First Time Buyer Needs Help w/ Contract

I just signed my contract and I am a first time buyer as well.

I bought a coop and it's very important to find out EVERYTHING about your coop, google your board members, go through the financials thoroughly with your attorney, go through minutes, ask questions, go look at your unit one more time before you sign.

Get electricity bills, ask about move in costs, closing costs, past maintenance increases, how are the building mechanical systems, who does their maintenance? What can do you alter in your unit without approval? Do you need insurance? Google your address on the NYC building department to see if there are any outstanding violations.

Basically just do your homework and you'll be fine, everything else will be added by your attorney to cover you.

But just know once you sign, you're basically in it, there's no backing out unless something in the contracts allows you to back out.

You don't trust your lawyer?

Ask for a financial contingency clause. Where if you don't get a loan, you can pull out of the contract without penalty. That would be the main thing I would tell you to get in the contract.

Also if possible, try to get the close date set about 2-3 months after signing of contract because the banks move really slow in processing your loan. They will usually take 1 week for appraisal, another week for commitment, then you can submit your board package which can take a month to get approval, may or may not include interview scheduling time. Finally another 1-2 weeks to get clearance to close from the bank.

You want the date as late as possible to extend your financial contingency clause, which protects you.

What do you, the buyer want?
Your lawyer should ask you.

Do you want the window treatments, appliances, lighting fixtures that are there?
If they are nice, in working order and you want to keep them your lawyer will write that in.

You are paying your lawyer to watch out for you in the contract.

Make sure there's no mortgage non-contingency clause!!!!

sublease policy

Thanks Truth. It's a total gut job, so I do not want the appliances etc.

Thanks Matt. I have requested a mortgage contingency clause to be put in.

Thanks Switel.

Anything else?? Can buyer's in NYC ask seller's to pay closing costs?

"Closing costs" is a broad term. You can ask for whatever you want, but it helps to be specific. For example, you can ask that the buyer paying the co-op flip tax, assuming there is one.

Your attorney should have a standard rider that she or he will attach to the contract. Since it is a gut job, you may want to request x number of visits (for example, three) to the apartment before closing with your architect/engineer.

sublease policy has nothing to do with the contract--never mentioned there

make sure your lawyer due dillies all coop issues like sublease policy--

plenty of threads on this site cite coop issues he should learn of and explain to you, as well as contract issues

You have NO DEAL until seller's signed copy is returned to you. Prepare to be jerked around by agents, lawyers and the co-op board.You may be quite happy when you are finally rejected and begin again, next time looking for a condo.

Most lawyers use a pre-printed "form" and then add what are called "rides" (additional provisions for things not covered in the form). Your attorney likely has standard riders he asks to be included. A few that my lawyers added that I found helpful:

1) in the event a lawsuit is brought, losing party pays for the other party's attorney fees
2) Seller represents and warrants that there are no violations of records against the Unit that Seller is obligated to cure and Seller has no knowledge of any condition that constitutes a violation of law.
3) Mortgage continency.
4) Upon reasonable request, Seller will grant Buyer access to Unit prior to Closing for contractors to review and conduct estimates.

As for closing costs, obviously everything is negotiable, subject to next paragraph, there are a things that are almost always paid by the Seller (Transfer Taxes, real estate broker commission are the big two) and things that are almost always paid by the Buyer (Mortgage Recording Tax, Mansion Tax (if purchase price over $1 million; title insurance).

Since you are buying a coop, closing costs are minimal. I don't think you will have Transfer taxes or mortgage recording taxes (I think the mansion tax still applies). There will also be application fees from the management company, move-in deposits, and other fees that add up. I'm not 100% sure, but I don't think most people get title insurance for a coop. All-in-all, the closing costs for coops are a small fraction of those for a condo.

Yes, get mortgage contingency. You may also want an appraisal contingency (i.e., it appraises for at least what you're paying). Confirm in contract that seller is paying standard seller costs (transfer taxes, flip taxes, and commissions). We found out after closing that seller had not paid transfer taxes due.

I assume a mortgage contingency (there or not) was a vital part of the original accepted bid unless the listing agent was a moron.

As kylewest has made clear often here, make sure you and your attorney are clear on Local Law 11 compliance. Your highly-recommended attorney may still only go through the motions and tell you the building was "safe" at last check but that does not mean there wouldn't be major costs coming up as the next cycle is ongoing now.

40% of the block numbers have had to file for the 2010-2015 cycle already and the other 60% in the next nine months. You need to have a clue through past inspections or the current financials what costs you as a shareholder would be liable for near-term and what reserve fund the building has to cover them.

The 'standard' contract (the REBNY one that's been approved by the Bar Association & County Lawyers Assn) will spell out exactly, and in detail who is paying what (it will not say 'Seller will pay the usual costs...'. Every item will be clearly identified, and there aren't a lot of options. To the extent anything in your or your lawyer's due diligence turned up any financial problems, you may have some leverage to get cost adjustments made.

Useful things my lawyer added: seller representation about leaks, mold, noise complaints (either ones seller made, or ones made against them), bedbug infestations, certifications that seller made no renovations without co-op approval, and certification that seller made no renovations that were illegal.

Ok. Thanks everybody. Extremely helpful!