Are you thinking about buying a co-op apartment in New York City? Read on for all the details involved in purchasing your very own piece of NYC.
Purchasing a co-op takes about three months from the time you sign the contract of sale until you close. Closing costs are less than when you buy a condo. NYC co-ops have strict financial requirements and sublet restrictions. There is a lengthy board application and board interview before you can close on the apartment. Buying a co-op is generally less expensive than purchasing a condo because there are more co-ops than condos and investors tend not to buy them due to the sublet restrictions.
When you buy a co-op, you buy shares in the corporation. You received the shares and proprietary lease at closing. Co-ops are not considered real property. The board of directors runs the building and they enforce the various rules.
Once you have an accepted offer, you will need to hire a real estate attorney to review the contract, due diligence and negotiation and representing you at the closing. Your attorney will review the co-op’s original offering plan, the building’s financials statements, house rules and the board’s purchase application. Upon signing the contract, you will need to write a check for 10% of the purchase price as the deposit. The contract is not valid until both the seller and the buyer sign it. Now each party is legally bound to the transaction. Typically, after an executed contract, the closing will be in two to three months. Beware; that a co-op board may reject a purchase contract and if this is the case, then the buyer can leave the deal without penalties. The buyer may never get a reason for the rejection. However, in most cases, a buyer should keep his or her interview short, sweet and polite. Most times, the board has already approved you and they just want to meet their newest neighbor.
Once you receive board approval, the managing agent will contact you and you will be able to close within one to two business days after the interview. After the co-op board approval, you need bank approval and then the attorneys will coordinate a closing date that works for all parties.
The day before closing, your real estate broker will schedule a final walk-through for you to inspect the apartment and to make sure everything is in working order. Look for any damage that may have been caused by the movers. In New York, properties are sold as is and the only way to prove that something has changed substantially is to take photos.
On the day of closing, there will be attorneys representing the bank, the seller and the buyer as well as the building’s managing agent and the real estate brokers. After all the papers have been signed, you will receive the key to your very own apartment.
All Area Realty Services is New York City’s leading real estate management company specializing in full-service professional property management for cooperative and condominium boards in the Manhattan area.