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I've heard conflicting info on timeline from when you make an offer, have a signed contract, give a deposit, get the mortgage, etc.
When do you pay the downpayment? What percentage is the deposit? Do you give the deposit when the offer is accepted? Do you pay for the inspection before or after you've been approved by the board?
Ten percent deposit is paid at contract signing. Additional downpayment would be paid at closing (so 15 percent additional on a 25 percent down co-op.)
Depending on the type of building you are buying in, and inspection may not be necessary. If it is a large building with an active board where minutes are recorded frequently, then between your attorneys reading of the minutes and his or her sending out of a questionnaire to management, you may be able to save yourself several hundred dollars on the inspection. This being said, plenty of my buyers have chosen to hae an apartment/building inspected for peace of mind. In NYC, this would be done BEFORE contract signing....you don't see many contracts contingent on the inspection like you do in the burbs. In a small building like a townhouse or divided brownstone, I would always suggest an inspection.
You typically have a 5-10 business day window, after the offer is accepted, to conduct the due diligence and sign the contract.
Hope this helps.
Thanks. The broker I fired told me the deposit was 1% - 3%. It is confusing.
In another thread it seems like a contract allows 45 days to get the mortgage. Is it correct that when the mortgage is approved the bank issues a check that is handed over at closing with the remainder of the down payment?
I was told closing costs on a coop are about $3500. Also was told a real estate atty working on a flat fee should cost around $3500.
So... deposit, remainder of downpayment, closing costs, atty fees. Mortgage. Are there any other fees involved in purchasing/closing?
Is it also possible to find out if board will approve renovations before signing the contract? Thanks.
Standard contract calls for 45 days for mortgage. Total process will take you about two months since you have to get mortgage commitment before meeting the board. The mortgage company will send someone to the closing to hand over the check and to get the stock certificate for the apt. When you apply for a mortgage, they will send you a GFE (Good Faith Estimate) that will show you approximately how much the closing cost will be including appraisal, application fees and other costs. The attorney costs can be more or less than $3500 depending on who you hire but that's a good ball park number.
Buy sprint now bf you are priced out forever.
I just bought a place, and I would say that you are more realistically looking at around 2-3 months. At contract you typically put down a 10% deposit.
Closing costs will depend on your management and coop. but 3500 sounds roughly correct(this should include move in costs if your building charges it). My attorney worked for a flat $2100. As for the 45 days, I think that would be the committment. To get to closing is much more difficult and most likely will take longer than 45 days.
Hope this helped
There are rules, and there are industry standards. These are contracts, and there is no rule that says 45 days.
There are people on this board posting TODAY complaining about how long underwriting is taking at some banks- don't know if it's endemic, based on some new regulation, a stronger market, or not really an industry-wide phenomenon.
The point is - if you fear it can take longer to do something, try to negotiate for a longer period - one of the standards is that the party making the offer names their target closing date. That is negotiable between offer acceptance and closure, but it's your deposit on the line if you can't make it (BTW, within 30 days post the closing date on the contract is considered still abiding by the contract) - so judge if the seller has leverage to force you into their closing date and if not, get a later date.
Deposit- 10% Pretty hard to break this standard. Pretty close to being a rule. Offer less and you spook a seller/their attorney; offer more and you shortchange yourself.
Attorney- Should cost you $2500-3000 including what they pass through to you in courier costs/surveys the building managing agent charges them. If you are a first-timer, you want an attorney big on the hand-holding process, and in general, you want a guy who can prove he can smell a rat and will zealously negotiate for you- not a guy who will try to advance the deal so he can get paid. There are upsides and downsides to the model of upfront retainer vs pay-entirely-at-the-end.
Costs- My costs (bought a co-op with a mortgage) exclusive of the attorney were $4150 and included a couple of ransom payments to the managing agent and the building for move-in and inspections. About $2000 was various mortgage-related costs (their attorney, appraisal, filing fees, etc) that are deducted from the loan proceeds and not paid out-of-pocket.
Oh, and if your purchase is over $1 million, don't forget the 1% mansion tax!
