The Coop Closing – What to Expect as You Approach the Finish Line

Upon hearing the great news that your board package and interview are approved, you have officially entered the home stretch of the coop purchasing process. Now the parties can begin scheduling the closing. It takes a coop approximately two weeks to get all necessary documents in order before a closing can be scheduled, so keep this in mind. Your attorney will take you through all the final details specific to the financial and contractual elements of your purchase. The following is an overview of what to expect as you approach your coop closing.

1. Closing Statement

Your attorney will send you a closing statement one to three days before the closing. This outlines the checks you must bring to the closing – how much and to whom the checks should be written. Checks must be certified bank checks; your attorney will thoroughly walk you through this.

2. Property Walk-Through

Your broker will coordinate with you to schedule the final walk-through. The standard NY practice is to do this one day before the closing or, occasionally, the morning of. I recommend twenty-four hours if possible. The purpose of the walk-through is to ensure that the property is in agreed-upon condition. Ideally, there will be time for the coop’s superintendent to resolve any small issues. If not, alternative resolutions can be negotiated at the closing table in lieu of delaying the closing.

3. Do I have to attend the walk-through and closing?

In most cases, the answer is no. Your broker can always attend the walk-through for you instead of with you. For the closing itself, you usually have the option to give ‘power of attorney’ to your attorney and let them sign on your behalf. If you are interested in this, make sure to let your attorney know well in advance so they can confirm that it is a viable option for your deal and the paperwork can be prepared in advance of the closing.

4. The Closing Table

You should allow approximately two hours for your closing. The time can be a little less if it is a cash transaction or a little more if there are any issues that need to be resolved or late arrivals.

You can expect to see several people at the table: the transfer agent (the individual representing the coop), the seller’s attorney, the seller, the seller’s broker, the bank attorney (if you are getting a loan), your attorney, and your broker. If the seller has a mortgage, a representative from that bank will also stop by the closing to pick up their mortgage pay-off check and drop off the original stock and lease for the transfer agent to cancel once the closing is completed.

5. The Documents

There are many documents for you to sign. This is the typical order in which they are signed:

• Bank Documents – When getting a loan, these are signed first because they need to be sent to the bank’s closing department for funding approval after signing, which can take some time.
• ACRIS (City and State transfer documents). These need to be signed to let the city/state know who is involved in this transaction and the amount of tax to be paid on the deal by the seller.
• Mansion Tax – If the purchase price is above one million dollars, you are required to pay mansion tax at closing.
• Coop Documents – the transfer agent will need signatures on the required coop documents, such as tax abatement forms, emergency contact information, and documents that indicate your ownership in the corporation (the stock and lease).

Once you have signed everything and any walk-through issues have been resolved, and your lender has funding approval, the transfer agent will confirm that they have permission to cancel the seller’s stock and lease and issue your stock and lease, a formal paper certificate. This is a happy moment in the transaction and a great opportunity for you to take a photo of yourself with your stock and lease for documentation because the bank will hold the original certificate if you have a mortgage. Coops are still rather old school with this original paper-certificate protocol. When your loan is fully paid off, the stock and lease certificate will revert to you for safekeeping.

6. Keys and Move In

Once all of the above is completed, the seller will hand the keys to the buyer, and the transaction is considered complete – you can now call your new property home and break out the champagne. Congratulations!!

Author / Associated Broker
Jillian Maslow