A Step-By-Step Timeline for Purchasing a NYC Condo or Coop
Once you have found a reputable buyer’s agent, real estate attorney and figured out the financing, you’ve taken the first steps on a long, complicated and rewarding journey. Here’s what you can expect on your quest for homeownership:
1. Mortgage Pre-approval
(Estimated timeframe: 3-7 days)
You can’t start shopping until you know what you can afford. Keep in mind that your final mortgage approval is contingent on having the requisite down payment. Condo apartments typically require 10 percent down, while co-op apartments require at least 20 percent or more. In Manhattan, approximately 20 percent of the buildings are condominiums, and the other 80 percent are cooperatives. Although Condominiums allow for 90% financing since the financial crisis, most lenders require that the buyer put down 20%.
2. Finding a Property
(Estimated timeframe: 1-6 months)
The average buyer sees between 15 and 20 properties before making an offer on one. Your search length will depend on how many requirements you have for your next home.
Image by Cristinel Anghelus / Flickr
3. Negotiation
(Estimated timeframe: 24 hours to 2 weeks)
Everything is negotiable in a sales contract, from price, assessments, appliances to floors and fixtures. Expect a lot of back-and-forths during this phase. Negotiating the Sales price requires finesse and a strong argument best supported with a CMA (comparable market analysis).
4. Contract Signing
(Estimated timeframe: 1-2 weeks)
The seller’s attorney draws up the contract of sale, and the buyer’s attorney does due diligence, reviewing minutes, financial statements of the building, etc. Once approved, the buyer signs the contract and forwards it to the seller’s attorney with a 10 percent deposit. At this point, the seller executes the contract, and it becomes binding on both parties. Possible contingencies include financing, approval by any co-op or condo board, closing dates.
5. Mortgage Application
(Estimated Timeframe: 45-60 days)
Mortgage applications cannot be processed before the contract is executed. Once the application is complete, your lender will release a commitment letter. This letter is required to complete your board package/condo application if you are financing an apartment.
6. Condominium and Cooperative Application or Board Package
(Estimated Timeframe: 2-3 weeks)
Once your purchase contract is executed, your condo board will give you an application to complete. This application must be completed and approved before closing takes place. If there is no mortgage involved, it takes about 2-3 weeks to gather all the information needed for the application.
Co-ops, however, demand an exhaustive list of documents and information. Most co-ops require the following in a board package: Complete financial disclosure with supporting documentation, detailed employment history, current salary, personal and business references, two years of tax returns, and a comprehensive credit history.
7. Submit Condo Application and Board Package for Review
(Estimated Timeframe: 1-4 weeks)
Once EA completes your board package, we forward it to the building’s management agent, who reviews it for completeness. Then it’s forwarded to the condo’s board of directors, and they decide if they will meet the potential buyer.
8. Co-Op Board Interview and Decision
(Estimated Timeframe: 30-60 minutes)
Most co-op boards meet just once a month, and many do not meet in August. Frequently, meetings are in the evening on a weeknight. Keep in mind that an interview does not guarantee approval. The board will reach a decision up to a few days after the meeting.
9. Closing
(Estimated Timeframe: 1-2 weeks after approval by the board)
Once the board has approved you, the attorneys will schedule a closing as quickly as possible.
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