Bidding and Negotiations
- Your agent will submit an offer on your behalf to the seller’s agent, along with the presentation of your qualifications.
- The seller may accept or counter your offer.
- In the case of multiple bids, your agent will work with you to come up with a “best and final” offer within your price range.
- The conclusion of the process will result in agreement upon the price, terms and closing date.
- You will employ an experienced real estate attorneys to prepare and review the contract of sale.
In Contract
Once your offer has been accepted, you will enter the contract stage.
Your attorney will exercise “due diligence” by inquiring into:
- Proprietary lease or offering plan
- The building’s by-laws
- Statements of the building’s financial condition
Following your attorney’s review and approval, you will sign the contract of sale. At the signing, it is typical to pay an earnest money deposit of 10% of the sale price.
The contract and deposit will be sent to the seller’s attorney to obtain the seller’s signature. Deposit will be held in escrow.
Board Approval
The seller’s real estate agent will provide you with the building’s board requirements and application forms, including:
- Application
- Signed financial statements
- Tax returns
- Bank statements
- Brokerage statements
- Personal, professional and financial letters of reference
- Contract of sale
- Bank financing documents (if financing)
Your agent will assist you in compiling the board package in conjunction with the seller’s agent, who will review it prior to submission to the building’s board of directors.
After reviewing package, the board may or may not ask for additional information. A co-op may turn down a buyer at their discretion. A condominium may only exercise their right of first refusal. In a coop, the board will arrange to interview the buyer, condominium buyers are not interviewed. The time lapse between submission of the board package and scheduling of the interview can vary greatly. Ideally, approval will come from the building’s managing agent, typically within days of the interview.
Closing
With the board’s approval, the final step is the closing. The closing usually occurs in the office of the building’s managing agent. The exact date should be flexible to accommodate everyone (you, the seller, the attorneys, the banks, and the managing agent). It is best to allow for a potential delay of up to 30 days from the closing date specified in the contract.
Your agent will schedule an inspection of the property for you, immediately prior to the closing.
Estimated Closing Costs for Cooperative Buyers (all costs are approximate)
- Buyer’s attorney (this varies): $2,500
- Bank fees (if financing; application, credit reports, appraisal, bank attorney, etc.): $2,500
- Mansion tax: 1% of entire price when the purchase price, inclusive of any transfer taxes paid by purchaser on behalf of seller, exceeds $1 million
- Lien search and UCC filing: $425
- Managing agent or co-op attorney: $750
- Maintenance adjustment: up to one month*
- Short-term interest adjustment: up to one month*
- Move-in deposit or fee: $1,000
- Flip tax (if any): generally around 2% (variable and who pays may be a point of negotiation)
*Prorated for month of closing.
Estimated Closing Costs for Condominiums & Townhouse Buyers (all costs are approximate)
- Buyer’s attorney (this varies): $2,500
- Bank fees (if financing; application, credit reports, appraisal, bank attorney building questionnaires, etc.): $2,200
- Recording fees: $200
- Mortgage tax: 1.8% of amount of mortgage on loans under $500,000 or 1.925% of entire amount of mortgage on loans over $500,000
- Mortgage title insurance: approximately $200 per $100,000 (if financing)
- Title insurance fee: approximately $450 per $100,000
- Mansion tax: 1% of entire price when price exceeds $1 million
- Miscellaneous title charges: $500
- Managing agent’s fee: $500
- Common charge adjustment: up to one month (prorated for closing month).
- Real estate tax adjustment: one to six months (expect eight months combined between buyer and seller as an adjustment and escrow established by lender).
NOTE: When purchasing in a new development from a sponsor, the purchaser will typically be required to pay New York City and New York State transfer taxes (1.825%) as well as the sponsor’s attorney’s fee.
Preparing Your Home For Sale
- Make sure your home is clean and tidy. Remove unnecessary clutter.
- Allow your agent to schedule showings during the best lit times of day
- Arrange to be our of your home when your it is being shown.
- Prepare all building documentation, including rules and regulations, flip tax, etc.
- Find a qualified Real Estate Attorney.
Bidding and Negotiations
- The bid is usually presented by the buyer’s broker along with the buyer’s qualifications.
- You may present counteroffers if you are not satisfied with the offers received.
- You will work closely with your agent to identify the offer that best satisfies your needs.
- The conclusion of the process will result in agreement upon the price, terms and closing date.
- Your attorney will prepare the terms in conjunction with the buyer’s attorney.
In Contract
While your attorney prepares the contract of sale, the buyer’s attorney will exercise “due diligence” usually requesting:
- Statement of the building’s financial condition
- The building’s by-laws
- Proprietary lease or offering plan and amendments
- With the approval of the buyer’s attorney, the contract of sale is signed by the buyer. At the signing, the buyer typically presents an earnest money deposit of 10% of the sale price.
- The contract and deposit are sent to your attorney, who will obtain your signature.
Board Approval
Your real estate agent presents the buyer with the building’s board requirements and application papers, which may include:
- Application
- Signed financial statements
- Tax returns
- Bank statements
- Brokerage statements
- Personal, professional and financial letters of reference
- Contract of sale
- Mortgage documents (if financing)
The buyer’s agent in conjunction with your agent will compile the board package. Once everything is in order, the package will then be submitted to the building’s board members.
After reviewing package, the board may or may not ask for additional information. A co-op may turn down a buyer at their discretion. A condominium may only exercise their right of first refusal. In a coop, the board will arrange to interview the buyer, condominium buyers are not interviewed. The time lapse between submission of the board package and scheduling of the interview can vary greatly. Ideally, approval will come from the building’s managing agent, typically within days of the interview.
Closing
After board approval, the final step is the closing. Ordinarily, the buyer will inspect the property prior to the closing.
If all is in order, the closing usually occurs in the office of the building’s managing agent. The exact date should be flexible to accommodate all parties (you, the buyer, the attorneys, the banks, and the managing agent). It is best to allow for a possible delay of up to 30 days from the closing date specified in the contract.
Estimated Closing Costs for (all costs are approximate):
Condo and Townhouse
- Broker: 6%
- Seller’s attorney (negotiated flat rate) $2,500
- NY City Transfer Tax: 1% of sales price for sales of $500,000 or less; 1.425% for sales in excess of $500,000
- NY State Transfer Tax: $2 per $500 (or 0.4% of sales price)
- Miscellaneous title company fees (if seller has mortgage): $450
- Move-out deposit or fees (condo): $1,000 (varies)
- Managing agent fees (condo): $500
These figures are for general reference. Actual closings costs will vary for every transaction. Before signing any contract, sellers should have all closing costs explained to them by their attorney.
Co-Operative Sellers
- Broker: 6%
- Seller’s attorney (negotiated flat rate): $2,500
- NY City Transfer Tax: 1% of sales price for sales of $500,000; or less 1.425% for sales in excess of $500,000
- NY State Transfer Tax: $2 per $500 (or 0.4% of sales price)
- Flip tax (if any): Often 2-3%, vary and may be paid by either buyer or seller
- Managing agent fee: $600
- Stock Transfer Tax: $0.05 per share
- Move-out deposit or fees: $1,000 (varies)
- Payoff bank attorney (if seller has mortgage): $500
- UCC-3 filing (if seller has mortgage): Up to $100 per loan
These figures are for general reference. Actual closings costs will vary for every transaction. Before signing any contract, sellers should have all closing costs explained to them by their attorney.
Our New York City Real Estate Guide is available to download in digital form