The Carlton Guide for Buyers
Because the New York City real estate market is so competitive, it’s important to take prompt action after finding a property that you want to buy. The following guide will provide a detailed overview of what you need to know about each stage of this process.
How to Bid and Negotiate
- This process begins when you submit your bid. The offer you make can be done in writing or orally. It’s standard for your agent to take care of submitting your offer. They will also include information about your qualifications as a buyer.
- Since the flip tax can come up during negotiations, find out early on if this tax will be applicable.
- While some sellers will accept the first offer they receive, it’s common for sellers to respond with a counteroffer.
- If the seller receives multiple bids for their property, you will need to work with your agent to create your “best and final” offer.
- If the seller accepts one of your offers, you will have a firm agreement for the sale’s price, specific terms and date of closing.
- Prior to moving forward, it’s important to enlist the services of an experienced New York City real estate attorney.
The Contract Process
- After the seller accepts your offer, your real estate attorney will begin the due diligence process.
- Documentation regarding the building’s financial condition, bylaws and the offering plan are all items that will be obtained during the due diligence process.
- Upon review and approval by your attorney in regards to all the documentation obtained during due diligence, you will be prepared to sign the sale contract. When you sign the contract, it’s standard procedure to provide a 10% deposit.
- The deposit does not go to the seller. Instead, it is held by the seller’s attorney in an escrow account.
- After receiving the contract and your deposit, the seller will also sign. The deposit will remain in the escrow account until closing.
Securing Board Approval
- Before you move to closing, you need to receive board approval for your purchase. Although this stage in the process can be stressful, your Carlton Residential agent will help you with everything that needs to be done.
- Be prepared to supply a significant amount of documentation. Tax returns, bank statements, letters of reference and signed financial statements are all common examples of documentation that a board will want to see.
- Once you and your agent have compiled all the necessary documentation, it will be sent to the seller’s agent. After the seller’s agent has an opportunity to review it, the documentation package will be sent to the building’s board.
- It’s normal for a board to request additional information from a buyer. Upon supplying this information and barring being turned down by the board or co-op, you will be asked for an interview.
- In many cases, it may take some time for your interview to be scheduled. But once you complete the interview, it usually only takes a few days to receive approval from the board.
What to Expect at Closing
- After you receive approval from the board, you will move to the last stage in the buying process. The standard location for a closing is in the office of the managing agent of the building.
- Closing requires the seller, attorneys, managing agent, you and any banks involved to be present. Since all parties need to be present, it may take up to thirty days after the official closing date for everyone to be able to come together in the same office.
- Prior to the closing, your Carlton Residential agent will schedule a final inspection of the property. This inspection is the best way to ensure that everything is in the order you expect.
- Closing does involve numerous fees. While the exact fees will vary based on whether the property is a co-op, condominium or townhouse, there are standard fees that go along with every closing.
- Some of the standard fees (amounts shown are the minimum you can expect to pay) involved in a closing include the buyer’s attorney ($2,500), bank fees ($2,500), mansion tax (1% on properties over $1 million) and managing agent ($750).
- Prior to signing any contracts or other forms of documentation, make sure to review all applicable fees with your attorney.