Cooperative
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Contract Negotiation and Due Diligence
- Your need for an attorney arises once your offer has been accepted. However, you should probably have one lined up before you put in the offer.
- I receive a transaction summary sheet detailing the specifics of the transaction
- I immediately begin my due diligence process which involves a full investigation of the cooperative corporation, building finances, building condition, and unit condition
- I am simultaneously negotiating the contract of sale with the seller’s attorney and looking to obtain as many additional protections and seller representations for you as possible
- Once the contract has been fully negotiated and we have thoroughly discussed my due diligence findings, you will sign the contract and send me a copy along with your contract deposit for 10% of the purchase price
- The seller then countersigns and sends me the fully executed contract of sale along with notification that your 10% has been deposited into the seller’s attorney’s escrow account, where it is held and applied towards your funds for closing
- The day that I receive the fully executed contract of sale is the date of the contract
Financing (if applicable)
- Once we have a fully executed contract of sale you will need to work closely with your mortgage representative to fulfill your lender’s documentary requirements
- It is very important that all parties understand the need for flexibility during this process since New York closing dates are not set in stone and afford both parties the opportunity to delay by 30 days from the “on or about” contract date (consider this before locking in your rate)
- One of the most important documents that are generated from the financing process is the loan commitment letter, which is issued by the lender after they have reviewed your documentation, run your credit, and ultimately agree to fund the loan, subject to some additional conditions and requirements
- If your transaction is NOT contingent on financing, you are still bound by the terms of the contract of sale and are required to close even if your lender does not issue you a loan commitment letter
- If your transaction IS contingent on financing, you will have approximately 30-45 days to submit all necessary documentation to your lender and obtain a loan commitment letter. If you are unable to secure a loan commitment letter within the allotted time period, and you have made a good faith application, you will have the option of either canceling the contract and recovering your 10% contract deposit or requesting an extension of time to secure the loan commitment letter.
- Upon receiving your loan commitment letter you are officially bound by the contract of sale, even if you are unable to meet your lender’s additional conditions and requirements
Post-Loan Commitment (and the Lender’s Attorney)
- After receiving your loan commitment letter you will be contacted by your lender’s attorney and mailed the following documents to be returned upon execution:
- UCC-1 Authorization Form, which allows your lender to officially “register” the loan; and
- Cooperative Recognition Agreement, or Aztecs, which is an agreement between the the coop and your lender and outlines each party’s responsibilities and obligations towards the other
- Your lender will also require you to order a lien search/coop search report (a report that investigates and discloses any and all existing liens against the building and unit). You can have me or your lender’s attorney place the order.
The Coop Board Application
- The next step in the coop process is the coop board application, which can be obtained from your realtor or the building’s managing agent. You can technically begin working on this application once we have a fully executed contract of sale.
- If you are not seeking financing, the coop board application must be submitted within 10 to 20 business days of the fully executed contract of sale
- If you are seeking financing, the coop board application must traditionally be submitted within 3 business days of receiving your loan commitment letter
- Although a bit invasive, you must provide all information requested by the coop board in good faith. In the event that the coop board rejects your application, you will be able to cancel the contract of sale and recover your full 10% contract deposit.
Pre-closing
- You will need to have a homeowner’s insurance policy in place as of the date of closing. This will be a condition to funding if you are financing.
- If you are financing, the closing can be scheduled only once the coop board has met with you in person and approved the sale, and your lender has deemed the loan “clear to close”
- If you are not financing, the the closing can be scheduled immediately after the coop board has met with you in person and approved the sale
- This whole process can take anywhere from a few weeks to a few months if you are financing
- Once you have been approved by the coop board and, if financing, you are clear to close, I begin working with the coop’s managing agent and seller’s attorney to compile a list of fees that you will be paying at closing. I also work with your lender’s attorney to obtain the net proceeds, or the amount that your lender actually gives you at closing after they have collected underwriting and processing fees, appraisal fees, bank attorney fees, and mortgage interest. I can provide you with a preliminary closing statement and check request only once all parties provide me with these numbers.
The Closing
- As you get closer to the finish line, you will schedule a final walkthrough of your unit to confirm that it is in the condition contemplated by the contract, that all appliances are in working order, and that the electric and plumbing are functional
- You will have the option of attending in person or executing a power of attorney so that I, or anyone else who you appoint, can close on your behalf. The whole closing normally lasts anywhere from 2-3 hours and takes place in the office of the coop’s managing agent. At the end, you will happily walk away with the keys to your new home!
- After all is said and done, I will send you a copy of all pertinent documents from the transaction
Condominium
****
Contract Negotiation and Due Diligence
- Your need for an attorney arises once your offer has been accepted. However, you should probably have one lined up before you put in the offer.
