Buying a new home is thrilling. New place, new furniture, new you! Not so fast. You are about to step into a lengthy legal process... And that's okay, good things take time.
Below is a basic timeline for what you should expect when purchasing a piece of real estate, so read on, and we'll help you figure out when to schedule that U-haul.
Although every building and real estate property is different, you must know how much you can spend before you spend it. Different types of real estate have different requirements. Condominium apartments usually require at least 10% down;co-op apartments generally require at least 25% down. 15% of Manhattan’s buildings are condominium buildings and the other 85% are cooperatives.
Depending on what type of real estate you are looking for, the length of your search will vary. The average person sees 10-15 apartments or real estate properties before deciding on one. Internet-savvy buyers save time by doing their ‘homework’ before their real estate search. The average number of real estate properties or apartments viewed before buying by our internet buyers is 4-5.
Due Diligence Before Purchase:Typical time frame: 3 days to 2 weeks
Inquire about assessments, fixtures, window replacements, air conditioners, rugs, floors, curtains, appliances, working fireplaces, washer dryers, etc. Apartments should be delivered ‘swept clean.’
Generally, in a real estate sales transaction, a New York City real estate attorney represents each buyer and seller. The seller’s attorney draws up the contract for the buyer’s attorney; the buyer’s attorney does ‘due diligence’-reading minutes, financial statements of buildings etc. The buyers sign the contract and forward the contract with a 10% deposit; the sellers execute the contract. Possible contingencies: Financing, Board Approval, closing dates.The quicker the contract can be signed, the better. A contract is binding only after both parties sign it.
Mortgage applications cannot be processed without an executed contract. If an apartment or real estate property is being financed, the board requires a commitment letter from a lender. These letters are generally the last items to complete a board package/condo application.
Co-op buildings require board approval before a closing can take place. Condominiums require an information packet to be completed before a closing can take place. In order to review a potential purchaser, the Board of Directors for a Coo-p demand extensive information in a Board Package. Most Boards request the following information: full financial disclosure (net worth) with supporting documentation, employment history, current salary, personal and business references, tax returns for the previous 3 years, credit history, etc. If a purchaser cannot or does not want to supply this information, he/she should buy a condominium. Board packages/Condo applications are given to potential purchasers to fill out after a contract has been executed. If there is no financing, it usually takes about 2-4 weeks to gather the information for the board condominium application.
After the buyer completes the Board package, their buyer’s real estate agent will forward the package to the managing agent of the building. The managing agent will inspect the package to ensure it is complete. The package will then be forwarded to the Board of Directors of the Co-op. After the Board reviews the package, they will decide if they would like to meet the potential purchaser.
Coop Boards typically meet once a month, and some Boards do not meet in August. Every Board is different, but generally a Board Meeting will be held in the evening on a weeknight. Although a board interview may be granted,board approval.
The managing agent will generally alert the seller’s broker whether a potential purchaser has passed the board.
Managing agents generally set the date for closings, and lawyers for sellers and buyers coordinate with the appropriate banks on available dates and times.
***Typical Time Frame from the time a real estate property is found, to the time the real estate property closes: 3-5 months.
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