Below is a step by step guide of what to expect from the point a contract is sent to a buyer's attorney until that glorious day at the closing table. And don't forget to review your closing costs early on in the process so you have no surprises!
- A contract is sent to the buyer's attorney from the seller's attorney from a boiler plate form with attached riders.
- The buyer's attorney conducts their due diligence for their client which consists of but is not limited to reading of the Co-op Board minutes, reviewing the building financial statements, offering plan, proprietary lease, and house rules.
- The buyer's attorney then marks up the contract with suggested changes; it then goes back and forth until both attorneys agree on language.
- Once the contract is finalized, the buyer will sign and provide a 10% deposit check to be delivered to and deposited in your attorney's escrow account until closing.
- The seller will then sign the contract.
- Once the contract is fully executed (signed by all parties), it is delivered to the buyer and they have typically 30 days to submit their application to the Board with their mortgage commitment letter.
- The seller's real estate agent reviews the board application and almost always has to request additional documentation or changes which take approximately 1-5 business days.
- Multiple copies of the application are made by the real estate agent and delivered to the managing agent.
- The managing agent then takes 1-2 weeks to 'process' the application which includes running credit reports, etc. -- they disseminate to Board members.
- Board members review the purchase application and all supporting documentation to determine if they will interview. Members may choose to review and give their opinions via email, they may require a discussion to take place at a set monthly meeting time, or they may decide to review packages together on an as needed basis.
- Assuming they find the application acceptable, a notice of interview date can come anywhere from 1 week to 1 month after Board receives package from management (this is where a seller can reach out to board to kindly request them to expedite the process).
- Board interviews the buyers.
- Contracts are typically approved within 1-3 business days but some buildings take longer.
- Closing is then scheduled to take place approximately 10-14 days after approval or as stated in the contract (most Manhattan deals NEVER close on the date specified in the contract).
Realistically, one should expect the closing of a Manhattan Co-op to take approximately 2-4 months from the time a contract is sent out; having said that, things like holidays, vacations of Board members and other pressing business that a Board may have to address are all factors that can lead to further delays.