- I receive a transaction summary sheet detailing the specifics of the transaction
- I immediately begin my due diligence process which involves a full investigation of the condominium, building finances, building condition, and unit condition
- I am simultaneously negotiating the contract of sale with the seller’s attorney and looking to obtain as many additional protections and seller representations for you as possible
- Once the contract has been fully negotiated and we have thoroughly discussed my due diligence findings, you will sign the contract and send me a copy along with your contract deposit for 10% of the purchase price
- The seller then countersigns and sends me the fully executed contract of sale along with notification that your 10% has been deposited into the seller’s attorney’s escrow account, where it is held and applied towards your funds for closing
- The day that I receive the fully executed contract of sale is the date of the contract
Financing (if applicable)
- Once we have a fully executed contract of sale you will need to work closely with your mortgage representative to fulfill your lender’s documentary requirements
- It is very important that all parties understand the need for flexibility during this process since New York closing dates are not set in stone and afford both parties the opportunity to delay by 30 days from the “on or about” contract date (consider this before locking in your rate)
- One of the most important documents that are generated from the financing process is the loan commitment letter, which is issued by the lender after they have reviewed your documentation, run your credit, and ultimately agree to fund the loan, subject to some additional conditions and requirements
- If your transaction is NOT contingent on financing, you are still bound by the terms of the contract of sale and are required to close even if your lender does not issue you a loan commitment letter
- If your transaction IS contingent on financing, you will have approximately 30-45 days to submit all necessary documentation to your lender and obtain a loan commitment letter and submit a completed condo board waiver application. If you are unable to secure a loan commitment letter within the allotted time period, and you have made a good faith application, you will have the option of either canceling the contract and recovering your 10% contract deposit or requesting an extension of time to secure the loan commitment letter.
- Upon receiving your loan commitment letter you are officially bound by the contract of sale, even if you are unable to meet your lender’s additional conditions and requirements
The Title Report and Title Insurance
- Once we have a fully executed contract of sale, I will order a title report on your behalf, from a qualified New York title company
- The title company conducts a thorough search to ensure that the deed is not “clouded” by outstanding liens, mortgages, judgments, or other potential issues
- Once the title company is satisfied that you can receive clean title from the seller, you will be able to purchase an owner’s policy, which is usually issued in the amount of the sales price. It is purchased for a one-time fee at closing and is valid for as long as the owner or his/her heirs have an interest in the property. Title insurance protects real estate owners and lenders against any property loss or damage they might experience because of defects such as another person claiming an ownership interest, improperly recorded documents, fraud, forgery, liens, encroachments, easements and other items that are specified in the insurance policy.
- If the seller cannot produce clean title, or deed, you may be able to delay the closing until all issues are cleared up, or, in some circumstances, even cancel the contract and recover your 10% contract deposit
The Condo Board Application
- The next step in the process is the condo board application, which can be obtained from your realtor or the building’s managing agent. You can technically begin working on this application once we have a fully executed contract of sale.
- Unlike a coop board, the condo board does not approve or reject the sale. Rather, the condo board either issues a waiver of its right of first refusal, or its right to purchase the unit, or exercises the right and purchases the unit from the seller for the contract price. In the event that this occurs, you will recover your full 10% contract deposit.
Pre-closing
- You will need to have a homeowner’s insurance policy in place as of the date of closing. This will be a condition to funding if you are financing.
- If you are financing, the closing can be scheduled only once the condo board has issued the waiver of its right of first refusal and approved the sale, and your lender has deemed the loan “clear to close”
- If you are not financing, the the closing can be scheduled immediately after the condo board has issued its waiver of their right of first refusal and approved the sale
- This whole process can take anywhere from a few weeks to a few months if you are financing
- Once the condo board has approved the sale and, if financing, you are clear to close, I begin working with the condo’s managing agent and seller’s attorney to compile a list of fees that you will be paying at closing. I also work with your lender’s attorney to obtain the net proceeds, or the amount that your lender actually gives you at closing after they have collected underwriting and processing fees, appraisal fees, bank attorney fees, and mortgage interest. I can provide you with a preliminary closing statement and check request only once all parties provide me with these numbers.
The Closing
- As you get closer to the finish line, you will schedule a final walkthrough of your unit to confirm that it is in the condition contemplated by the contract, that all appliances are in working order, and that the electric and plumbing are functional
- You will have the option of attending in person or executing a power of attorney so that I, or anyone else who you appoint, can close on your behalf. The whole closing normally lasts anywhere from 2-3 hours and traditionally takes place in the seller’s attorney’s office. At the end, you will happily walk away with the keys to your new home!
- After all is said and done, I will send you a copy of all pertinent documents from the transaction
The Sale
Cooperative
****
Contract Negotiation
- Your need for an attorney arises once you have accepted an offer for the sale of your unit. However, you should probably have one lined up before accepting an offer.
