There are a number of professionals who we have to work with to coordinate our sales, from the attorneys, home inspectors, contractors mortgage brokers, and sometimes managements and co-op boards as well as our sellers and purchasers.
Every once in a blue moon a structural engineer to check out the integrity of walls and foundations in a home. The coordination between the parties is tantamount and crucial, especially during the current times, to make sure the transaction heads in the right direction in an efficient and expeditious fashion so the end result will be a positive one.
With the assistance of the selling and listing agents and with the seller and buyer coming to an agreed and accepted price, (submitting the accepted offer with a lender’s letter or proof of funds if paying outright for the purchase) would be the initial first step in the process of creating a sale.
The next step would be a deal sheet between the parties, showing all the parties to the sale, buyers, sellers, agents and attorneys, terms to the agreement (sale price, how much of a mortgage, total out of pocket by the buyer, what is included in the sale and the approximate on or about closing date.
“On or about” closing dates are more flexible than a “on or before” date, which is a “time of essence” where the closing must take place on or before a specific date. This form will be emailed to the seller’s attorney as well as to all the other parties, so if any mistakes are apparent, they can be corrected by having more people review the document.
When needed, sellers should discuss any additional time that they might need to stay in the home after closing, due to unforeseen circumstances in moving to their next home. This will need to be written into the contract.
Also, the attorneys will always go over the contracts as the terms and conditions and language must be agreeable to both of them.
However, prior to signing a contract, the buyer should perform an inspection to make sure what they are purchasing has no major defects, as no one likes surprises, and additional expenses especially after closing (unless the purchaser(s) knows he/she is buying in “as is condition”).
First the contract is signed by the buyer(s), and then sent over to the seller(s) by purchaser’s attorney for the seller(s) to sign. Once the contract is fully executed, then the buyer(s) must provide their mortgage person a copy of their contract, so the process of applying for their mortgage begins.
Assuming the buyer(s) have provided all their personal information from the beginning to get their pre-approval, so there are no conditions then their appraisal can be done on the home.
Appraisals under the current environment will be scheduled in 1-2 weeks. The appraiser will complete his appraisal and then send it over to the bank to further the approval process.
Usually, most contracts are signed with a 45-60 day window for the final written mortgage approval. However, there are times when a delay by the bank or additional paperwork might be asked for from the buyer, and an extension of time will be required and is asked for by the buyer’s attorney.
If it is a co-op sale, then management sometimes will ask for a copy of the contract to verify the sale. Once that is done a copy of the co-op sale package is provided to the purchasers while the mortgage is being facilitated, and the process of filling it out begins.
Although it can be a challenge to some to provide all the required information that a co-op asks for on the application, it will provide a very clear picture of the financial capability of the buyer(s).
Unless one has the money to purchase a condo, (no board approval) which can be around $100,000-$150,000 more for similar space, (but more luxury, guaranteed indoor parking, doorman, allowed to rent, etc.) co-ops are an excellent alternative, as long as their financials are strong, with enough money in their reserve fund, good working capital to pay the monthly bills and maintenance that is somewhat comparable to other similar units and increases have been minimal over the last number of years.
Once management goes over the application, it then sends it over to the board to again, go over the package with a “fine-tooth comb.” Then, management will call to schedule an appointment for the prospective purchasers in person interview.
Lately, I see more boards considering or doing a Zoom interview is much more efficient, safer and more flexible in performing the interview for all involved parties.
Once the buyer passes the board then a closing can be scheduled, after the bank says that the sale is “clear to close.” Both attorneys, the bank attorney, title company will work on a closing date and will convey this to buyer, seller and agents involved in the transaction.
Agents must send in their bills for services rendered with both their personal and corporate license numbers to the seller’s attorney.
Also, a final walk-through of the property is done to make sure everything is in order, utilities are functioning and the home is in the same condition as when the buyer’s last visited it when there was an agreed and accepted price.
No one likes surprises at the closing as that should be the time when everyone is satisfied and happy. However, if there are any major issues, then money is held in escrow until those issues are satisfied, but the closing will still occur.
The day of the closing all the paperwork is completed and if a cash sale then a copy of the contract is needed for the agents records, with all the NYS agency, lead (as applicable) and Covid disclosures.
However, if a mortgage is involved then a CD (closing document) must be kept by both agents for their records for 3 years as per the Department of State rules.
Obviously, the process from start to finish is a very involved and with parts, so it is important to have everyone on the same page throughout the transaction, so the sale will be as efficient as possible with the least amount of stress.
Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck. He has 40 years of experience in the Real Estate industry and has earned designations as a Graduate of the Realtor Institute (G.R.I.) and also as a Certified International Property Specialist (C.I.P.S). For a “FREE” 15 minute consultation, a value analysis of your home, or to answer any of your questions or concerns he can be reached by cell: (516) 647-4289 or by email: [email protected]