Buyer Resources
Tips for Potential Buyers
Credit Report
Check your credit score at least once a year at annualcreditreport.com to ensure it is up-to-date and there are no erroneous claims or accounts. If there are any issues, now is the time to connect with a credit repair agency. Wondering how to find a credit repair agency? We have a list of trusted agencies to help you.
Financial Check-up
This is a gut-check for your finances. Pull together a full list of all your assets and liabilities so you can get the big picture of your financial health. We have a great spreadsheet template we would be happy to send you—just ask!
Debt
Did you know that about 70% of the apartments in NYC are co-ops? One thing co-ops do not like to see is credit card debt. Even a minor $1,000 balance or a 0% interest loan on your balance sheet is enough to invite scrutiny from a discerning co-op board. Pay these debts off sooner rather than later. While you may see the debt as a smart financial move, it raises concerns amongst outsiders assessing your risk tolerance, especially as a fellow shareholder in their co-op. The cleaner your financial sheet is, the smoother everything will go.
Gifting
Gifts are always great, and even better if they’re planned ahead of time! If you're anticipating financial help with a purchase, start talking about it now. Most co-op boards or mortgage lenders look at past bank statements. A large, recent deposit can cause concern. Having the money ahead of time is best. When that’s not feasible, we recommend sharing a gift letter in your application stating that the money is a gift and no repayment is expected. This can avoid last minute hesitations or rejections. Don’t worry, we can send you a sample gift letter and talk you through what it means.
Your Team
It's never too early to start assembling your team. Now is the time to connect with a mortgage lender and a real estate attorney so you are well prepared when the time comes. It's rare, but some people find their dream apartment right away. If you're not ready, it can slip through your fingers. We are happy to recommend vetted mortgage lenders and trusted attorneys.
Buyer Timeline
Meet with Us
Allow us to unpack your needs, understand your goals, and start to outline your options. We will discuss the size, budget, “feel,” style, and location of your future home. We will also explore potential needs such as proximity to schools or work, access to certain amenities, neighborhoods, and more. We will also review and sign required agreements and disclosures.
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Get Pre-Approved
Your next step should be to get pre-approved for a purchase loan (unless you plan to pay in cash). We can connect you with several great mortgage brokers. Based on your income and credit history, the mortgage broker will determine how much a bank is likely to lend, which will help determine the price range for your search.
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Visit Properties
Our team will schedule and accompany you to viewings and open houses. Now is the time to zero-in on your ideal home’s location, layout and amenities. We may also be able to show you Compass private exclusive or even off-market properties that would work for you before they hit the open market.
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Submit an Offer & Negotiate
Once we find the right property, we will prepare and submit an offer. The offer will include not only a purchase price, but any applicable contingencies, inclusions and exclusions, and a target closing date. We also include proof that you will be able to complete the transaction: your pre-approval from your lender and a financial profile. The Toni Haber Team will provide advice and guidance throughout to ensure a well-negotiated deal in your favor. After some back-and-forth with the seller, ideally, you will have an Accepted Offer on the property.. An Accepted Offer is basically a handshake deal – until both parties have signed a contract, either one can still back out without penalty.
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Due Diligence & Inspections
Time is of the essence at this point; the faster this process happens, the sooner you can move towards a binding agreement. Your attorney will investigate the building, including the offering plan and financials for a co-op or condo, and will submit a questionnaire to management to confirm important details. Your attorney’s job is vital to protecting your interests. You will want to work with an attorney who is familiar with real estate transactions. We can provide you with a list of accredited and well-regarded attorneys. We will move quickly to schedule an inspection if needed.
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Contract
After due diligence is complete and the contract is completely negotiated, you sign the contract first and provide a contract deposit of 10% of the purchase price. It’s important to have the contract deposit ready to go in an account you can access. Then the seller signs and you are officially In Contract. Both sides are now fully committed.
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Loan & Appraisal
Your loan agent will schedule an appraisal of the property. Your completed mortgage loan application with all supporting documentation should be submitted to your chosen lender upon receipt of the fully signed contracts. The bank then works as quickly as possible to issue a commitment letter. If your deal includes a financing contingency, it is imperative that this is completed within the time frame in the contract—typically 30-45 days.
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Board Package
If you are purchasing a co-op or a condo, this is a required additional step in the buying process. Co-ops are run by a board of directors who will want to interview you and assess your fitness as a shareholder in the building. Condos do not typically require an interview. Vital to approval is a complete and comprehensive board package. A package typically includes tax returns, bank statements, letters of reference, income confirmation, and your loan commitment from a lender, if applicable. Each building’s requirements are different and we will work closely with you to complete a perfect board package for your building.
