Timeline from Sign Contract to Closing

ball park...3 months.

Thank you. What will benefit buyer when write in contract, an earlier date or a later date so as to avoid default?

Your attorney should help you with this. You need to also find out how often your building's admission committee meets. The selling agent should have this info. Before you sign with a bank, you should ask them if the building is in their system and is up to date since they need to do a review of the building's financials as well.

Definitely shouldn't be writing a contract yourself, your lawyer needs to do this for you.

In terms of timing, sure one to three months depending on financing: https://www.hauseit.com/how-long-does-it-take-to-close-on-a-house-nyc/

Keep in mind that the contract closing date is approximate, there is wiggle room i.e. "on or about"

Thank you all for your advice. Actually, the problem is due to the "on or about" terminology. I told attorney to have a close date on end of June since this is first time buying in NYC. Then they put on 6/1 and said this is what you wanted. Have checked board package, needs about at least 9 weeks after mortgage commitment. So worrying time is not enough and worry to lose deposit. The contract looks like in favor of seller.

You will not lose your deposit unless you willfully default. And there is no time of the essence clause according to what you have indicated.

That said I am a licensed mortgage broker since 1990. I can get a commitment in 72 hours, there is no cost to apply and you are under no obligation. See my profile on Zillow.

Ellen Silverman
E. S. Funding Co.
NMLS#60631
esfundingco@aol.com

With "on or about" in general the seller can call "time is of the essence" 30 days after the "on or about" date.

I don't think I have ever seen a board package which says that the co-op will not accept an application until 9 weeks after the mortgage commitment is issued. Are you sure you read this right?
Also, there are some boards that do not meet over the summer do two vacations, Etc. This is probably something you want to check on with the coop you are applying to.

30yrs, sorry didn't say clearly, 9 weeks from board getting mortgage commitment letter to schedule closing (after application processing, schedule interview, board decision etc.). Thank you also to mention the summer vacations. will check with the coop.

If you're going into contract now, June 30 is certainly crazy unlikely. The process often takes four months instead of three, and that's usually not a problem except for the fact that the buyer gets upset because his/her team blithely told him/her three months.

ali r.
{upstairs realty}

Ask your lawyer to insert language "30 days after board approval".

I'm confused--has contract already been signed? Agree that June 1 closing seems extremely tight.

30 days after board approval could still mean that the mortgage may not be ready to be funded. Therefore conceivably the closing could be longer than 30 days after board approval.

Mortgage commitments contain many conditions that need to be satisfied. And in the spring especially many lenders are backed up.

Streetsmart, Presumably, the lender has had a chance to know themselves out with due diligence and funding requirements while the buyer is waiting for board approval and closing date has already been set one or two weeks after board interview date. How may days do you see in contracts? 60 days after board approval?

My attorney said on or about June 1st means end of June closing and also said closing date is not as important as I thought.

@newcomer, sounds like you're set. Come back and tell us what date you actually close.

@300_mercer
You state: "The lender has had a chance to know themselves out with due deligence and funding requirements" not certain what you are getting at.

That said there are conditions on all loan files that have to be met by the borrower. Depending on the borrower, this can take some time especially with jumbo loans. Also communicating with a lender when a borrower has a question, this alone can take time since a borrower has to leave a message, and hopefully when he gets a callback he will be available to answer the telephone. Until all conditions are met, there can be no clear to close. A borrower's requirement to satisfy conditions has nothing to do with a lenders due deligence. Also the lender may run credit before closing if the credit report has expired. If the fico score has decreased below required guidelines then the interest rate or origination fees may change. This means a change of circumstance has to be generated and sent to the borrower for his signature. This procedure alone takes a few days. If a fico score drops too much then credit repair may have to be done. An appraisal report may have to be re certified if too much time has elapsed. My point being that a lot can happen. Also compliances have become so overwhelming to the point that the loan process itself takes more time.

I have some curiosity about this as well from the seller perspective. If the buyer already has a commitment letter and the board sometimes schedules interviews within a week, what is the best case scenario for rapidity? Also how helpful would it be if the buyer were willing to finance with an institution that has already worked with/ done diligence on the building? Would that be faster than working with the bank that has already given them the commitment? If so by how much?

David, @streetsmart's perspective will be interesting here, but a lot depends on how busy the bank is. If the lending bank has worked in the building recently, then yes, that facilitates a level of approval, but there are multiple levels of approval, and someone, at some point, has to review the file (i.e. human underwriting) and a lot depends on whether that person has ten files on their desk or 100.

Secondly, there's a real issue as to how "clean" the commitment letter is. When I started in real estate, Loan Commitment Letters were subject to only a few conditions, and they were fairly sensible ones (Last-minute verification of employment, say). Now it's possible to get an LCL with 40 conditions on it, half of which involve work that the bank should have already done by that point. As just one example -- is the commitment letter subject to the appraisal being reviewed prior to closing? Because honestly, bankers, you could have done that bit before you issued the loan commitment.

The third big X factor is how available everybody's attorneys (including the bank atty and the co-op attorney) are to show up at a closing.

Given that there's a lot of room for variability here, I'd say the best-case scenario for closing with a completed application that you know is going to the board post-haste is probably around two weeks out.

ali r.
{upstairs realty}

My lenders issue commitment letters before an appraisal is done. They can also do it after an appraisal is done, but issuing it before it's done gives the borrower a chance to look at the conditions to make certain there will be no problems before paying for an appraisal. And by the time the borrower satisfies the conditions the appraisal,review is done.
As far as the time element, a bank may be busy or not so busy, but if a borrower has a question and calls the bank, chances are he will get a voicemail. He leaves a message only to miss the call back. This alone takes time. I make myself available to my clients 24/7 to answer questions and to help facilitate the satisfying of the conditions. Should any problems arise, I have a direct contact to the lender immediately.

Also I can get a commitment letter fully underwritten before a contract is signed, or even before a property is identified. Lenders are doing this to make the lending process much quicker after the contract is signed.

As far as the conditions on loan commitments increasing over time, that is because compliances have increased, anti money laundering provisions that lenders and mortgage brokers must follow have increased. Also lenders after the financial crisis are held accountable for a loan that defaults. Even I am asked the question on my yearly banking report if I arranged any loans that defaulted. So lending is more complicated and it could take longer to close. Many lenders have hired inexperienced originators since after the financial crises they were given a ceiling on how much they can pay their originators. This led to many resigning. A ceiling was also given to lenders as to how much money they can pay a mortgage broker.
It goes on. Jamie Dimon said that Chase spends at least a billion dollars a year to be in compliance with the CFPB.

Ali, the point about the "clean" commitment vs the multiple contingencies letter is going to prove helpful.
Streetsmart, I'm curious: I did know that the process had become more complex post crisis but it's interesting to hear these details.
I've also heard rumors that regulations have very recently been relaxed, perhaps even on here someplace. If that's the case, maybe it won't effect this category of lending?
Thanks to both of you for these outlines.