What is the purchase process?
The steps to purchasing a co-op or a condominium in Manhattan are very similar. Let us assume that you have found the property on which you wish to place on offer and that you have spoken to a bank or mortgage broker (if financing) to determine a comfortable and qualifiable price level.
- Offers are made orally in New York City. When you have found the right property, a bid or offer will be placed through your agent. They will convey your offer to either the seller’s agent or the seller directly.
- The seller may “counter” your offer. This will begin a negotiation process that will eventually lead to a “meeting of the minds” at which point price, terms, and closing date have been agreed upon.
- Contact a real estate attorney familiar with real estate in our area to represent you. The seller’s attorney will begin preparation of a contract of sale, and during that time your attorney will begin to examine the financial condition of building in which you wish to purchase.
- After your lawyer concludes that the financial condition is satisfactory, that the by-laws of the building are acceptable to you, and that the contract of sale is also acceptable, your attorney will allow you to sign the contract. At that time you will usually be required to present a deposit of 10% of the purchase price. The contract will then be forwarded for signature by the seller with the deposit. This money will be held in the seller’s attorney escrow account until closing. It is important to note that until all parties have signed the contract, and it has been delivered, the seller can still entertain and accept other offers.
- If financing, you should move forward with your loan application.
- You will, by now, have received from your real estate agent the board requirements and application materials. The application materials can be similar for a cooperative and condominium. However, the actual process is quite different. You will work to complete all of the required materials which typically include: an application, a financial statement signed by CPA, all requisite support for your financial statement, three years of tax returns, bank statements, letters of personal and financial reference, letters of professional reference, the contract of sale, bank documents (if financing) indicating that your loan is in place, etc.
- When your “package” is complete, it will be reviewed by an Douglas Elliman Manager, and then, assuming it is accurate, it will be forwarded to the managing agent for review. Upon determination that it is in order and that credit checks were acceptable, it will be forwarded to the Board of Directors. No applications will be accepted by Managing Agent unless they are complete.
- In the case of a cooperative, if our application meets initial approval, you will be invited to be interviewed by the Board or by interviewing committee. Please take this meeting seriously. It should be treated as business meeting.
- After approval by the Board, you are ready to begin planning for closing!
In the case of a condominium, there is a generally no formal interview. Your application will be reviewed, and if all required materials are included and in order, an approval is typically granted.
The entire process can move quickly in a condominium, and assuming a loan can be secured in a timely fashion, one can move from contract to closing in about 60 days. However, the cooperative process is more involved, and 60 to 90 plus days is not unusual.
CLOSING COSTS
The following guide will give you general closing costs associated with the purchase or sale of a cooperative or condominium. Please note that these are estimates and that potential buyers and sellers should consult their real estate attorney or financial advisor for specifics. Importantly, we do not represent that these are the entirety of potential costs, but are only to be used as a guide.
TYPICALLY ESTIMATED CLOSING COSTS: COOPERATIVE APARTMENTS
FOR THE SELLER
BROKER: typically from 6% depending upon size and marketing
Own attorney: consult your attorney
Co-op attorney: $450.00+
Flip tax: 0% to 3% of price
Stock transfer tax: $0.05 per share
Move-out deposit: one time fee of $500.00+
NYC transfer tax: 1% of price up to $500,000.00; or 1.425% of price of $500,000.00 and over. Plus $25.00 administrative fee.
NY State transfer tax: $2.00 per $500.00 of price, or 0.4% of purchase price
Payoff fee to Title Closer: $350
UCC-3 Filing Fee: $30.00
FOR THE PURCHASER
Own Attorney: consult your attorney
Bank fee: points: 0% to 3% of loan value
Application, credit check, etc: $500.00
Bank attorney: $450.00
Miscellaneous: Bank Fee: $500.00+
Lien search:$300.00
UCC-1 Filing: $20.00
Application fee (credit report/appraisal): $500.00+
Short term interest: equal to interest for balance of month in which you close
Move-in deposit: one time fee of $500.00+
Recognition agreement fee: $200.00+
Maintenance adjustment: pro-rated for the month closing
Mansion tax: 1% of entire purchase price where price is $1,000,000 or more.
CLOSING COSTS
TYPICALLY ESTIMATED CLOSING COSTS: CONDOMINIUM APARTMENTS
FOR THE SELLER
Broker: typically from 6% depending upon size and marketing
Own attorney: consult your attorney
Processing fee: $450.00+
Move-out deposit: one time fee of $500.00+
NYC transfer tax: 1%of price up to $500,000.00;
Or 1.425% of price if $500,000.00 and over
Plus $25.00 administrative fee.
NY State transfer tax: $2.00 per $500.00 of price, or 0.4%of purchase price
Miscellaneous title fees: $200.00
Payoff fee to title closer: $300.00+
FOR THE PURCHASER
Own attorney: consult your attorney
Bank fee: points: 0% to 3% of loan value
Application fee( credit report/ appraisal): $500.00+
Bank attorney: $450.00+
Short term interest: one month
Tax escrow: 2 to 6 months
Recording fees: $300.00
Mortgage tax: 1 ¾ % of amount of mortgage on loans under $500,000.00; or, 1.875% of amount of mortgage on loans of $500,000.00 and over
Fee title insurance: approx. $450.00 per $100,00.00
Mortgage title insurance: approx. $200.00 per $100,000.00
Municipal search: $275.00+
Managing agent fee: $250.00+
Common charge adjustment: pro-rated for the month of closing
Real estate tax adjustment: 1 to 6 months
Mansion tax: 1% of entire purchase price where price is $1,000,000 or more.
Move-in deposit: one time fee of $500.00+