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Approval & Closing Preparation
Once your purchase has been approved, all members of your team switch into high gear to prepare for a closing. Your lender will work to have your loan “cleared to close”. Your attorney will work with the seller’s attorney and the building management to confirm a closing date.
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Final Walkthrough
A final walk-through of the property is performed just prior to closing. The walkthrough confirms that no damage has been done to the home since the contract was signed and that the major systems and appliances are in working order, as specifically outlined in the contract.
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Closing
In New York, closings are usually held in person at the building management’s office. You’ll sign all of the paperwork for your loan and for the actual transfer of the property, and provide the balance of the purchase price and any other closing fees. At the end of the closing, you’ll get the keys to your new property. Congratulations!
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What’s Next?
You’re Ready to Make an Offer!
What’s Next?
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The first part of your offer is the actual terms: the price, the amount of financing you intend to get, when you want to close, what you would like included in or excluded from the purchase (for example, it’s standard for “built-ins” to be included and for furniture to be excluded, unless the parties agree otherwise)
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If you’re planning to get a mortgage, we need to provide a letter showing that a bank has pre-approved you for at least the amount of mortgage you intend to get. If you’re purchasing all-cash, we need to provide proof of funds.
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How soon you want to close. A typical co-op purchase, with a mortgage, takes around 90 days. A condo purchase with a mortgage takes around 60 days. A cash purchase can close faster.
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There are two typical contingencies in an apartment contract: a mortgage contingency and a building approval contingency.
Mortgage Contingency. If you are planning to purchase with a mortgage (not buying “all cash”), then we need to state whether or not you want the contract to be contingent on getting that mortgage. If your deal is “non-contingent”, once you sign the contract you will be required to proceed with the purchase even if you can’t get the amount of mortgage you’re looking for. If the contract is contingent on a mortgage, you can cancel it and walk away if you can’t get your mortgage (subject to some specific criteria). Please note: This is an important and complex legal question; you should discuss all of the details about the mortgage contingency with an attorney.
Building Approval Contingency. For a coop purchase, your contract will be contingent on the approval of the coop board. For a condo the contract will be contingent on the condo board
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Regardless of whether you’re financing or paying all cash, we need to provide a short financial statement. This is a preview of what your application to the coop or condo board will look like in order to show the seller that you are a good candidate to be approved. We have an easy to use Excel spreadsheet that we can share with you - just ask!.
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We should also provide a short bio for you. This helps the seller to think of you as a person, rather than just a number!
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After some back-and-forth with the seller, the goal is to have an “Accepted Offer”, which is basically a hand shake deal between you and the seller.
You Have an Accepted Offer!
What’s Next?
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A Deal Sheet will be sent out to your attorney and the seller’s attorney with all of the details of the deal that we have negotiated. The seller's attorney will use this to prepare a draft contract and send it to your attorney. Important to Note: At this point, and until a contract is signed by both you and the seller, either party is still free to walk away. This might happen if you discover something you don't like about the workings of the building or if the seller receives a better offer. Neither side is bound to the deal until there is a fully-signed contract.
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The Deal Sheet will set out for the attorneys all of the details of the deal including the “closing date” you have agreed to with the seller. Keep in mind that this date is just an approximation and there are many moving parts to the transaction that will affect the closing date. Closing dates are almost always written as “on or about” a date. This “on or about” language is used to provide some flexibility, and by custom it allows either party to delay the closing up to 30 days for any reason or for no reason at all. Tell us and tell your attorney if there are any upcoming events that could interfere with the timing of your closing, such as a planned 3-week vacation, or that could require a closing by a particular date, such as an expiring lease on your current place.
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Your attorney will investigate the building. They will review copies of the co-op or condo Offering Plan and all subsequent amendments to the Plan, the last two years of co-op or condo financials, and the minutes of the recent board meetings.They are looking for potential issues of which you should be aware, and for things that could affect the financial state of the building. After reviewing all of these items, your attorney will be in touch to discuss their findings and how they might affect you as an owner of the building.
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Purchase contracts in NYC typically are not contingent on a buyer’s inspection. If you choose to hire an inspector to inspect the property, you must do it before you sign a contract. We should get this scheduled as soon as possible following the accepted offer.
