Closing dates.. closing timeline...!
Navigating Closing Dates in NYC Real Estate: What to Expect
Closing dates can be a bit of a moving target, and the timeline can vary depending on the type of transaction you’re dealing with. Let me walk you through a few types of transactions.
1. Resale Transactions: When you’re buying a resale property (an existing apartment), the closing date in the contract usually includes an “on or about” date, giving both parties about 30 days of wiggle room.
2. Sponsor Sales in New Buildings:
• Completed Buildings: If you’re buying a unit in a newly constructed building that’s fully finished, you might be able to close almost immediately after signing the contract and the funds were fully paid. Since no board approval is required, sponsors want you to move in ASAP. As long as the building is cleared by the bank, and the walk through inspection is done without issues, you are ready to move in.
• Buildings Still Under Construction: For buildings that are still being built, the closing can only happen once the building gets its Temporary Certificate of Occupancy (TCO) and the unit passes the walk-through inspection. Delays are very common here, so it’s important to prepare yourself for at least a few months of delay. I have never seen a sponsor on time with anticipated closing dates. I get it though, there are just too many moving parts.
The COVID TIMES!
The COVID-19 pandemic made this even more challenging, well I should say extremely challenging. Construction delays, slow government approvals, and shipping issues meant that some clients had to wait much longer than expected to move into their new homes. It was a very challenging time, especially when interest rates were unprecedentedly rising during the wait. Can you imagine? Some clients even had to find temporary housing while they waited for their new place to be ready. I am very thankful for clients who went through those times with me.
4. Protecting Against Delays: One way to protect yourself (as a buyer) from unexpected delays is to include a “time of the essence” clause in your contract. This clause sets a firm deadline for closing, and if the deadline isn’t met, you have the option to back out of the deal. I recently had a client who used this strategy because the seller’s situation was uncertain, and we weren’t confident they would move out on time. It’s a great tool if you can negotiate it into your contract. Please note, that you need to have the waiver of the board’s right of refusal received prior.
5. Why a Good Lawyer Matters: Given how complicated NYC real estate can be, having a good lawyer on your side is crucial. They can help protect your interests and make sure everything goes as smoothly as possible, even when delays happen.
In the end, despite any delays or complications, closing day is always a happy moment when everything finally comes together. I will write about how to prepare a closing date next.