Much like getting a table at the hottest new restaurant, buying an apartment in NYC usually takes longer than almost everywhere else. Those who’ve never purchased property in NYC tend to significantly underestimate how long the process takes, from initial viewing to closing day. Unless you’re buying a condo or townhouse with all cash, you’ll need to cultivate the virtue of patience. But with some proper planning and foresight, you can lessen the many roadblocks ahead. Here’s what to expect as you move towards homeownership.
Finding an apartment: 3 weeks to 3 months on average
If you want things to move fast, you have to know exactly what you want while also being realistic. Your budget will be a significant factor, the more cash you doe a down payment, the more options you’ll have.
Expect a lot of competition from other interested buyers if your budget is below $1.5 million. Other factors that will influence how long your search takes include:
- The Neighborhood – The more popular the neighborhood, the longer the search. Neighborhoods with high demand and low inventory include top-market areas like Tribeca, SoHo, Nolita and Greenwich Village. In Brooklyn, people are drawn to the quaint, tree-lined streets of Brooklyn Heights, Carrol Gardens, Fort Greene and Park Slope. The usual workaround is to find apartments in areas that are close to, but not in, these areas.
- Your Real Estate Agent – Hiring the right buyer’s agent for the job can mean the difference between success and failure. The right agent is one who knows the neighborhood in question, is familiar with the inventory, understands your needs and wants, and, just as importantly, is someone you can get along with. Be sure to ask the right questions when interviewing potential agents.
- Your ability to compromise – It’s very rare for a buyer to find everything they’re looking for in a deal. NYC real estate is all about compromise. Decide early on what you need and would like but can do without. Do you need a building with top-of-the-line amenities like a doorman, pool, and gym? You might need to forgo a one-bedroom in place of a studio. What about having a lot of space? You may need a bus to the nearest subway. If you don’t want your search to take forever, you need to be flexible in your wants and needs.
From offer to acceptance: 2 to 4 days
Once you’ve found a place, it’s time to make an offer. If you’re going to be making a lowball offer, make sure you have reasons to back it up. Sellers want to know that you’re serious and you can do this by having all the paperwork and team of professionals including real estate attorney and banker etc. in place and ready to go. Include your mortgage pre-approval letter and your, submit offer form, along with the contact details of your attorney and lender. Including a “Love Letter” can also help sweeten the deal if you’re facing a bidding war with other interested buyers. Also, be wary of negotiating mistakes that could stall the process, or tank the whole deal.
Preparing a contract and signing: 1 to 3 weeks
Once an offer is accepted a deal sheet will be circulated between the brokers and attorneys. After this, the seller’s attorney will prepare and send a contract of sale, along with the building financials and by-laws to your attorney to review. This due diligence period between both sides can take one to two weeks depending on the specific issues that come up during the attorneys’ evaluation and back and forth regarding contract rider notes if any.
Assuming that the home inspection turns up no issues and both parties are happy with the contract of sale, the buyer signs the contract and makes the 10% escrow down payment which is delivered to the seller. Once they sign it and send it back to your attorney, you now have a binding contract of sale.
Receiving mortgage commitment: 6 to 12 weeks
If you’re financing, now is the time when you pass on your fully executed contract to your lender. You’ll need to submit bank statements, pay stubs, W2s, tax returns, and whatever else is required for the audit. Along with this due diligence on both your financials and the building, a home appraisal will be conducted. On average the process can take 30-45 days but can take longer depending on the process and how many follow-ups are required.
The Board Application: 30-45 Days
If you’re purchasing a co-op apartment, you should start immediately on putting together your co-op board package once you have an accepted offer. This will include not only information like you submitted to your lender but also reference letters and whatever else the board requires.
Board approval can be subject to numerous delays that are entirely outside your control such as their schedules to meet and procedures for reviewing board packages. If you’re fortunate, have a superb board package and ace the board interview, you will receive the green light to close. More often it can take up to 45days in total from the date of board application submission.
While condos also require board approval, this is more of a formality as they have much less power to refuse your application. Assuming you’ve provided all the necessary paperwork, all you’re waiting on is a waiver that declines their right of first refusal. Condo board approval can take anywhere from a few days to a month.
Scheduling the closing: 1 to 2 weeks
Like receiving board approval, this is a hard one to estimate as it all depends on the parties involved. Assuming that everything is in order and everyone is eager to close, it can take about one to two weeks to schedule a closing. Your attorney needs to coordinate with the title company, confirm with the bank that they’re ready to show up with the checks and find a date that works for all the parties involved. On closing day, it will finally be time to hand over the remainder of the payment and receive the keys to your new home. The average timeframe in NYC from an accepted offer to closing day is 60-90 days. But with so many variables in play, it can sometimes take longer.