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The attorneys will work out the details of the contract. You, the buyer, will sign the contract first. When you sign, you also provide a “contract deposit” of 10% of the purchase price which will be held in escrow by the seller's attorney until the closing. The contract deposit can be paid by wire transfer or personal check; you will work out the details with your attorney. Typically, the goal is to be ready to sign a contract about a week after the Deal Sheet is sent out, but this can depend a lot on how quickly your attorney is able to get the information he needs and how quickly the attorneys can work out the details of the contract.
Typically, the goal is to be ready to sign a contract about a week after the Deal Sheet is sent out, but this can depend a lot on how quickly your attorney is able to get the information he needs and how quickly the attorneys can work out the details of the contract.
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When the contract has been signed by both sides, you’re “In Contract”. Congratulations!
You Have a Signed Contract!
What’s Next?
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Part of this step will actually be going on before the contract is signed, but most of the work by the bank happens after there's a fully-executed contract. In addition to reviewing your financial paperwork, your lender will also review the building. Your lender will also order an appraisal of the building, to independently verify that the apartment is worth the amount that you are paying (and therefore the amount the bank is lending). You will be asked to pay for the appraisal up front. The appraiser will be from an independent appraisal company and will meet with the seller's broker to view the building. The appraiser will use comparable building sales in the neighborhood to provide the bank with a value for the building. Once the bank is satisfied with your financials, the building’s details, and the appraisal, it will issue you a Commitment Letter, indicating that it is willing to lend you a particular amount. This can take 3-6 weeks, but your mortgage broker should be able to give you a more specific timeframe.
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A condo package is usually less grueling than a co-op application package, but both kinds of buildings will likely ask for personal info, a financial statement, tax returns, pay stubs, etc. Usually, the application will also require a copy of the Commitment Letter from your bank, so if you are getting a mortgage, we have to wait for the commitment letter to be issued before we can submit the whole application package to the building. For a purchase with a mortgage, the board package is typically due 3 business days after you receive your commitment letter from the bank. For an all-cash purchase, the board package is typically due 10 business days after the contract is fully signed. Take a look at our Board Package Tips and Tricks for details!
You’re (Board) Approved!
What’s Next?
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Your whole team - everyone involved in the transaction - needs to know you’re approved. This includes anyone who is co-purchasing with you or acting as your guarantor, your attorney, your mortgage broker or bank, and me. Typically, I will be notified by the managing agent and will inform all parties, but if you think there’s anyone not in the loop, let them know the good news.
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Waiting for the bank can be the most time-consuming part of the post-approval process. We need the bank to tell us that your loan is “cleared to close.” This is the final step where the bank says it's ready to provide the mortgage funds at the closing table. This can take about a week, or sometimes more if the bank needs to ask for additional documents or information. Sometimes documents provided to the bank (either by you or by the coop or condo) will “expire” while we’re waiting for board approval. A good mortgage broker will stay on top of these things so they don't all pile up to be fixed at the very last minute. The attorneys cannot schedule a closing before the bank tells us the loan is “cleared to close.” Fortunately, there are other things you can do while we’re waiting!
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YOU NEED IT. Your lender and/or the building are likely to require that you have insurance. Plus, it’s just a smart idea to insure your biggest investment. You should have your insurance in place as of the day of the closing. Be sure to double check your commitment letter, any other instructions you’ve received from the bank, and any requirements from the building about how much liability insurance they require you to have (in case someone is injured in your apartment). The cost of insurance is going to depend on the purchase price of your property, the value of your personal property, and the amount of liability coverage you need. Depending on these factors (and the deductible you choose), the premium can range from a few hundred to several thousand dollars per year.
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Your attorney and the seller’s attorney will schedule the closing. New York City closings are done in person with all parties attending, including you and your attorney, the seller and the seller’s attorney, and the attorney for your lender. For a coop closing, the building’s managing agent or attorney will also attend and the closing is generally held at their office. For a condo closing, your title insurance company will attend and the closing is generally held at the seller’s attorney’s office. If you cannot attend your closing, you can sign a power of attorney in advance to allow someone else (such as your attorney) to sign for you, but it’s best if you can be there in person.
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On the day before or the day of the closing you and I, along with the seller’s broker, will go to the apartment for a final walk-through. The contract requires that the seller deliver the apartment to you vacant (unless otherwise agreed), in the same condition as it was on the day you signed the contract (less any normal wear and tear), and broom-clean. It typically also requires that the appliances be in working order. We will check these things and also check that the seller did not damage the apartment during their move-out, leave behind anything they were supposed to take, or remove anything that was supposed to stay. We also need to double check that there’s a working smoke detector, as you’ll need to sign a form acknowledging this at the closing. If there are problems, we will inform your attorney and the seller’s broker will inform the seller’s attorney. The attorneys will almost always be able to work out a solution to allow the closing to go forward.
