If you are purchasing a co-op apartment, you must complete and submit a purchase application (also known as a “Board Package”) to the managing agent for the building. What is the next step after I have signed the contract and submitted a loan application? Your contract may also contain a financing contingency that allows you to cancel the contract and recover your downpayment if you are unable to obtain a loan to finance the purchase. If you are purchasing a condominium apartment, your obligation to purchase will be contingent upon receipt of a waiver of the condominium board’s right of first refusal to purchase the apartment. If you are purchasing a co-op apartment, approval of your purchase by the building’s board of directors is a standard contingency. What are the typical contract contingencies?
These contract provisions are called “Contingencies”. Generally, you cannot cancel a contract after it has been countersigned, but most contracts contain provisions that allow the Purchaser to cancel the contract and recover the downpayment if certain events occur. What if I change my mind about purchasing the apartment after signing the contract? The downpayment may be paid by personal check. Unless you are purchasing from a Sponsor or Developer, the money is generally held in a non-interest bearing account. The downpayment is typically 10% of the purchase price and is held by the Seller’s attorney in a special bank account called an escrow account or attorney trust account. How much is the downpayment and who holds it? After the contract has been fully negotiated, you will sign and return four copies of the document to your attorney along with a check for the downpayment. Your attorney will review it with you and negotiate any necessary revisions with the Seller’s attorney. It is customary for the Seller’s attorney to prepare the contract. If you are financing your purchase, and have not already done so, you should contact a Lender to obtain a loan pre-qualification letter. In addition, your attorney should review the corporate board minutes of the co-op or condominium and speak with the building’s property manager to ascertain, among other things, any physical or financial problems with the building. Your attorney should perform “Due Diligence” that includes reviewing the Offering Plan, all Amendments to the Plan, the By-Laws, the Proprietary Lease (for co-op apartments) and the financial statements for the building. Hire a real estate attorney licensed to practice law in New York and experienced in representing home buyers. My offer to purchase an apartment has just been accepted.
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