Timeline for Purchasing in NYC
As an experienced NYC real estate broker, I have worked with many first time buyers over the years. This is a basic outline of the process from beginning to end.
The first thing I recommend is meeting with a real estate broker like myself for a consultation. Most brokers skip this step, which a huge mistake. I think its such an important part of the process. I will discuss a more personalized version of this timeline, the current market, your financials, the approval process, all of the costs involved, and tailor a specific game plan to achieve your goals. I will help you set things in motion and guide through the process. Plus, you don’t PAY your broker, so this step is a no brainer in my opinion. It always saddens me a little to witness a broker meeting their buyer for the very first time at one of my listings!
Next step is speaking with a mortgage consultant, assuming you are financing that is. This is a very important step in the process because you will need to know how much a bank is willing to lend you, the different products and rates available to you, what to expect in regards to closing costs, and SO much more. You will also need a mortgage pre-approval letter once you are ready to submit an offer on a specific apartment. Getting pre-approved is a free service provided by a mortgage consultant and you will not be need to commit to working with whoever pre-approves you. I highly recommend doing this prior to seeing any apartments.
REAL ESTATE ATTORNEY
It’s also a good idea to contact a few real estate attorneys as soon as you are ready to start seeing apartments. You also don’t need to commit to one right off the bat, but you will need a good attorney by the time you present an offer to purchase. Way too many people wait until the last minute to hire an attorney and I think it’s much better to do so BEFORE you find an apartment, so you aren’t scrambling at the last minute. I have great referrals for both mortgage consultants and real estate attorneys for my clients.
Next up is the search for an apartment! This can take days, weeks, or months. I personally like to help my clients streamline the process, narrow down their choices, point things out about listings that they may not know, and set appointments for them that fit their schedule.
I personally like to attend showings with my clients and get feedback from them while inside the apartment, so we can bounce things off of each other and put things into perspective. By asking questions and pointing things out from my own experience as a broker, I can usually add a tremendous amount of value to their decision making process. If we are looking at co-ops, I also make sure that we are only seeing buildings that will likely approve you, based on your specific situation and financial picture.
Once we find an apartment, we move on to negotiation. Hopefully you are working with a great broker like me who is an expert negotiator. I will run a comparable market analysis and use that in conjunction with my knowledge of the market and experience as a broker to help devise a negotiating strategy. I will help you put together an offer and submit it to the listing agent, along with your mortgage pre-approval letter, a financial statement, proof of funds if you’re paying cash, and anything else that may be required, such as a personal bio. I will negotiate with the other side, until we come to an agreement and have an accepted offer.
ACCEPTED OFFER & SIGNED CONTRACT
Once there is an accepted offer, the brokers will create a deal sheet which gets sent to both attorneys. The sellers attorney will send a contract of sale to your attorney, so they can do their due diligence. They will negotiate the terms of the contract on your behalf, review the building financials, read the meeting minutes from the board, and make sure that the building is a good investment for you prior to you signing. When you sign the contract, you will be required to put down a 10% contract deposit. When the sellers attorney receives the signed contract and deposit, they will have the seller counter sign. Once that fully executed contract is returned to your attorney, we now have a deal.
MORTGAGE & BOARD APPLICATIONS
Now that the contract is signed, you will apply for your mortgage, assuming you are financing. If it’s a condo or co-op, your broker will help you put together a board package. Condos have board applications, but they are usually easier than co-op applications. Co-op applications require that you submit your entire financial picture including a financial statement, account statements, tax returns, and more. Both will usually ask for business and personal reference letters as well. This is a very important part of the process and its very important to have a good broker assisting you in putting together a solid board package.
APPROVAL & BOARD INTERVIEW
Once the package has been submitted we wait for approval, which can take a few days or a few weeks. A condo will approve your application and issue a right of first refusal waiver. A co-op will hopefully approve your application and schedule a board interview with you. How the board interview is conducted varies from co-op to co-op and I recommend taking it very seriously, like it’s a job interview. You will typically get a sense of how well it went by the time you leave and will usually hear the official answer shortly after.
CLOSING DATE & WALK-THROUGH
Once you have board approval, the attorneys will schedule the closing on behalf of the buyer and seller. Prior to the closing, there will be a walk through where you walk through the apartment or house and make sure that everything is being delivered in working order and in the condition agreed upon in the contract.
That brings us to the final step which is the closing. You will be sitting with your attorney and signing a good number of documents and handing over checks. You will then get the keys and thats it. Congratulations! You now are the proud owner of a New York City co-op, condo, or townhouse!
If you are looking to purchase in NYC and would like a free personalized consultation, feel free to reach out.