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On the day before the closing, your attorney will give you the list of Bank or Certified checks you need to bring to the closing. If you’re getting a mortgage, your attorney can’t give you this information until your lender provides its final numbers. This can sometimes happen very late on the day before the closing, so plan for the possibility that you will have to stop at your bank the morning of the closing. Your lender will take some of its fees and some interest out of the amount that it is lending to you – these were detailed in your Loan Estimate you received when you first applied for your loan. For example, if you are getting a mortgage for $450,000, the bank may only bring $447,600 to the closing (the exact number will vary). You will need to make up the difference between the amount the bank brings and the total amount you owe to the seller. For a condo purchase, you may also need to bring bank checks for additional closing costs. You will also need to write some personal checks at the closing for things like the balance of your attorneys’ fee and your first month of maintenance or common charges to the building.
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We will double check any other paperwork that you have received from your bank or from the building to see if they require anything else at the closing.
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Be on time for your closing. Be sure to bring the following: your bank/certified checks, your personal checkbook, and photo ID (2 forms if possible, such as a driver’s license and a passport). At the closing you will sign all of your mortgage paperwork and all of the documents that transfer ownership from the seller to you. At the end of the closing, you will get the keys (including a mailbox key) and the apartment is yours!
You’ve Closed!
What’s Next?
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Put the gas and electric in your name. Call ConEd and/or National Grid, if applicable, so that the bill can be transferred to your name. The seller should have called prior to the Closing to inform the provider that they would be moving out.
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Bring a copy of your deed or stock certificate the first time you go to the building, just in case, to show that you are the new owner.
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Typically, your move-in must be scheduled with either the managing agent or the building’s super. Each building has its own procedures, but many buildings will not confirm a move-in date until after you have closed. If you did not submit a move-in deposit and/or move-in fee with your board package or at the closing, you may need to provide one when you schedule your move-in.
Preparing for a Board Interview
The Interview: A Dozen Tips
No two interviews are alike! Some Boards meet prospective buyers only after they have decided favorably on their application, others use the interview as the time to scrutinize both the financials and the candidates. As your real estate professional we have, from years of experience, created this list of “hints” to help you face your Interview.
Dress conservatively. Suit and tie for men. Suit and minimal jewelry for women.
Be on time, If not early. Let them be late! Often you are part of a larger agenda of the whole board and the interview is delayed. Be patient.
Be prepared for personal questions. Handle them without being defensive. They just want to be comfortable that you’ll be a great neighbor.
Be familiar with your complete package. Specifically your financial statement. And be prepared to answer any questions concerning your financial picture.
Discuss “all issues” before you arrive. If two or more people are being interviewed – Don’t contradict or interrupt one another.
Don’t ask questions. For example, especially ones that should have been answered prior to your signing a contract such as building repairs, financials, etc. This is your interview, not theirs. *See Most Often Asked Questions.
Don’t discuss renovations. Unless asked, and then downplay the extent of the work you intend to do.
Don’t offer any personal information. Don't offer up anything that is not requested.
Don’t expect a decision on the spot. More often than not, a review by the full Board must be made.
Post interview requests. In some instances, the approval might be contingent upon maintenance being held in an escrow account.
Be Patient. After the interview, the managing agent will contact you or your agent with the Board’s decision. In some cases this may take up to a week or longer.
Enjoy it. Be relaxed and confident. Who knows? Someday it may be your job to interview the new candidates.
Most Often Asked Questions by Boards
Financials
Often if a Board has questions relating to financials they will ask them before the interview, but be prepared for the meeting. Take a copy of the package with you.
You will be asked for detailed explanations of financials, especially if self-employed.
Do you feel confident that you can comfortably carry the mortgage and maintenance?
Feel Good Questions
Why did you choose this building?
What made you choose this apartment?
Why do you want to live in this neighborhood?
How long have you been looking? How many apartments did you look at?
House Rules, etc. (You will be asked questions designed to see if you’ve read the house rules and will abide by them.)
Do you have any questions about this building?
Do you have any pets?
What kind of renovations will you be doing? How will you finance this renovation?
Are you going to use the apartment for residential purposes only?
Do you work out of home? What kind of traffic will there be? (security)
Would you run for the Board? What skills could you offer?
Lifestyle Questions
Do you play any musical instruments?
Do you entertain often?
Do you smoke?