Unlike Cooperatives (Co-ops) a Condominium (Condo) is real property and is similar to buying a house in the suburbs. You will directly be responsible for all real estate taxes associated with your unit.
A Condo is controlled by its Board of Managers which has significantly less control than the Board of Directors of a Co-op. Typically the Board of Managers need not approve a potential sale of a unit. Their only recourse would be to exercise their right of first refusal and purchase the unit themselves. This rarely happens. The board is usually composed of current residents or in some cases still controlled by the sponsor or an investor. The Board of Managers make all of the major decisions about the operations of the building and the rules which tenants must follow.
If you plan on financing your purchase we recommend you seek a pre-approval for financing before starting your search for a property. Once you have identified the Co-op you want to purchase and your real estate broker has submitted an offer, it will now be the time to call a real estate attorney (212.265.4900).
Assuming you have already called and hired us we will start our Due Diligence. We start by reviewing the Offering Plan and its Amendments. The Offering Plan, which can be as large as the phone book, address disclosures of any property defects; building description; board and sponsor; purchasing and operating procedures; parties’ rights and obligations, etc. The older the offering plan the less relevant it will be, however it is still critical that we review it.
Once we receive the Contract of Sale from the Seller’s attorney we will confirm all of the information and negotiate the contract on your behalf. Once the negotiation is finished and we have gone over our due diligence with you, you will sign the Contract. The Contract, along with your down payment check (typically 10% of the purchase price), is then sent to the Seller’s attorney for the Seller’s signature. Once the Sellers have signed and the down payment check has been deposited into the Seller’s attorney’s escrow account you are “In Contract”. Your Contract will probably have an on or about closing date, however in New York, a reasonable period generally accepted to be around 30 days, is given to both parties to close.
Once you are “In Contract” we order a Title Search from an abstract company. The Title report will disclose all land records against the property including all previously recorded deeds (the deed chain), mortgages, judgments against the seller, easements, and other liens affecting the property. The Title report will also contain “municipal searches” which include search results from the department of buildings violations records, real estate taxes paid and unpaid, water and sewer payments made or not made, emergency repairs done by the city and so on. The title report will also contain a federal and state tax lien search as well as a bankruptcy search, so you can be sure that the seller can convey the real estate.
Once we receive the report, depending on what is in it, we will work with the abstract company and Seller’s attorney to clear any issues.
If you will be financing the purchase, once In-Contract, you will work with your mortgage representative to obtain your loan. It is important to remember that if you do not have a mortgage contingency your inability to obtain financing will not let you cancel the Contract of Sale. If you do have a mortgage contingency clause, typically 30-45 days from the “contract date”, and are unable to secure financing, you can cancel the Contract of Sale and receive your down payment back. The loan commitment letter will be issued with a few conditions that you will need to satisfy prior to closing. Typically once the loan commitment letter has been issued by the lender your contingency period expires. If you are unable to obtain a loan commitment letter in the contingency period you will be able to terminate the contract (a seller may grant you an extension of the contingency period).
At the same time you are working with your mortgage broker you will be working with your real estate broker preparing the board package. As mentioned above the Board of Managers has significantly less control than the Board of Directors of a coop. Typically the Board of Managers need not approve a potential sale of a unit. Their only recourse would be to exercise their right of first refusal and purchase the unit themselves. This rarely happens.
Once you have satisfied all of your loan conditions and obtained a clear to close from the lender and have gotten board approval it is time to schedule the closing. We will work with the Seller’s attorney and Lender’s attorney and managing agent (if there is one) to schedule a mutually agreeable time.
Prior to closing you and your real estate broker will schedule an inspection of the unit. During this inspection you should turn on all light switches and appliances and check the windows and walls for any damage that was not there when you signed the contract.
Prior to closing we will send you a statement that will show guide you through all the steps of the closing from what documents you will need to bring to what checks will need to be written.
Once closing day comes around we will explain all of the relevant documents to you prior to signing them. After closing you will receive a binder from us containing all of the relevant documents from the transaction.
