Selling an apartment in Manhattan involves a complex series of events. Accurately estimating how long the process will take is difficult.Below you will find a brief description of what to expect when I put your apartment on the market, and the length of time everything should take. Under normal circumstances, the process can take eight to fourteen weeks from the start to finish.Coops take longer to sell than condos because of the board process. Mortgages take 4 to 6 weeks for buyers to obtain.Therefore, selling to a buyer who doesn't require a mortgage can save a lot of time.
TIMETABLE
Activity
Estimated Time
Average Time
Pre-marketing
3-7 Days
5 Days
Marketing
Duration of showing your apartment
Same
Showing your apartment to buyers
7 - 56 Days
35 Days
Negotiating with the buyer(s)
1 - 5 Days
2 Days
Getting the contract out
1 - 5 Days
3 Days
Negotiating with the lawyers
1 - 5 Days
3 Days
Application/board package/mortgage
20 - 30 Days
21 Days
Board response
14 - 28 Days
21 Days
Scheduling the board interview
3 - 21 Days
7 Days
Board decision
1 - 5 Days
2 Days
Closing date
5 - 14 Days
7 Days
Total:
56 Days - 176 Days
106 Days
Note: If there is no mortgage involved the process will be shortened by 2-4 weeks
A Realtor® is a broker or agent who is a member of the Realtor® Association of America, the largest professional association in the country. As a member of this association, I must abide by a strict code of ethics, rules and regulations providing clients with the highest degree of professionalism and expertise in the industry. Most real estate agents and brokers in Manhattan are not Realtors®! If you already have a broker or agent in mind, find out if they're a Realtor®
By the way, many people confuse agents with brokers and they are not the same. An agent requires supervision from a broker whereas a broker is licensed to work independently. Brokers and agents can and should be members of the Realtor® Association of America. I am an associate broker which means that I am a licensed broker associated with Coldwell Banker Hunt Kennedy, a top agency in Manhattan. And, I am a member of the association.
The first step in selling property in Manhattan is to locate an experienced, hard-working broker who will make the selling process as painless as possible and sell your property for the most money in the shortest time period.You can count on me to do just that.
STEP 2: FINDING THE RIGHT LAWYER IS CRITICAL; A BAD LAWYER CAN KILL THE DEAL. There are "deal maker" and "deal breaker" attorneys. Make sure the attorney you hire is an experienced Manhattan real estate attorney who can be relied upon to make the deal happen. If you get an attorney to work for you - even free - who is unfamiliar with real estate transactions in New York City, it could cost you the deal.
STEP 3: SETTING THE OPTIMUM PRICE FOR YOUR APARTMENT My loyalty will not be divided. I'm not one bit interested in the buyer getting a deal. My fiduciary responsibility is to you. I will make sure that you get the most money in the shortest period of time possible. In order to do this, we need to price your apartment correctly.
First, I'll present a Comparative Market Analysis and share current market conditions with you. Depending on variables such as the market, the condition of the apartment and the view, you are usually best off pricing your apartment slightly higher than previous sales in your building and slightly under apartments currently available in your building.
Do not make the mistake of going with a broker who gives you the highest perceived market value.An apartment will sell for what the market is willing to pay.Therefore, first pick the real estate agent that you believe will do the job to your satisfaction.Then, together, we'll decide on the pricing strategy.
THE PRICING MYTH: It's best to price your apartment higher than you expect to sell it for because the buyer is only going to negotiate your price down, and you can't negotiate up.
If an apartment is worth, hypothetically, $8 and it is priced a bit higher at $10, the people who see it will be comparing it to $10 apartments, and if it's not worth it, that's exactly what educated buyers will say.Meanwhile, people shopping for an $8 apartment won't see it because it's advertised as a $10 apartment. In this example the only people who will see the apartment are the wrong buyers.
One winning strategy is to price the apartment slightly under its market value in order to bring many buyers into the fold.This will provide you with a choice of buyers.And, if you have a tough coop board, you will want to pick the best buyer, not the only buyer.
This strategy is also likely to create a bidding war.When this happens, it's common to get more than your original asking price.
Whatever price we pick, if a buyer doesn't come through within the first few weeks, more often than not it's because it's priced incorrectly.The word insanity is defined as doing the same thing over and over again, and expecting different results.Chances are, if 50 -100 people view the apartment and don't offer a bid, another 50-100 people won't offer a bid, either.Instead, the apartment that was worth $8, but was on the market for two months at $10 without any takers, will need a serious price reduction, perhaps as low as $7.
• Send postcards to your building notifying them that your apartment is for sale
• Prepare ads for The New York Times and their website.
• Host open houses (for brokers and buyers)
• Dedicate as much time as needed to show your apartment
STEP 6: RECEIVING AN OFFER I will present all offers to you, along with basic information about the buyer. I will also provide financial information about the buyer.
Upon receiving an offer, you can do any of the following: • Accept the offer • Counter the offer • Decline the offer
What ever you choose to do, it is customary to respond with 24 hours.
