What Happens After You Accept an Offer? NYC Contract-to-Close Timeline: What Every Buyer & Seller Should Know

What Happens After You Accept an Offer? NYC Contract-to-Close Timeline: What Every Buyer & Seller Should Know

Securing a handshake deal on an NYC apartment is an exhilarating moment, but it's only the first step. The journey from an accepted offer to holding the keys is a detailed process known as the "contract-to-close" period. This phase is unique in New York City due to its reliance on attorneys and the distinctions between co-op and condo transactions.

As your trusted real estate partner, Yeo Real Estate is here to demystify the timeline and key milestones. Here is a comprehensive guide to what happens after an offer is accepted, tailored for both buyers and sellers.

The NYC Real Estate Timeline: A Step-by-Step Guide

The timeline from contract to close in NYC varies significantly depending on the property type and whether financing is involved. While the process for condos and houses can take 60-90 days, a co-op closing typically requires 2-3 months due to the added step of board approval.

Here's a breakdown of the typical process:

Phase 1: Attorney Review & Contract Signing (Approx. 1-2 Weeks)

Once an offer is accepted, the attorneys take the lead.

• Deal Sheet: The brokers for both sides create a "deal sheet" that outlines the basic terms, including the purchase price, buyer/seller information, and attorney contact details. This is sent to the legal teams.

• Contract Drafting & Negotiation: The seller's attorney drafts the Contract of Sale, which is sent to the buyer's attorney for review. The two legal teams will negotiate key terms, such as contingencies, financing details, and specific items included in the sale.

• Due Diligence: While the attorneys are negotiating, the buyer's attorney conducts due diligence. For a condo or house, this involves ordering a title search and reviewing the building's offering plan and financial statements. For a co-op, the attorney will review the building's finances, board minutes, and legal documents.

• Home Inspection: Buyers typically have a limited window to conduct a professional home inspection. This is a crucial step to identify any structural, mechanical, or maintenance issues with the property.

• Contract Signing: Once all terms are agreed upon and due diligence is complete, the buyer signs the contract and submits a contract deposit (typically 10% of the purchase price). The seller then counter-signs. Only when both parties have signed and the contract is "fully executed" is the deal considered in contract.

Phase 2: Mortgage & Board Approval (Approx. 4-12 Weeks)

This is often the longest phase, especially for co-ops.

• Mortgage Application: If the buyer is financing, they submit a formal mortgage application to their lender, usually within a few days of signing the contract. The bank will then order a property appraisal and begin the underwriting process.

• Lender Commitment Letter: The bank will issue a commitment letter once the loan is approved. This letter outlines the terms of the loan and is required for a co-op board package.

• Co-op Board Package & Interview: For co-op buyers, this is a major hurdle. The buyer must compile a detailed board package with financial statements, tax returns, letters of reference, and other personal information. This is submitted to the building's managing agent for review by the board. After the board reviews the package, they will invite the buyer for an interview, which is the final step before a decision is made.

• Condo & House Approvals: While condos don’t have a board interview, the building's managing agent will review the buyer’s financials and issue a waiver of first refusal, which allows the sale to proceed. For a house, no such board approval is required.

Phase 3: Pre-Closing & Final Walkthrough (Approx. 1-2 Weeks)

Once all approvals are in place and the lender has given the "clear to close," the final steps begin.

• Scheduling the Closing: All parties—the buyer, seller, and their respective attorneys, the bank's attorney, and the title closer—coordinate their schedules to set a final closing date and time.

• Final Walkthrough: Typically 24-48 hours before closing, the buyer conducts a final walkthrough of the property. This is to ensure the unit is in the condition agreed upon in the contract, that all appliances are in working order, and that the seller has removed all personal belongings.

Phase 4: Closing Day! (Approx. 1-2 Hours)

The day you've been waiting for. All parties meet to finalize the transaction.

• Document Signing: The closing table is where all legal documents are signed and notarized, including the deed for condos and houses, and a stock certificate and proprietary lease for co-ops.

• Funds Transfer: The buyer's attorney provides the remaining funds in the form of certified or bank checks, which are then distributed to the seller, brokers, and other parties.

• Keys! Once all documents are signed and funds have been exchanged, the buyer officially takes ownership and receives the keys.

Who's Who in an NYC Closing

An NYC closing involves a cast of crucial professionals, all with distinct roles.

• Real Estate Attorneys: Unlike in many other states, an attorney is essential for every NYC transaction. They represent your legal interests, negotiate the contract, conduct due diligence, and guide you through the closing process.

• Real Estate Agents: The brokers are instrumental in the beginning and end of the process, from marketing the property to negotiating the initial offer and attending the closing to receive their commission checks.

• Lender: The bank provides the mortgage and issues the commitment letter, which is a key milestone for financed deals.

• Title Company (for condos/houses): The title company performs a title search to ensure there are no liens, encumbrances, or other issues with the property's title. They issue a title insurance policy to protect the buyer and lender.

• Co-op Board/Managing Agent: For a co-op, the board and their managing agent are the final gatekeepers. Their approval is required before the deal can close, and they will coordinate the closing logistics with the attorneys.

A Closer Look at Closing Costs

Closing costs can be substantial in NYC and are paid in addition to the purchase price. They differ between buyers and sellers, and between co-ops and condos.

Buyer Closing Costs

Buyer closing costs typically range from 2-4% for co-ops and 4-6% for condos and houses. The main difference is the Mortgage Recording Tax (MRT), which applies to condos and houses but not co-ops.

Seller Closing Costs

Seller closing costs in NYC are significantly higher, ranging from 8-10% of the sales price, largely due to broker commissions and transfer taxes.

Tips & Takeaways

• Hire the Right Team: In NYC, an experienced real estate attorney is not optional. They are your best defense against potential issues and will handle the complexities of the closing process.

• Stay Organized: Keep a folder with all of your financial documents, from tax returns to bank statements. Having everything ready will streamline the mortgage application and board package process.

• Communication is Key: Maintain open communication with your agent, attorney, and lender. Promptly respond to all requests to keep the timeline on track.

• Be Patient: Delays are common in NYC real estate. While contracts often include an "on or about" closing date, they are not legally binding. It's wise to have a backup plan and avoid scheduling movers until a firm closing date is set.

Navigating the contract-to-close period can feel overwhelming, but with the right knowledge and a dedicated team, it can be a smooth and successful experience.

Ready to start your real estate journey? Contact Yeo Real Estate today for professional guidance and unparalleled expertise every step of the way.