How to Make an Offer on an Apartment in NYC: What Every Buyer & Seller Should Know
How to Make an Offer on an Apartment in NYC: What Every Buyer & Seller Should Know
Making an offer on an apartment in New York City is a high-stakes, fast-paced process unlike many other real estate markets. It’s a moment of both excitement and anxiety, where preparation and speed are the keys to success. In NYC, an offer is more than just a number; it's a comprehensive package that tells the seller you are a serious, qualified buyer.
At Yeo Real Estate, we believe a transparent, step-by-step approach is the best way to navigate this critical stage. This guide will walk you through the essential components of a strong offer, the crucial timeline, and what happens once your offer is accepted.
Step 1: Laying the Groundwork for Your Offer
Before you even fall in love with a property, you must have your financial ducks in a row. A strong offer is built on a foundation of solid financial documentation. This is not just a suggestion—in a competitive market, it’s a prerequisite.
Key Documents You Need to Prepare
Mortgage Pre-Approval Letter or Proof of Funds: This is the most critical document. If you are financing your purchase, a pre-approval letter from a lender shows that you are qualified to borrow the amount you need. If you’re a cash buyer, you'll need a recent bank statement or a letter from your financial institution proving you have the funds available. Sellers will not take an offer seriously without this.
REBNY Financial Statement: Unique to the NYC market, the Real Estate Board of New York (REBNY) Financial Statement is a detailed summary of your financial picture. It includes your assets (liquid assets, real estate, stocks, etc.), liabilities (debts, loans), income, and net worth. This statement is typically reviewed by the seller and, for co-ops, is a standard part of the board application.
Real Estate Attorney: In New York, an attorney must handle the real estate transaction. You should have a real estate attorney identified and ready to go before you make an offer. This will save valuable time once your offer is accepted.
Step 2: The Offer Submission Process
Once you've identified the perfect apartment and have your documents ready, you’ll work with your real estate agent to craft and submit the offer.
What a Strong Offer Looks Like
While the offer is a verbal or written expression of interest at this stage, it should include more than just the price. A compelling offer package typically includes:
The Proposed Purchase Price: Based on the asking price and a market analysis of comparable sales, your agent will help you determine a competitive offer.
The Proposed Down Payment: In NYC, a 10% contract deposit is standard. This is paid at contract signing, not with the initial offer. The total down payment is typically 20% or more, depending on the property type and lender requirements. Co-op boards, in particular, often require a higher down payment.
The Mortgage Amount: If applicable, this will be the remainder of the purchase price.
Proposed Closing Date: A specific timeline that shows you are prepared to move forward quickly.
Any Contingencies: These are conditions that must be met for the sale to go through. Common contingencies include securing a mortgage and, for co-ops, board approval. The offer itself is often contingent on due diligence, which is the next crucial step.
Your real estate agent will submit this offer, along with your pre-approval letter and REBNY statement, to the seller’s agent.
Step 3: What Happens After Your Offer is Accepted?
This is the most critical and often misunderstood phase of the NYC real estate process.
The Accepted Offer is Not a Done Deal
In NYC, an accepted offer is a non-binding, verbal agreement. Until a formal contract is signed by both the buyer and the seller, either party can walk away from the deal at any time without penalty. This is why it’s imperative to move quickly. A seller will likely continue to show the apartment and may accept a higher backup offer (a “stalking horse”) until the contract is signed.
The Due Diligence Period
Once your offer is accepted, your real estate attorney immediately begins the due diligence process. This involves a deep dive into the building and the unit to uncover any potential red flags.
Your attorney will review:
The building’s financials (e.g., balance sheets, income statements).
The building's bylaws and offering plan.
Board meeting minutes for any discussion of upcoming assessments, major repairs, or legal issues.
You will conduct:
A professional home inspection to check the condition of the apartment's systems (plumbing, electrical, etc.).
A personal visit to the building's basement, laundry room, etc. to get a feel for the condition and management.
This period is your opportunity to ensure the property is a sound investment. If any major issues are discovered, your attorney can negotiate with the seller or, if necessary, advise you to walk away from the deal.
The Contract of Sale & The Contract Deposit
Once due diligence is complete and both parties are satisfied, your attorney will finalize the Contract of Sale. This is a legally binding document that outlines all the terms of the transaction. You will sign the contract and send it, along with a 10% contract deposit, to the seller's attorney.
Once the seller countersigns the contract and returns it, the apartment is officially "in contract." Congratulations! The property is now legally yours, pending the final closing.
Tips & Takeaways
Be Prepared: Have your pre-approval and financial documents ready before you begin your serious search.
Be Fast: A quick response to an accepted offer is crucial. The longer it takes to sign the contract, the greater the risk that the seller will consider another offer.
Work with Professionals: An experienced real estate agent and attorney are your most valuable assets. They will guide you through the process, protect your interests, and keep the transaction moving forward.
Making an offer in NYC is a meticulous process, but with the right preparation and team, you can confidently navigate the market and secure your dream apartment.
Thinking of buying or selling in NYC? Let Yeo Real Estate be your trusted guide. Our team of experts is ready to help you every step of the way. Contact us today for a free consultation.