When working with first-time-buyers in New York City, one of the first questions to come up is usually, "How long will this take?" Depending on the market and client situation, the answer to this question varies. However, here's a guideline for the steps involved and a general timeline.
Enlist the help of a real estate broker
Usually happens in week 1 to week 3 of the initial search. If you have a referral for a good broker you'd like to work with, you can get them involved from day one. If you're unsure, many people visit a few open houses on their own to get an idea of the market and meet different brokers to see who they "click" with.
Talk to a mortgage broker, bank or financial advisor
Usually happens in week 1 to week 3. Before you get too involved in looking for properties, you'll want to have a realistic idea of what you can afford. And if you do find a property you'd like to submit an offer on, you'll need a pre-approval letter from a mortgage professional to include with your offer. If you're unsure about who to go with, your real estate broker will have some recommendations.
Hire a real estate attorney
Can happen anywhere from week 1 to several months in. It's helpful to know what attorney you're going to use as early as possible, but the reality is that many people do not hire a real estate attorney until they have an accepted offer on a property. (This is the point where the attorney jumps to action and does their "due diligence" on a property to ensure all is well before you sign a contract.) Again, if you need some references, your broker will be able to recommend a good attorney.
Find your property
Usually takes 1 to 3 months. Some people find a property they love on day 1, others look at 100 places before they're ready to commit. And, depending on the market (at the time of writing this article, low inventory is causing very high competition among buyers), you may get the first few properties you put an offer on. Patience -- and a good real estate broker who knows how to navigate a competitive market and structure a winning offer -- is key.
Usually takes 3 days to 2 weeks.
Sign the contract
Usually takes 3 to 10 days. As mentioned above, once your offer is accepted, your real estate attorney will complete "due diligence" before you sign the contract. When an attorney does their due diligence, they're looking over the building's offering plan, checking the building's financial statements, and reading minutes from board meetings to make sure there are no large assessments coming up or anything else you need to know that may affect your decision to purchase. Once your attorney is satisfied and has explained any potential risks to you as a buyer, you'll sign the contract and write a check for 10% of the purchase price for your deposit, which goes into an escrow account until closing.
Apply for a mortgage and receive a Commitment Letter from your lender
Usually takes 3 to 6 weeks. This can be a fairly lengthy and tedious process, as the bank will need a lot of supporting paperwork in order to approve you for a mortgage, and the underwriters often have a lot of applicants waiting in line for approval. Typically, it takes about 45 days to receive commitment from the lender.
Complete your Board Package or condominium application
Usually takes 10 to 20 business days (often must be done within 3 days of receiving your commitment letter). For more information on this process, check out my article on how to complete a board package.
Submit your Board Package for review
Usually takes 1 to 4 weeks. Depending on how the board for the building you're purchasing in operates -- every one is different -- this can take a few days to several weeks. Condos are usually quicker than co-ops, but there are no guarantees. Be prepared to wait up to 30 days for approval.
Interview with the Co-op Board
Usually takes 30 minutes to 1 hour. (If you're purchasing a condo, you get to skip this step!) For more information on this process, check out my tips for passing a co-op board interview.
Receive board approval
Usually takes 1 day to 1 week from time of the Board interview.
Schedule the closing
Usually occurs 1 to 2 weeks after Board approval. There are a lot of players that need to be present at closing -- buyer, seller, buyer's attorney, seller's attorney, bank attorney (if financing), closing agent (if purchasing a co-op), and title closer (if purchasing a condo). It can take some time to coordinate schedules, so be prepared.