Step By Step Guide on How to Buy an Apartment in Manhattan
Buying real estate in Manhattan can be very convoluted, confusing and very stressful for many buyers.
Here are some similar, general guidelines that will be applicable to both buying Manhattan condos versus a coop. Some of you may ask, what is a co-op? The main difference between a condo and a co-op is the ownership rights conveyed to you.
1. The first step is to get a pre-approval letter from a qualified lender who specializes in Manhattan mortgages. A specialist is the key word here. Read: Purchasing Strategies for Apartments in New York, Manhattan for 2012
2. When you have identified a Manhattan property and wish to place an offer– the offer and counter offer is placed directly from agent to agent, and the process is very informal and is typically done through email. Once there is a meeting of the minds for price, terms and closing date, then it goes to the real estate attorney.
3. The seller’s attorney begins the preparation of contract of sale. At that time, the buyer’s attorney will begin his/her due diligence by examining the financial health of the building as well as other aspects of the offering plan and amendments. A real estate attorney is required for all property closings in NYC. Your Manhattan real estate broker has a list of vetted professionals.
4. Once everything has satisfactorily passed the attorney’s due diligence for all aspects, then it is time for you to sign the contract and give the specified deposit. If you are buying into a co-op, it can range from the customary 10%-50% and higher down that the co-op board will require. This down will be held by the seller’s attorney’s escrow account until closing. Take note that until the contract of sale is fully executed, the seller can continue to show and entertain other offers.
5. Contact your lender as soon as you have a signed contract and start working towards getting a loan commitment letter.
6. You will receive the board application and list of financial requirements from your real estate broker. For a condo and a co-op the application materials will be similar but the actual process will be very different. Read: What a Typical Manhattan Co-op Apartments Ask For
7. You will then fill out all the application requirements and furnish your Manhattan real estate broker with all the originals stipulated in the packet.
8. When the board application is completed, it will be forwarded to the building Managing Agent. For a co-op: when the application is initially accepted, you will then be invited to to be interviewed by the board. Read: 10 Tips to Pass an Interview in NYC Co-op Apartments For condos: There is no formal interview, and your application is just reviewed for the requirements and approval is typically granted.
9. After official board approval, you can call your lender to find out when they can fund and close. Condo closings are much faster (about 60 days), assuming you can secure a loan in a timely fashion because you do not have to wait for a monthly board meeting to be on the docket before your co-op application will be reviewed. Closings in Co-op apartments 60-90+ days is not uncommon.
10. Do a walk through of the unit as soon as you know the closing date. This way, you can check for any defects that need to be remedied and addressed before closing.
11. Do another walk through right before you head out to closing on that day to make sure the issues were taken care of.
Closing costs can vary: co-ops are cheaper and condos more expensive (expect 7-10% closing cost on purchase price depending if you are buying new construction). Ask your Manhattan Realtor for a list of closing costs.
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