The final step in the home buying process is your purchasing journey. Once you have finished the initial phase, decided on a co-op, condo or townhouse and found the space you’ve been looking for, it’s time to finance the purchase. In the final installment of our New York City buyer’s guide, we will walk you through the steps that it takes to finalize your loan and secure your dream home.
The Purchasing Process
The purchase process for a condo or townhouse can move quickly, as long as a loan can be secured in a timely fashion. In such instances, a sale can move from contract to closing in about 60 days. However, the co-op process is more involved and often takes longer—60 to 90 days, or longer, is not unusual.
After you’ve pre-qualified for a loan, you’ll want to acquire a written “good-faith” estimate from the lender. To get this pre-approval, you will have to submit information like pay stubs, bank statements, tax returns and other documents, along with an in-person appointment and a possible fee. Once you’ve secured pre-approved loan statement, it is normally valid for 60 days.
2. Property Search
Once your finances are in order, begin searching for your new home with the help of your agent. Whether looking for a co-op, condo or townhouse, this part of the process is one of the most important. Look for a home that fits your space needs, your style and your budget.
3. Offer Negotiation
Once you’re ready to buy, your agent will communicate your offer to either the seller’s agent or to the seller directly. The seller may counter your offer, which opens a negotiation process that will eventually lead to a meeting where price, terms and closing date will be agreed upon.
4. Contract Review
You’ll want to be represented by an attorney that is familiar with New York City real estate during this stage. They should examine the contract of sale and by-laws and financial condition of the building to conclude it’s satisfactory before allowing you to sign the contract.
5. Sign Contract
At this time, you will usually be required to present a deposit. The contract, plus the deposit, will then be forwarded to the seller for a signature. This money will be held in the seller’s attorney’s 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.
6. Loan Application
If financing, you should move forward with your loan application and schedule an appraisal with your financial institution.
7. Complete co-op board package/condo application.
You will receive these requirements and materials from your agent, which typically include: an application, a financial statement signed by the purchaser or a CPA, all requisite support for your financial statement, two to three years of tax returns, bank statements, letters of personal and financial reference, letters of professional reference, the contract of sale and bank documents (if financing) indicating that your loan is in place. Your Douglas Elliman agent will assist you in this process. In the case of a co-op, if your application meets initial approval, you will be invited to be interviewed by the board or an interviewing committee.
8. Board Approval
The board will review your package that you’ve put together with the help of your agent and, if initially approved, you will interview with the board. Once you have met with them and they have considered all aspects of your application, if you’ve been approved, you can move forward in the purchasing process.
9. Bank Supplies Clearance to Close
Once you have submitted everything required to your lender, they will review all of the paperwork and complete any action necessary on their end to secure final approval. Once everything has cleared and satisfied, the lender will let you know you have been cleared to close.
10. Closing Scheduled
Once you have received approval for your financing, you can schedule the closing. Be sure to wait until your loan has been funded by the lender, which can sometimes take a few days.
11. Final Walk-Through & Closing
At the closing, you will read and sign all documentation and paperwork for both the home and for your loan. Once the seller has received your payment, the ownership of the property will be transferred and your home will be yours.