So how long are we talking for this whole transaction, start to close?
I literally love nothing more than meeting with a buyer, green to sales in New York, who thinks all transactions are carried out like Old Western drug trades. They pick the property, then an hour later show up to some bootleg attorney’s office where across a dusty old table in the back, they swap a bag of money for a bag of keys and call it a day.
Yet in a way, many transactions do end up looking scarily similar to this Western photo of my family (+ best friend Elena) back in 2011:
^ Quite literally me and my buyers midway through most coop transactions
In repeating my over used “purchasing in New York is different from everywhere where else in the country”, the timelines here vary for what type of property you’re purchasing, if you’re financing, and what time of year you’re buying. In addition, no matter what timeline it is you’ve been prescribed to, you must account for roadblocks along the way. Unless you’ve paid some dark magic ritualist to shield you from all mishaps, like the Rainbow Road level in Mario Kart, there is always some curmudgeonly managing agent waiting to fire a spiny blue shell your way and knock you off course.
While I sadly can’t tell you how long you’ll be forced to continue to cook all your meals for, let’s go over the timeline of different real estate transactions in New York City:
In timing out the normal transaction in NYC, let’s start at the very inception. The first basic steps in purchasing include retaining an attorney, getting pre-approved by a lending institution (if financing), filling out the REBNY financial statement, and setting your search parameters. Once you have all of that squared away, it’s time to hit the ground running and see properties. This aforementioned process can take a varying amount of time, depending on how quickly you need or are able to purchase, and how emotionally and financially ready you are to pull the trigger. At the point where you make a proper offer on a home, the timeline becomes much more predictable, as in most cases it takes an average of 60-120 days from preparation of the offer to the closing table.
For the most basic glimpse, this is roughly what happens:
|Prepare the offer||1-2 days|
|Negotiate the offer, leading to an accepted offer||2-7 days|
|Negotiate the contract & due diligence||1-2 weeks|
|Loan application, appraisal, loanapproval, and commitment letter||2-4 weeks|
|Co-op board package andinterview/Condo package (sans interview)||4-7 weeks|
|Banks and attorneys prepare for closing||1-2 weeks|
|Final walk through||Day of closing|
|Transaction closing||3 hours|
Now this is not unanimous across the board. Here are the big hitters to consider when mapping our your timeline for purchasing:
1. Financing vs. All-Cash
If you are purchasing all-cash, you’ll save yourself about 2-4 weeks during which your bank would’ve been working to approve the loan. Also when it comes to closing, you may also expedite the process between approval and closing table as there’s one less cook in the kitchen (being there’s no bank). If you’re financing, the 2-4 weeks is fairly routine, but I’ve seen that inch up to 5 weeks due to hold ups within the bank. Please note: this time frame between signed contracts and submitting your board package is when you work on your board package. So individuals who are financing can do so at a bit more of a relaxed pace, while all-cash buyers need to jump right in and finish up their package in 7-10 business days.
2. Condos vs. Coops vs. New Development
So starting with the fastest transaction, New Developments tend to be lightning quick transactions if the building doesn’t face hiccups via the Department of Buildings. Negotiations are fairly quick because sponsors tend to be more willing to make deals happen. Since there is no existing board, you don’t have to worry about a board package so right away once you have financing (or all-cash, once you have a fully executed contract), you’re cleared to close pending the building has its Certificate of Occupancy.
Condos will require all the steps in the graph above, however since Condos are a more laid back form of ownership, things move more quickly and the board can only turn down an applicant by the right of first refusal. There are no interviews for Condos and the board package tends to be much easier than Coops. Because you cut out the interview and added scrutiny of the package, these transactions moves about one month faster than Coops.
Coops are the slowest transaction, due to high scrutiny of the board package and also the beloved Coop Board Interview. The Coop will take their sweet time with your package, so you should air on the side of caution for time allocated for processing. They’ll give you an interview at a time that is convenient for them so it could be a week later or a month later. You cannot refute the date or ask for one – they hold the power here and can deny you for any reason, undisclosed. I always have buyers allocate a bit more time to their anticipated close date if they go the coop route simply because these transactions tend to drag and you’re at the mercy of the board with no personal power to hasten the speed of things.
3. Seasonality affects
So you must keep in mind that there are a few periods during the year when things slow down a bit. If you’re a New York resident, you know that the majority of New York leaves in the summer time – this will lead to slower turn around with managing agents and boards members. The other time to consider is the holiday season. Starting before Thanksgiving and going through the New Year, things will begin to quiet until deal progress is moving at a glacial pace over the week of Christmas. If either of these periods coincide with your purchase, just factor in a bit of lag time to accommodate for delays.
4. If the seller wants post-closing possession
Typically upon closing, the apartment is delivered empty and the keys are handed over once closing is complete so the owners have control immediately. Rarely do sellers want possession post-closing, however if the place their moving into won’t be ready for a few months later, it’s something they may ask for. You’ll know this prior to making an offer and you won’t sign a contract without full disclosure but just something to ask at the onset!