Buying a home is probably the largest and most difficult financial and emotional decision you will ever make. The New York real estate market is especially challenging to navigate and is unique in many ways. Therefore, it is important you are confident the broker you have chosen will provide you with the most accurate market information, is attentive to your needs and desires and will help you make sound decisions.
The Purchase Process
Step by Step:
Wish List: Make a list of all of your criteria by order of importance. This will help your DJK agent find properties that fit your budget and match as many of your requests as possible.
Viewing Properties: We will research our extensive listings database and arrange viewings of properties that fit your criteria and budget.
Mortgage Pre-Qualification: New York City may be the fastest moving real estate market in the world. Therefore, offers from mortgage pre-qualified buyers are often taken more seriously than those awaiting mortgage qualification. Obtaining a pre-qualification letter is an easy, cost-free service provided by banks or reputable mortgage brokers that give the seller comfort in your ability to purchase their apartment.
Making an Offer: Once you have found your perfect property, we will submit a written offer on your behalf. This letter will include offer price, the name and contact information of your New York attorney, and your personal information such as income, financial qualifications and any other information that will make you a stronger candidate.
Deal Sheet: After negotiations are complete and the seller accepts your offer, your DJK agent and the seller’s agent will prepare and distribute a “deal sheet” that provides the required information to both parties’ attorneys and brokers and conveys the agreed-upon terms for the preparation of the sales contracts.
Contract of Sale: The seller’s attorney will draft a contract of sale and forward it to your attorney for review. Once you sign this, it will be sent with a deposit check (typically 10% of the purchase price – please note this is only a guideline and a seller may require a different amount) to the seller’s attorney who will hold the deposit in escrow until the closing of sale. Once the seller signs the contract, it is deemed “fully executed” and binding. This process may take one to three weeks, depending on terms and review of the offering plan and board minutes by your attorney, called “due diligence.”
Mortgage Application: This process may take 45 or more days to complete, therefore it is important to contact your bank or mortgage broker immediately after having a signed contract. Lenders will require a “fully executed” contract with the application.
Preparation of the Board Package: Your DJK agent will assist you in the preparation of your Co-op or Condo Board Package, craft the board application, provide copies to the management company and help you with any other requirements.
Board Interview: (This applies to Co-op sales only) You will be contacted for a scheduled interview with the Board of Directors. Notification of their decision will be given in 48 to 72 hours. Your attorney will coordinate the closing once the board has given purchase approval.
The Walk-Through: Your DJK agent will accompany you to inspect the property prior to the closing of sale. This inspection is important to verify all is working properly in the apartment and the seller has or is moving out as agreed. Important things to inspect are appliances, faucets, plumbing, light fixtures, outlets, etc.
The Closing of Sale: Closings are normally held at the office of the managing agent with your attorney, the seller and seller’s attorney, the lender’s attorney, a representative of the management company’s transfer department and both real estate agents in attendance.
Timeline for Purchasing a Home: Now that you're ready to buy a home, here is a general timeline of events. Once you decide to make an offer on a home, in most cases it can take an average of 60 - 120 days to complete the closing process.
- • Prepare the Offer: 1 day
- • Negotiation of the Offer & Acceptance: 2-5 days
- • Loan Application & Appraisal, Loan Approval and Commitment Letter, Sign Contract/Escrow Deposit: 2-4 weeks
- • Co-op Board Package & Interview/Condo Application: 4-6 weeks
- • Bank & Attorney Prep Closing: 1-2 weeks
- • Final Walk Through: day of closing or just prior to
- • Transaction Closing: 2-4 hours
Time table based on industry averages, actual times may vary
FAQ (Frequently Asked Questions)
What is the difference between a Condominium and a Co-op?
Owning a Condominium is like owning a home. You receive title to the real estate, pay property taxes to the city and common charges to the Board of Managers. Real estate taxes are tax deductible; however common charges are not. In the past, there was no approval process required for condominium buildings, though recently that has changed. Most Condo subletting policies are more lenient than Co-op policies and are often the better choice for investors.
Co-ops comprise approximately 80% of New York City’s housing market. When you purchase in a Co-op you are buying shares of stock in the corporation that owns the building. You will be issued a Proprietary Lease giving you the right to occupy the apartment. You will pay monthly maintenance, which covers the upkeep of common areas, staff salaries, and managing agent fees, as well as real estate taxes and interest on any underlying building mortgage.
Should I work with more than one agent at a time?
Working with one agent saves you time. In Manhattan, REBNY member brokers share all available listings. DJK Residential is a REBNY member in good standing.
How long should it take to find my dream home?
The average first-time buyer finds a home within one to two months, but it may be sooner because our agents are extremely knowledgeable of New York real estate and can easily match your needs with the available inventory.
What will I need to present to a Co-op Board?
Generally, Co-op Boards require a purchase application, a financial statement with back-up documentation, personal and financial reference letters, a letter from present landlord, employment verification, business letters of reference, tax returns for at least two years and permission to run a credit check. You will also be required to pay several types of fees.
In New York, will I need to hire a real estate attorney?
It is highly recommended that both the buyer and seller be represented by real estate attorneys licensed in the state of New York, although it is not mandated.
When should I begin looking into financing?
As soon as you begin searching for a property to purchase.
Can I renovate a Co-op?
Each Co-op Board has individual policies regarding renovation. Generally, you will need to fill out an “alteration agreement” describing the exact work you wish to do, which the Board reviews prior to approving the proposed renovations.
How much money do I need to put down?
When purchasing a Condo, you will generally be asked for a deposit equal to 10% of the purchase price. When purchasing a Co-op, the requirements vary, but a minimum of 20 to 25% of the purchase price is typical, however, many buildings vary. Although it is rare, a few Co-op buildings will not allow financing at all.
How long should I expect it to take from accepted offer to signed contracts?
Typically the process takes one to two weeks. Your agent will be in communication with the parties on an on-going basis to ensure progress and to handle any issues that may arise.