All Cash Client Question About The Transaction Timeline From Contract On
Good morning, Sharon.
You asked me about the timeline for the purchase application and board package in your text, but I figured I'd write to you here.
The Due Diligence: 2-5 days usually
First, your attorney will do the due diligence work looking through the building financials, the minutes of the coop meetings, the by-laws, the offering plan, and other sources to see how the coop is doing, if there's any litigation, any current assessments and/or talk of future assessments, etc. She will also negotiate the contract to make sure you are protected, etc.
The Contract Signing: 2-5 days usually
After the due diligence work is complete, your attorney will discuss her findings with you and will either call you to sign the contract in her office or will email you the contract for you to sign it digitally.
She will also ask you to make your deposit of 10% of the accepted offer amount. That could be made by a bank check or by a wire transfer. She will give you the options.
Then the contract with your signature will go to the sellers' attorney, and the sellers will be asked to counter-sign the contract.
Then the fully executed (signed) contract is sent back to your attorney. At this point, both you and the sellers are bound by the contract and its agreed clauses. Any changes could have repercussions.
One of the many items in the contract will be the number of days we have to prepare and submit the purchase application and board package. Please find out with your attorney what that is. I'd suggest at least 2 weeks. You will need to gather all required documents and reference letters, give all of them to me, and I will type, prepare, and assemble the board package for submission to the board. This work is fundamental to the success of the transaction and must be done properly.
Preparation of the purchase application and Board Package: 2-3 weeks usually
We will work together to get this part done. You need to gather all info and docs requested, then send them to me. I will type and organize everything appropriately. Then I will assemble the package and submit it to the management association.
Management Association & Board Review: 2-4 weeks
The management association will review the board package. They will pull do a credit and background check on you, then add that report to the board package.
The management association will forward your board package to the Coop Board members for review and approval.
The Coop Board members will review your application, and at their next meeting, they will talk about it. They will contact us if they would like any additional documents and/or any clarification.
If the Coop Board determines that you meet their qualifications, you will receive an invitation for an interview. Before Covid, this was an in-person interview, but currently, the interview is being done via a Zoom meeting with some or all the Board members and you. Nobody else is invited to the Zoom meeting.
Invitation for the interview and notice of their decision: 2-5 days
The Board will give you some options and times for the interview. You should try your best to fit in one of the options given by the Board.
I will go over with you a list of possible questions and approaches for the interview.
Usually, if the Board invites you for the interview, it is a very positive sign, and in most cases, the in-person interview is just a formality they go through just to get to know you a bit and tell you a few specific points about the building and their Coop.
The Board might give you their decision even during the interview, but often they will contact the management association within a day to a week, to give their formal decision.
The management association will contact me and the attorneys to let us know the Coop Board decision, and hopefully, their approval.
Closing Procedures: 3-7 days usually
Once we have the Board's approval, the management association will send a formal document to the attorneys with certain conditions and requirements for the closing.
A closing date will be scheduled.
The attorneys will finalize their documents for the closing.
Your attorney will prepare and send you the closing instruction and a list of the checks, and/or amount of the wire you will need to cover all closing costs. Usually, this would happen the day before the actual closing. But with Covid, the wire might need to be done sooner.
For the closing, we usually either meet at the sellers' attorney's office or at the management association's office. They will let us know.
I usually attend the closing with my clients, but with Covid, the attorneys and management association may not allow me to be there, unfortunately. We will see.
The closing for an all-cash transaction should happen pretty quickly, around 1-2 hours. When the closing is finished the sellers' attorney will hand you the keys to your new place!
I know this is a lot, but I hope this helps. See you at 1 pm.
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Fernando Branco, GRI, ABR, CNE
Lic. Assoc. Real Estate Broker
Residential Real Estate
Commercial Sales & Leasing
Graduate Realtor Institute (GRI)
Accredited Buyer Representative (ABR)
Certified Negotiator Expert (CNE)
R New York
641 Lexington Ave, NY NY 10022
c: (212) 321-0115
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