A board will never approve a plan for renovations before you are a shareholder. If you do go into contract on this property, I suggest getting the contractor to take a look at the apartment, having plans written up, and the second you close securing the necessary permits. This was you can submit the plans to the board for approval. Make sure you get the alteration agreement prior to signing - although many are generic, the alteration agreement will make note of when work is allowed, and special restrictions, and so on.
$3,500 seems a bit steep to me. Most of the attorneys I refer charge $2,000 - $2,500 and are VERY good. They are not afraid to kill deals if it's not a smart purchase for their clients.
Depending on the building, you may have to pay a "flip tax" on your purchase of 1 or 2% of the sales price, or a certain number of $$ per share. A good building is also going to ask you for a "move-in deposit" of $500 or $1,000, which you'll get back after you move if you didn't punch any holes in the wall.
DG Neary Realty
Thanks all, this is incredibly helpful.
What are some of the things the attorney will negotiate? Also, do you have to pay to do a title search like you do when you buy a house?
My attorney is (max) $2,500 (still haven't completed my transaction). Hopefully less :) We found out after the fact that there was a ~$500 assessment per month for scaffolding until December 2012 and negotiated that the seller pays it, regardless of when we close/contract. That saved $1,500. They also have connections with other attorneys, so they can help move the process along faster.
>Deposit- 10% Pretty hard to break this standard. Pretty close to being a rule. Offer less and you spook a seller/their attorney; offer more and you shortchange yourself.
On the $2mm and under sales yes.
I've seen 5% on $4m deals. Especially in commercial deals.
Agree on $3500 being high. $1500 to $3000. And $3000 should be after some substancial back and forth with minor and/or major extensive issues involving the attorney's participation.
Shoot me an email. I have a "Purchasing in NYC" pdf document that you can take a look at. It has step by step information with regards to the purchasing process, fees/closing costs, and timelines as they pertain to co-ops and condos. Happy to pass it along.
My closing costs for a co-op are around 12k not including a mansion tax or move in costs. Owners title insurance is 10k. Is this amount high? Do I even need this?
I just purchased a co-op. When I first saw the apartment, the windows were fully shut and I did not try to open them. I did have other concerns such as appliance removal etc. I addressed these with my attorney and the purchase contract was altered to include such. I did not however,say anything about the windows as at the time, I wasn't aware that they needed repairs. Meanwhile, in good faith I signed the purchase contract. After I signed the contract, I had a final inspection with a professional during which I was told that all of the windows needed replacement. I then contacted my attorney and told him to bring this issue up with the seller's attorney. The closing was 2 days later during which, my attorney assured me that the windows would be repaired with the seller's "move-out" deposit. Still during closing, I asked my attorney to put something in writing so that it could be signed by both parties. He said it is not necessary as both the seller and her attorney acknowledged that.
After that, I had a glass company which was recommended by the co-op board come for an estimate which I forwarded to my attorney who on the other hand forwarded it to the seller's attorney. The answer was that they never agreed on window repairs. At this time, I also find out from my attorney that there was no escrow on the account (he says he is not sure why (!!!) ) and also that there was no any inspection contingency on the contract. I had complete faith in my attorney to take care of these things for me as I was not very familiar with buying a property until today. I feel I was misrepresented and I expressed this with him.
Do I have any legal rights in all this and do you have any advise for me?
0) This is a new topic; it would've been preferable to start a separate discussion thread.
1) Get a new attorney. Even if he or she did a reasonably good job on the transaction overall, your faith in the person's competence is shaken.
2) It would be unusual for your co-op to place responsibility for windows on individual shareholders. Most proprietary leases (which draw the dividing line between individual vs co-op tasks) say the windows, as part of the exterior wall of the building, are a corporation responsibility to maintain. Check yours and make sure you're pursuing the remedy through the appropriate party -- you may need to be pestering the managing agent rather than the seller.
LLM: I own a coop apartment and recently received notice that the building's windows and patio doors will be replaced at the building's expense. uptowen Joe is right in that you need to review your proprietary lease. I cannot imgaine that you are responsible for footing the bill for the windows.
Start a new thread.