If you’re in the market to buy a home in New York City, you’ve likely been bombarded by all sorts of paperwork in recent days, weeks, or even months. One of the forms you might’ve been asked to fill out is the REBNY financial statement. Maybe you’ve taken a look at it, or maybe you haven’t gotten that far yet, but we know it can be a bit of a daunting form to look at.
Purchasing real estate can be stressful and cumbersome as it is, but in NYC — one of the liveliest real estate markets in the world — it’s all exacerbated. Luckily, we’re here to help, so we’ve compiled everything you need to know about the REBNY financial statement into this comprehensive guide.
What is a REBNY Financial Statement?
The REBNY financial statement is a real estate form created by the Real Estate Board of New York (REBNY). The form is used to evaluate real estate buyers’ financials in NYC. In many respects, the REBNY financial statement is a sort of balance sheet of a buyer’s assets and liabilities. The form is used by sellers and listing agents to get a better idea of buyers’ net worth and gauge their financial strength.
When You Need to Fill Out a REBNY Financial Statement
If you were under the impression that you were required to fill out the financial statement for legal reasons, fear not! Under current New York City state law, you don’t ever actually have to fill the REBNY financial form out. But don’t just stop reading here because you don’t have to fill the form out! The truth of the matter is that you really do want to fill one out to be sent along with your offers.
While it’s not a legal requirement to fill the REBNY financial statement out, it has become the norm in the NYC real estate market. That said, if you don’t submit the form and send it along with your purchase offer, there’s a very small chance that the seller is going to take it seriously. They’ll likely have other offers on the table that already have everything sent in, including the REBNY financial form, and might just disregard yours entirely.
What Can You Expect to See in the Form?
As you learned above, the REBNY financial statement is more or less a way for the seller of a property to determine your financial ability to pay for the property that you’re trying to buy. It’s a way for them to see your current financial situation (including your balances as well as your income) to make sure you’ll be capable of paying for it.
If you’re looking at buying a cooperative unit, they will use the REBNY financial statement to determine how much debt you have compared to your income, which is one of the most common ways of evaluating financial efficacy. While this all sounds like it’s pretty personal, that’s because it is. But when you’re looking at buying a property worth hundreds of thousands — if not millions — of dollars, the sellers need to make sure you can afford it.
So what’s really involved when it comes to completing a REBNY financial statement, and what information do you need to provide? Let’s take a look at the most common things you must disclose on the form:
- Your Assets — These are the things that you own that have a positive value and effect on your net worth. Assets include everything from cash, bonds, CDs, stocks, mutual and index funds, other securities, properties (with positive equity), and more.
- Your Liabilities — These are the things that you owe money on. You can also think of your liabilities as the debts that you have. The most common forms of liabilities include car loans, mortgages, personal loans, credit card balances, student loans, and more.
- Your Income — This one is pretty self-explanatory, but you want to be sure you include all of your income. Don’t just think of your salary at your day job and put that number down. Include any and all types of income so that your debt to income ratio is better. This can include anything from your salary and freelance income to dividends and interest earned in your bank or on your investments. Make sure you include it all!
Can You Refuse to Fill the Financial Statement Out?
Of course you can! If you don’t want to disclose this information to a potential seller, especially not this early on in the process, you don’t have to. Recall from above that it is not a legal requirement to fill the form out. But it can be much more difficult to actually find a place if you choose not to fill the form out.
In many cases, especially if you’re looking into purchasing a cooperative unit, the information is going to come out anyway. So if it’s just a matter of time before you need to disclose it, you might as well just fill the form out early on and use it to your advantage!