You then get to live happily ever after in your new condo until of course it is time to sell and buy a new property. When that time comes we hope you will give us a call again.
A Condo is controlled by its Board of Managers which has significantly less control than the Board of Directors of a Co-op. Typically the Board of Managers need not approve a potential sale of a unit. Their only recourse would be to exercise their right of first refusal and purchase the unit themselves. This rarely happens. The board is usually composed of current residents or in some cases still controlled by the sponsor or an investor. The Board of Managers make all of the major decisions about the operations of the building and the rules which tenants must follow.
If you plan on financing your purchase we recommend you seek a pre-approval for financing before starting your search for a property. Once you have identified the Co-op you want to purchase and your real estate broker has submitted an offer, it will now be the time to call a real estate attorney (212.265.4900).
Assuming you have already called and hired us we will start our Due Diligence. We start by reviewing the Offering Plan and its Amendments. The Offering Plan, which can be as large as the phone book, address disclosures of any property defects; building description; board and sponsor; purchasing and operating procedures; parties’ rights and obligations, etc. The older the offering plan the less relevant it will be, however it is still critical that we review it.
Once we receive the Contract of Sale from the Seller’s attorney we will confirm all of the information and negotiate the contract on your behalf. Once the negotiation is finished and we have gone over our due diligence with you, you will sign the Contract. The Contract, along with your down payment check (typically 10% of the purchase price), is then sent to the Seller’s attorney for the Seller’s signature. Once the Sellers have signed and the down payment check has been deposited into the Seller’s attorney’s escrow account you are “In Contract”. Your Contract will probably have an on or about closing date, however in New York, a reasonable period generally accepted to be around 30 days, is given to both parties to close.
Once you are “In Contract” we order a Title Search from an abstract company. The Title report will disclose all land records against the property including all previously recorded deeds (the deed chain), mortgages, judgments against the seller, easements, and other liens affecting the property. The Title report will also contain “municipal searches” which include search results from the department of buildings violations records, real estate taxes paid and unpaid, water and sewer payments made or not made, emergency repairs done by the city and so on. The title report will also contain a federal and state tax lien search as well as a bankruptcy search, so you can be sure that the seller can convey the real estate.
Once we receive the report, depending on what is in it, we will work with the abstract company and Seller’s attorney to clear any issues.
If you will be financing the purchase, once In-Contract, you will work with your mortgage representative to obtain your loan. It is important to remember that if you do not have a mortgage contingency your inability to obtain financing will not let you cancel the Contract of Sale. If you do have a mortgage contingency clause, typically 30-45 days from the “contract date”, and are unable to secure financing, you can cancel the Contract of Sale and receive your down payment back. The loan commitment letter will be issued with a few conditions that you will need to satisfy prior to closing. Typically once the loan commitment letter has been issued by the lender your contingency period expires. If you are unable to obtain a loan commitment letter in the contingency period you will be able to terminate the contract (a seller may grant you an extension of the contingency period).
At the same time you are working with your mortgage broker you will be working with your real estate broker preparing the board package. As mentioned above the Board of Managers has significantly less control than the Board of Directors of a coop. Typically the Board of Managers need not approve a potential sale of a unit. Their only recourse would be to exercise their right of first refusal and purchase the unit themselves. This rarely happens.
Once you have satisfied all of your loan conditions and obtained a clear to close from the lender and have gotten board approval it is time to schedule the closing. We will work with the Seller’s attorney and Lender’s attorney and managing agent (if there is one) to schedule a mutually agreeable time.
Prior to closing you and your real estate broker will schedule an inspection of the unit. During this inspection you should turn on all light switches and appliances and check the windows and walls for any damage that was not there when you signed the contract.
Prior to closing we will send you a statement that will show guide you through all the steps of the closing from what documents you will need to bring to what checks will need to be written.
Once closing day comes around we will explain all of the relevant documents to you prior to signing them. After closing you will receive a binder from us containing all of the relevant documents from the transaction.
You then get to live happily ever after in your new condo until of course it is time to sell and buy a new property. When that time comes we hope you will give us a call again.