How much time is there between offer and closing in New York City real estate?
We’ll demystify this topic in the following video, I'm Nick at Hauseit. Visit our website
www.hauseit.com to save money when buying or selling real estate here in New York City,
so let's get started.
A general estimate for how much time there is between offer and closing in New York City
real estate is 3 months.
However, the timeline from an initial offer to closing on a real estate deal varies greatly
on a number of factors.
These variables include the property type such as a condo versus co-op, whether you're
taking out a mortgage or paying all cash, how extensive the building's board application
is, how quick the building and the board process your application and the general responsiveness
of the seller and both real estate lawyers on the transaction.
Here are the steps from offer submission to closing.
Making an initial offer, submitting an initial offer is a relatively straightforward process
assuming you've prepared your offer documentation in advance.
The offer process itself starts with your buyer’s broker reviewing your offer terms
and documentation with you.
Your buyer's agent will usually have a call with a listing agent and prepare some pricing
thoughts on the property to help you formulate a negotiation strategy.
The offer itself and supporting documentation is typically emailed to the listing agent.
It can take anywhere from a day to a few weeks from the time of your initial offer to having
an accepted offer.
How long this process takes depends on a number of factors including the amount of buyer competition
and the responsiveness and demeanor of the seller.
Accepting an offer.
Once you've accepted an offer, the listing agent will circulate a deal sheet to both
real estate attorneys and the buyer's broker.
The deal sheet is a non-binding summary of the terms you've negotiated on the deal and
the purpose of the deal sheet is to give the attorneys enough information to begin the
next steps of the process.
And these steps include the drafting of a contract by the sellers attorney and the commencement
of due diligence by the purchaser's lawyer.
Once the deal sheet has been circulated, the listing agent will usually provide the buyer's
attorney with the requisite due diligence documentation.
These documents include the offering plan and the building financials in the case of
a condo or co-op.
The buyer’s attorney may also review the board minutes, house rules and the purchase
application and finally the buyer’s attorney will usually send the building's managing
agent a due diligence questionnaire for completion.
Contract review.
From the time the deal sheet is circulated, it usually takes the seller's attorney 1 to
3 business days to prepare and send an initial draft of the real estate contract and writer
to the buyer's attorney.
The length of the contract review period can take anywhere from a few days to a few weeks.
On average, it typically takes around 2 weeks to have a fully executed sale contract from
the time the deal sheet is circulated.
Buyer due diligence.
Buyer due diligence is handled in parallel with contract negotiations.
This means that due diligence itself usually does not delay the buyers ability to sign
a contract.
The most common delay in completion of due diligence results from the seller or listing
agent failing to provide a copy of the offering plan to the buyer's attorney in a timely manner.
Buyer due diligence is also frequently delayed in the case of buildings which do not have
digital versions of the minutes for board meetings.
In this case, the buyer's attorney needs to make an appointment to physically go to the
buildings managing agent in order to review the building's minutes and this complex coordination
can often add a few days to a week or more to the timeline.
Mortgage application.
It usually takes around 4 weeks to receive a mortgage commitment letter from the time
you submit a completed application to your lender.
How long it takes to receive a commitment letter?
It depends on how busy the lender is with other applications.
Furthermore, if interest rates are low there may be a lot of refinancing applications which
would put you further down on the list in terms of the timeline.
Board application.
The board application and co-op interview process typically take 4 to 6 weeks from the
time the application is submitted.
Most condos also have an application process but there's no interview and condos typically
have a maximum of 20 to 30 days from the time the application is submitted in order to approve
the purchase.
Co-ops have no such timeline or limitation for condos the approval is also known as issuing
the waiver of the right of first refusal.
Closing.
Closing is usually scheduled within 2 weeks of the time you receive co-op board approval
or the condo issues its waiver of right of first refusal assuming your bank is ready
to close.
So, there you have it, we hope you found this video helpful I'm Nick at Hauseit.
Visit our website www.hauseit.com to learn about ways to save money when buying or selling
real estate here in New York City.
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