How long does it take to close a co-op?
It takes around 60 days to close on a cop-op in New York. Every co-op purchase will go through similar steps between when the offer is accepted and closing. The following steps are the timeline you can expect:
Negotiations: When the seller accepts the buyer’s offer, a deal sheet will be provided to both attorneys by the real estate agents. The deal sheet will include key information about the transaction such as the following:
- The property address
- The purchase price
- The parties’ names
- Financing requirements
- The down payment
- Any other caveats of the deal
Each attorney will have the chance to review the agreement and attach any riders to the contract. The seller’s attorney will typically prepare the initial draft of the contract. During this step, the buyer’s attorney will likely perform due diligence on the co-op. This step is necessary to determine if there are any material issues that could impact the decision to purchase. The negotiation of the contract should last around 7 to 10 days.
Mortgage commitment: Buyers will need to give the bank the necessary documents to get a mortgage commitment letter. This stage can take 30 to 45 days on average. It is important that you file your mortgage financing application as soon as the contract is complete.
Board review: The buyer will submit a board application to the co-op management company as soon as the contract has been signed by all necessary parties. The co-op board applications may require the following documents:
- Bank statements
- Reference letters from personal and professional sources
- Tax returns
It may take around two weeks for the package to be reviewed by the co-op board. If your application is approved, you will schedule the board interview. After the interview, you will receive an official approval or rejection.
Lien search: The buyer’s attorney will order a lien search while the board application is being processed. This will ensure there are no liens on the title that will affect the seller’s interest. This will also allow the seller’s attorney to have enough time to clear or remove them before closing. A lien search should only take two to three days.
Closing: Due to the pandemic, many closings are now able to be done virtually which can save time. If the co-op’s transfer agent permits it, the parties can sign and mail the appropriate documents to the transfer agent at their convenience. You can expect the closing period to be around seven to 14 days after board approval.
What might speed up or delay the closing of a co-op?
Buying from a sponsor may speed up the closing of a co-op because this likely will eliminate the need for board approval. When the buyer is paying all-cash rather than financing the purchase, this can speed up the closing of a co-op. A closing may take as little as four to six weeks in these circumstances because all-cash purchases eliminate any potential delays due to appraisals, obtaining mortgage commitments, and the underwriting process.
On the other hand, buying from an estate will involve different documents that must be submitted. When an attorney is not experienced in purchasing from an estate, they may not be familiar with the correct documents that need to be submitted, which may delay the process. This is why it is important that you retain the services of an attorney who has experience with both estates and real estate to handle your co-op closing matters.
Reach out to Zimmet Law Group, P.C. today to learn more about our services, experience, and how we can assist you and your specific circumstances.
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