Between Contract and Closing in Co-ops

Purchases in co-ops must first be approved by the building’s board.

 

In order to be considered, buyers must submit a purchase application that includes tax returns, recommendation letters, financial statements and much, much more. Clients of The Bizzarro Agency work with a dedicated Client Success Manager that compiles and submits their purchase application.

For those financing, the mortgage lender will start by conducting an appraisal and verifying the property’s value. After a successful appraisal the bank will issue a Commitment Letter (thus completing the purchase application).

After reviewing the purchase application, the co-op board will either ask the buyer for an interview or deny their application. Pending board approval, a closing date is set by the attorneys.

Lastly, the buyer conducts a final walkthrough 24 – 48 hours before closing.

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Once Your Offer is Accepted

An “Accepted Offer” is the start of a critical week-long process between buyers and sellers.

 

Because the verbal agreement is not legally binding, lawyers must work as quickly as possible to finalize and execute a contract. The final contract will lay out all the terms of the deal, such as price, contingencies, and anticipated closing date.

The contract cannot be signed, however, before the buyer’s legal representative conducts due diligence. The buyer’s attorney must review and approve the building’s financials, board minutes, offering plan.

Once due diligence and negotiations are complete, the contract is signed by both the buyers and the sellers. The buyer will then be expected to deliver the initial down payment, which the seller’s attorney will hold in escrow pending closing.

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Should You Rent or Buy?

Should you keep renting, or are you ready to become a homeowner?

Consider the following when making a decision:

1. Timeline: It can take three months or more from contract signing until the time you get your keys.

2. The Market is Shifting: Inventory is up and prices are going down. With more choices, it’s the perfect time for first time home buyers to start looking. [UPDATED: THE MARKET HAS SHIFTED AGAIN DUE TO COVID19]

3. Disappearing Opportunities: Prices are at average much lower than Lower Manhattan. However, rezoning and new developments are going to soon change this.

4. Personal Finances: Some co-ops only requiring 10% down, so if you saved up some cash and built your credit, this is the best time to start your home buying process!

Join Simonne Hill, Licensed Real Estate Agent at The Bizzarro Agency, for an important chat on what it means to be a potential first-time homebuyer, below.

 

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