A step-by-step explanation of the process for purchasing a cooperative apartment in New York City.

Once you have a verbal acceptance of your offer to the Sellers, the process is fairly straightforward.  You should bear in mind, some sellers feel, there is no deal unless a contract is signed by both parties.  Many purchasers have lost apartments because other buyers come in with offers accompanied by the promise to sign a contract quickly.  Therefore, it is important to instruct your attorney to complete his due diligence in a timely fashion.

1. Your broker will assemble facts for the contract:
 a) Social security #s for all parties on contract  b) Address  c) Amount of financing d) Attorney name and address e) What you want left in the apartment f) Closing date g) Other provisions singular to your purchase

Important:  If you are financing, you should discuss the length of time you need in order to get the “commitment” from the bank with your attorney.  Usually this contingency clause in the contract calls for no more than 30 days.  Your bank or your mortgage broker can give you an idea of how much time you need.

2. Your attorney will receive:
 a) Offering plan  b) 2 years most recent financials  c) Lead paint affidavit signed by Seller  d) Opportunity to read the corporation’s minutes of board meetings.

3. The Seller’s attorney will prepare a contract for your attorney’s review.  You sign first and give a deposit of ten (10%) percent of the purchase price to be held in the Seller’s attorney’s escrow account until closing.  The Seller then signs and the contract becomes legally binding once it has been received by your attorney, fully executed. 

4. You should immediately begin assembling your financial information for the bank.  Bear in mind, much of this information will also be required by the cooperative, so make additional copies.

5. Direct the financing institution to send the appraiser to your broker

6. The application for the cooperative usually asks for:
 a) Net worth statement  b) Back up documentation for the amounts you stated on net worth  c) Last two years income tax returns (complete)  d) 1099 for latest year if tax returns not yet complete  e) Letter from your employer stating length of employment and salary (plus any bonus)  f) Several reference letters, both business and personal.  You should be lining up your references as you go along.  There will also be various forms to fill out.  They will be given to you as part of the application package. 

7. When you receive the loan “commitment”, you must also get the Aztec Recognition Agreements from the bank.  These are forms that the bank requires the corporation to sign which states the corporation recognizes the bank’s interest in the property.

8. When you have assembled all of the paperwork required by the corporation, work with your broker in assembling the application in a clearly defined package.  Forms should be typed.  Copies must be legible.  Neatness counts.  Your broker usually makes the copies for you.

9. The application package is then sent to the corporation’s managing agent.  This agent will conduct the credit check, and review the application to see if it’s complete.  It is not unusual for these transfer agent’s to return packages for additional information if deemed to be incomplete.

10. The managing agent then sends the application sets to the members of the board of the corporation.  Once they have a chance to review same, they ask for an interview.  Usually, the application requirements detail the time frame for submissions in order to make the interview schedule (ie.; due on the first of the month)  Bear in mind, these boards are all made up of volunteers and don’t always meet on a regular basis.  Your broker will try to have knowledge of their schedule before you start this process.

11. After the interview, you must wait to hear the decision from the managing agent, sometimes this takes awhile.  Your broker has no control over this process.

12. After your approval, the attorneys take over to schedule the closing date.

13. Prior to closing, you will conduct a “walk through” of the apartment to make sure all the terms of the sale are met, i.e.; appliances work, no holes left in walls, items agreed to are left in apartment.  Your broker will accompany you for the inspection.

14. At the closing:  Bring photo ID.  Bring additional checks.  This usually takes between 1 to 2 hours.

CONGRATULATIONS!