What Buyer Needs to Know for Closing on New Apt

You should check w your attorney

Agreed - a good real estate attorney will sit down with you in advance and should be able to go through all closing costs to the penny.

Your attorney will likely provide you with a list of all costs anticipated at closing and the exact dollar amount of all check to be written. Most follow a very mechanical process the attorneys, agents, and bank representatives know by heart.

The only substantive thing you have left to do is probably the "walk through" of the unit you are buying. This is typically within a day or so of closing. Any ways in which the property does not conform to the way it is supposed to be delivered as set forth in the contract must be noted and conveyed through counsel or agent to the seller asap. If it truly is a problem that needs to be cured, the seller usually will do so very quickly so the closing goes through. Usually here we are talking about a dishwasher that is discovered to not operate; an a/c unit that was to be left but has been removed; damage to the apartment from the seller's move-out that must be repaired (walls gouged, floors seriously damaged); furnishings left behind that should be removed; "broom clean" conditions not met." Otherwise, relax. The hard part is over for you. Just get your pen ready.

If you have a lousy lawyer, I take back everything I said. Make sure you have one who knows what s/he is doing.

I found it helpful to create an Excel spreadsheet and itemize the costs as I learned about them. Plus your attorney isn't going to know how much your estimated moving expenses are and that is an expense you don't want to lose track of when dealing with all the technical and financial components of the purchase. There were problems with the final calculation of closing costs that I received a few days before closing, a number was transposed, but it was easily fixed once discovered. However, if I hadn't been keeping close track of the numbers, I probably would have missed it.

Items tracked:

Co-op lien search payable to third-party service
Non-refundable processing fee for co-op application payable to managing agent
Credit check fee payable to managing agent
Refundable move-out bond
Refundable move-in bond
Non-refundable application fee for loan
Processing fee
Underwriting fee
Interim interest (until end of the month)
Bank legal fee/NY attorney
Maintenance until end of the month
UCC-1 filing fee

Inspection fee
Lawyer fee

Movers fee
Moving supplies
Tip for movers
Tip for superintendent at new building
Tips for porters at old building

This is a good idea for a blog post, and I will someday write one in your honor.

However, the short version is that basically lenders are getting killed funding mortgages, so one of the steps they take to protect themselves is to release the money at the last possible moment.

So, three days before closing, you should get a GFE -- a good faith estimate -- of closing costs, which will be only about 80% in sync with reality, because the bank will recalculate at the last possible moment.

A day before closing, you should walk through the property with a friend. It should be vacant and empty (the traditional contract language is "broom-clean") and the appliances should work. You are looking for the presence of significant parts (like does it have the closets I was promised? Does it have a floor?) and generally should not worry about minor dings.

On the morning of closing (or, more typical these days, at the closing) your attorney should let you know what checks you need to write. You generally go to your bank and get bank or certified checks issued -- more and more, as these turn out to be only estimates, you fill in the holes with small personal checks, or attorney checks. Also, you will be signing your name about a thousand times, so bring a pen you like. And to make sure you're you, the closing attorneys will need to see a photo ID, like a driver's license or a passport.

The basic purpose of closing is for the seller to pay off their existing mortgage (if there is one) and thus clear their property for sale, and for you to then pay the seller for their property, receiving the property. You will usually pay with a combination of down payment check and mortgage financing, and you will usually receive a certificate of shares and proprietary lease (in the case of a co-op) or a deed (in the case of a house or condo).

There are taxes that get paid on these transactions as they are being done.

As these transactions happen, someone -- usually the bank's attorney -- is paying attention to them, and recording various credits and debits on a form that we call the HUD-1. If you are confused during closing, the easiest thing to do is to have your attorney walk you through the HUD-1 and what it looks like, since it is the master piece of paper that guides everyone.

If you are working with a broker, the broker can do this too. As part of closing the broker's firm will receive a commission check, and a good broker will press the keys of your new apartment into your hand even as he/she takes the check with the other.

I hope that helps a little. Enjoy your new place!

ali r.
{downtown broker}

Many here have focused on the closing costs, and the 24 hrs up to the closing - both prime coniderations. I'll mention some of the key activities in that roughly 90 day time period from Accepted Offer to close that I focus on. I come at this from the perspective of a buyer's agent, and as someone whose niche is Co-op resales, often for the first-time buyer.

I frequently say that a buyer's agent's responsibility is not just showing and negotiating, but managing the transaction to a successful close. Things I watch include:

- During the roughly two week timeframe from Accepted Offer to close, stay in touch with the listing agent to make sure that he / she knows that everything is proceeding well and on track. The last thing I want is for the listing agent to think that the buyer is less than eager to move expeditiously.

- Arrange to have financials, offering plan, and proprietary lease forwarded to buyer's attorney.

- Review the executed contracts to verify that everything on my "deal" sheet, e.g., what stays, is reflected in the contract.

- Prepare the Co-op Board package as expeditiously as possible, being mindful of any "day of the month" Board cut-offs for acceptance of package.

- Ensure that buyer clients have been adequately prepared for the Board interview

- Schedule and attend the appraisal.

- Assist in getting all required building documentation to lender - financials, Master Cerificate of Insurance, Co-op Questionnaire, amendments, etc.

- Perhaps MOST important - ensure that buyer is on top of his / her mortgage rate lock and commitment timeframes, and take appropriate action if things seem to be "slipping".

Correction: During the roughly two week timeframe from Accepted Offer to EXECUTED CONTRACT.

Correction: During the roughly two week timeframe from Accepted Offer to EXECUTED CONTRACT.

I can tell you from looking at John's list that it represents extreme attention to detail. It's a rare buyer's broker who shows up at the appraisal.

ali r.
[downtown broker}