REBNY Financial Statement 101: Everything You Need to Know
A REBNY financial statement is a document commonly required when bidding on an apartment in New York City. It provides a comprehensive overview of your financial situation, including assets, liabilities, income, and projected monthly expenses. This information helps sellers and co-op boards assess your financial stability and determine if you meet their specific requirements.
What Is a REBNY Financial Statement?
The REBNY financial statement is essentially a detailed snapshot of your financial health. The top portion functions as a balance sheet, where you list your assets—such as cash, investments, real estate, and retirement accounts—and your liabilities, including mortgages, student loans, and other debts. Following this, you’ll detail your income sources, like salary and bonuses, and provide information on any contingent liabilities. A crucial section is the “Projected Monthly Expenses,” where you outline anticipated monthly payments associated with the apartment you’re interested in purchasing.
If you need a copy of the REBNY financial statement template, Pinpointe has one for your convenience. You can copy it and use it when preparing your offer.
Why Is a REBNY Financial Statement Required?
In New York City, co-operative apartments (co-ops) constitute approximately 75% of the apartment market. Co-op boards often have financial criteria that are more stringent than those of lenders. The REBNY financial statement differs from a a mortgage pre-approval, which indicates your borrowing capacity. The financial statement allows sellers and co-op boards to evaluate whether you meet their specific financial standards. Even when purchasing a condominium or a house, where board approvals are not a factor, listing agents frequently request this statement to gain a clear understanding of a buyer’s financial standing.
Key Components of the REBNY Financial Statement
Co-op boards typically focus on two primary metrics:
- Debt-to-Income Ratio (DTI): This ratio is calculated by dividing your total monthly debt—including mortgage payments, maintenance fees, common charges, and property taxes—by your gross monthly income.
- Post-Closing Liquidity: This measures the number of months you can cover your housing expenses using liquid assets after the purchase. Liquid assets include cash and investments that can be quickly converted to cash. Assets like real estate and retirement accounts are generally considered less liquid due to the time and potential penalties involved in accessing their value.
Optional Sections and Documentation
While the standard REBNY financial statement is typically sufficient when submitting an offer, there is a more detailed version available. However, this comprehensive version is usually not necessary at the initial bidding stage. It’s important to note that when you submit the financial statement during the offer process, supporting documentation is generally not required. The statement serves to provide a general overview of your financial situation. If the seller or listing agent has concerns about specific aspects of your finances, they may request additional details or documentation to ensure you meet the co-op board’s criteria.
Understanding and accurately completing the financial statement is a critical step in the New York City apartment purchasing process. It not only facilitates a smoother transaction but also enhances your credibility as a buyer in a competitive market.
If you have any questions about this financial statement, reach out to your Pinpointe agent today.
