Congratulations, your offer to buy an apartment in New York City has been accepted! Many first-time home buyers are surprised to learn that, while this is an important step in the process, there are still many to take before closing. That’s because an accepted offer in NYC serves only as an agreement on price, timeline, and contingencies (e.g. financing, appraisal, and inspection). Until both parties sign a contract, the Seller can continue to show their property to other potential buyers and you are still at risk of being outbid. Working quickly through the following steps is key to locking in your dream home without any surprises.
1. Review Contract & Due Diligence Materials
After your offer is accepted, your real estate attorney will review the contract of sale sent by the seller’s attorney. Next, they will evaluate any due diligence materials for the building and unit including Board meeting minutes, building financials, house rules, and the building offering plan to ensure you are fully in the know about the building's financial health. They’re looking for line items that may cause monthly costs to increase, such as planned construction or building updates.
2. Optional Inspection
While more common for purchasing single-family homes and by no means mandatory, conducting an home inspection can give you peace of mind over the condition of the property. If any issues are uncovered by the inspector, you can ask the seller to remedy them or request a closing credit.
3. Sign Contract
Once the due diligence materials have been reviewed and your attorney has negotiated the terms of the contract, it’s time for you to sign. Signing the contract cements the price of the property, down payment, closing costs, and terms of the transaction. It also requires you to pay the contract deposit, which is commonly 10% of the purchase price.
4. Apply for a Loan
The formal loan application process is more in-depth than obtaining a pre-approval and the deadline is typically stipulated by the contract—most often 3-5 business days after signing. Your lender will order a third-party appraisal of the property as collateral for the loan, and once the property value is confirmed, your lender will issue the Commitment Letter necessary to proceed.
5. Submit Building Application
To own a unit in either a condo or co-op, you must submit a sales application to the condo or co-op Board; they vary slightly depending on the property so a detailed list of required documents is stipulated within the board application itself. Co-op applications tend to be a little more in-depth and usually require reference letters and extensive financial documentation.
6. Schedule Your Closing Date
Lead times vary, but most condos in the city take 8-10 weeks to close while co-ops typically take 10-12 weeks. You’ll schedule a final walk-through 1-2 weeks after all paperwork is approved with the actual closing commonly executed the following day. The procedure rarely includes any major hiccups, so in just 1-2 hours you’re more than likely to be holding the keys to your new home.
Ready to become a homeowner in New York City? Schedule a call to be matched with a Byson real estate agent that can help you every step of the way.