- I receive a transaction summary sheet detailing the specifics of the transaction and immediately begin preparing a contract of sale, sending it out to the purchaser’s attorney on the same day. My goal is always to limit your representations to the extent possible.
- Once the contract has been fully negotiated, the purchaser will sign the contract and send me a copy along with their contract deposit for 10% of the purchase price
- You will then countersign and send me a copy of the contract so that I may sign as the escrow agent. A fully executed contract of sale is then sent back to the purchaser’s attorney along with notification that the 10% has been deposited into my attorney escrow account, where it is held and disbursed to you at closing.
- The day that the purchaser’s attorney receives the fully executed contract of sale is the date of the contract
Payoff (if applicable)
- If you currently have a mortgage on your property, I will work with your lender to obtain a payoff quote and make sure that your stock certificate and proprietary lease are brought to the closing
- If you do not have a mortgage, then you must make sure to locate your original stock certificate and proprietary lease and bring them to the closing
Pre-closing
- The purchaser will order a lien search to determine if there are any existing liens against the building and unit. If any, I will work with you to have everything cured.
- If the purchaser is financing, the closing can be scheduled only once the coop board has met with the purchaser in person and approved the sale, and their lender has deemed the loan “clear to close”
- If the purchaser is not financing, the closing can be scheduled immediately after the coop board has met with the purchaser and approved the sale
- This whole process can take anywhere from a few weeks to a few months if the purchaser is financing
- Once the purchaser has been approved by the coop board and, if financing, they are clear to close, I begin working with the coop’s managing agent, your lender’s attorney to coordinate the payoff (if any), the realtors, and the coop’s attorney to compile a list of fees that you will be paying at closing. These fees include transfer taxes, flip tax, and other transfer fees that may be due to the respective attorneys and the coop. I can provide you with a preliminary closing statement only once all parties provide me with these numbers. All of these fees can be paid from the purchaser’s 10% contract deposit in my attorney escrow account.
The Closing
- You will have the option of attending in person or executing a power of attorney so that I, or anyone else who you appoint, can close on your behalf. The whole closing normally lasts anywhere from 2-3 hours and takes place in the office of the coop’s managing agent. At the end, you will happily walk away with the proceeds of your sale!
- After all is said and done, I will send you a copy of all pertinent documents from the transaction
Condominium
****
Contract Negotiation
- Your need for an attorney arises once you have accepted an offer for the sale of your unit. However, you should probably have one lined up before accepting an offer.
- I receive a transaction summary sheet detailing the specifics of the transaction and immediately begin preparing a contract of sale, sending it out to the purchaser’s attorney on the same day. My goal is always to limit your representations to the extent possible.
- Once the contract has been fully negotiated, the purchaser will sign the contract and send me a copy along with their contract deposit for 10% of the purchase price
- You will then countersign and send me a copy of the contract so that I may sign as the escrow agent. A fully executed contract of sale is then sent back to the purchaser’s attorney along with notification that the 10% has been deposited into my attorney escrow account, where it is held and disbursed to you at closing.
- The day that the purchaser’s attorney receives the fully executed contract of sale is the date of the contract
Payoff (if applicable)
- If you currently have a mortgage on your property, I will work with your lender to obtain a payoff quote
- The title company will handle the payoff at the closing
Pre-closing
- The purchaser will order a title report to determine if there are any outstanding liens, mortgages, judgments, or other potential issues with title. If any, I will work with you to resolve everything.
- If the purchaser is financing, the closing can be scheduled only once the condo board has waived its right of first refusal, and the purchaser’s lender has deemed the loan “clear to close”
- If the purchaser is not financing, the closing can be scheduled immediately after the condo board has waived its right of first refusal
- This whole process can take anywhere from a few weeks to a few months if the purchaser is financing. Believe it or not, it is possible to get to the closing table in two weeks or less if the transaction is all cash and all parties cooperate.
- Once the condo board has waived its right of first refusal and, if financing, the purchaser’s lender is clear to close, I begin working with the condo’s managing agent, the realtors, and the title company to compile a list of fees that you will be paying at closing. These fees include transfer taxes, flip tax (becoming more common in condos), and broker fees. I can provide you with a preliminary closing statement only once all parties provide me with these numbers. All of these fees can be paid from the purchaser’s 10% contract deposit in my attorney escrow account.
The Closing
- You will have the option of attending in person or executing a power of attorney so that I, or anyone else who you appoint, can close on your behalf. The whole closing normally lasts anywhere from 2-3 hours and can take place at a number of different locations. At the end, you will happily walk away with the proceeds of your sale!
- After all is said and done, I will send you a copy of all pertinent documents from the transaction
And what about closing costs?