-ops also have “post-closing liquidity” requirements – you must have a certain amount of liquid assets left over after your down payment. A common co-op post-closing liquidity requirement is an amount equivalent to 2 years of housing costs (mortgage and maintenance).

Additional Information Included With Offer –

Real Estate Attorney – When submitting an offer, the name and contact information of the buyer’s real estate attorney should always be included. The next step after an offer is accepted is for the contract of sale to pass from the seller’s attorney to the buyer’s attorney for review.

Contingencies – Present any contingencies. For example, if your ability to purchase the co-op is contingent on selling another property, this should be presented in the offer. Most commonly, offers include a mortgage contingency, meaning the offer is contingent upon the buyer gaining the loan underwriter’s final approval.

Proof of Funds – Used in place of pre-approval letters for all-cash deals. A financial statement or document that proves that a home buyer has enough liquid cash to purchase a home. It’s essential paperwork that all home sellers will want to see, so home buyers shouldn’t feel prepared to make an offer without one.

Cover Letter – Many experts recommend writing a personal offer letter to the seller. You’ve got to be able to make a competitive offer but when it’s an even playing field, a cover letter may nudge you in the lead. When the seller has an emotional investment in the home, a well-written, heartfelt letter might be enough to win a bidding war.