Your offer has been accepted! But, wait! There is more. The next vital steps are to consult with your attorney so they can provide you with proper legal guidance regarding your home purchase.
Now that you have found your ideal apartment and have agreed on the price, what happens next? Your next important decision will be to retain an experienced real estate attorney to guide you through the process of buying your home. If you are obtaining financing, you should also select a Lender.
Once you have retained an attorney, your attorney will perform due diligence. Typically, due diligence includes a review of the board minutes, condominium's offering plan and financial statements. Next, your attorney will review the Contract of Sale with you to ensure that the Contract accurately reflects the particulars of your transaction. For example, when is the closing date? Will the apartment be delivered vacant or does the Seller need to stay after closing? Is there a mortgage contingency and how much time do you have to secure financing with the Lender?
Your attorney should also explain the closing costs. Closing costs will vary depending on the purchase price, whether you will be taking a loan and whether you are buying a new construction. Certain fees will apply for any purchase - these include title search fees, title insurance premiums, recording fees and your attorney's fee. If you are financing, you will incur additional fees such as bank charges and a NYC mortgage tax. Purchases buying a property in excess of $1,000,000.00 will also need to pay an additional 1% mansion tax.
Supplemental closing costs may apply if you are buying a new construction. For example, you may be required to pay the NYS and NYC transfer taxes, contribute to the fees. As each deal is negotiated differently, your attorney will be able to calculate your specific closing costs pertaining to the property which you are purchasing.
After all the details have been ironed out and you fully understand your closing costs, the Contract is ready to be signed. You, as the Purchaser, will need to send a Contract Deposit equal to 10% of Purchase Price along with the partially executed Contracts. Once the Contract is fully executed, there are a few more things a Purchaser needs to do. The Purchaser needs to submit a loan application to the Lender, if applicable, and work with his or her real estate agent on completing the condo's application package, if required.
In the interim, your attorney will order a title search to ensure that there are no liens or encumbrances. A closing can be scheduled once any title issues are cleared and the Lender has cleared any conditions on their end. At the closing, the Seller would sign a new deed transferring ownership of the apartment to you! Congratulations - you're now a homeowner!
The content provided in this article is a general overview of buying a condominium in New York City written by Sherry L. Chu from Chu Law Firm LLC. Remember to always consult an attorney for the risks and closing costs specific to your transaction.