All offers will include the following: • The price • A proposed closing date • Inclusions or exclusions of property in the apartment, such as fixtures or air conditioners • Mortgage contingency status • The percentage of the contract price needed to be financed
Most condos require a minimum of 10% down, and the majority of coops require a minimum of 25% down. In other words, most condos allow your buyer to finance up to 90% whereas the majority of coops allow your buyer to finance up to 75%. In addition, most coops want to see that your buyer will have a minimum of $50,000 in liquid assets after the purchase of the apartment.
Important: While most condominium associations accept financing of up to 90%, mortgage institutions are not obligated to offer such a high mortgage. And there are many buildings that mortgage institutions will not offer a mortgage of 90%, regardless of your personal wealth. In such an event, a mortgage institution is likely to offer a mortgage of 75% or 80% of the contract price. If such an event takes place, the buyer may choose to take out a second mortgage, otherwise known as a subordinate mortgage.
MORTGAGE CONTINGENCIES "Mortgage contingency" simply means that the purchase of an apartment is contingent upon getting a mortgage. When the buyer signs a contract for an apartment (coop or condo) in Manhattan, a deposit of 10% is required. In a seller's market, buyers are often required to waive their mortgage contingency, meaning that that the seller would be entitled to keep the buyer's deposit if the buyer was unable to obtain necessary financing. Had the buyer been turned down from even a single mortgage company and not waived his/her mortgage contingency, he/she would have been able to be released from the contract without losing the deposit or suffering any further penalties. The seller would then have to start the process all over again.
Unfortunately in Manhattan it usually takes a few weeks to get a commitment letter or notification of a mortgage from a mortgage institution. It also takes time negotiating with buyers. And from the time the contract was signed, to the day you learned your buyer was unable to obtain a mortgage, the apartment was off the market.
While there clearly is an advantage for the buyer to not waive their mortgage contingency (thereby not putting their deposit at risk), by doing so, the buyer's bid will be more compelling to the seller and give this buyer an advantage over any buyer not willing to waive their mortgage contingency.
If the buyer is absolutely confident that either a satisfactory mortgage can be obtained or funds for the apartment will be available, the buyer may choose to submit a non-mortgage contingency. This is makes the offer much stronger, and now this buyer will have an advantage over buyers that require a mortgage contingency. Sometimes this is the difference between getting the apartment and not getting the apartment.
In other words, by placing a non-mortgage contingency, the buyer bets the 10% deposit that a satisfactory mortgage can be obtained. For you, as the seller, a non-mortgage contingency reduces the risk associated with the buyer applying for a mortgage. If you receive two offers at approximately the same price, and one of the offers has a mortgage contingency, you will probably choose to go with the non-mortgage contingency offer.
When you accept an offer, the following events will immediately occur. I will formally submit a document to the agents and lawyers that includes the five elements of the offer, you and your buyer's social security numbers, telephone numbers, fax numbers, email addresses, and contact information for the agents and attorneys.
The two attorneys will introduce themselves to one another and negotiate the terms of the contract.
I will provide a copy of the offering plan or prospectus, any amendments that may have occurred, and the last two year's financial statements to the buyer's agent who, in turn, will submit this information to the buyer's attorney. All of these items you will have given me when you signed the listing agreement. If you do not have this information, contact your property agent.
THE SURPRISING NEWS ABOUT ACCEPTED OFFERS: An accepted offer means that both parties, at the time of the acceptance, "intend" to enter into a transaction with one another. However, the buyer is likely to continue shopping for other apartments and, as a result, I need to continue showing your apartment until the contract is signed because the verbal agreement is not enforceable. Once both parties sign the contract, the deal is final and considered fully executable.
Important: The contract is not enforceable when you have a verbal agreement. Once both parties sign the contract, the deal is final and considered fully executable.
STEP 9: THE CONTRACT OF SALE Once you have accepted an offer, your real estate attorney will prepare the contract of sale and forward it to the buyer's real estate attorney for the buyer's signature. Once signed, it will be sent to you to sign.
Immediately after the contract has been signed and the mortgage, if sought, has been applied for, the buyer and the buyer's agent must prepare the board package for my approval. The buyer will be required to complete the application within approximately 30-45 days of the signed contract. If a mortgage is sought, the commitment letter must be included with application.
Once completed, the buying agent will submit it to me for my review. Upon my approval, the buying agent will submit all appropriate copies to the property manager who, in turn, will distribute copies to the board of directors or board of governors, depending on whether it is a coop or a condo, for their approval.
IMPORTANT: Failure to submit the board package in a timely manner can result in a breach of contract. If this occurs, your buyer may be in jeopardy of breach of contract and possibly lose all or part of their deposit.
Coop boards and some condo boards require detailed information about the prospective buyer, including but not limited to: • Contract of Sale • Completed Application Form • Previous two year's tax returns • Current buyer W-2 or Income projections • Letters of recommendation (personal and/or business) • Reference letters from their bank and/or landlord • An assets and liability statement • Copies of bank and brokerage statements • Acknowledgment of the House Rules • Checks for credit reports, move-in deposits, etc.
The sale of a coop is conditional upon the coop board approving the purchaser.
Boards may refuse a prospective buyer without disclosing cause. In addition to making judgment on the financial status of the prospective buyer, they may also make a determination as to whether the prospective buyer would be a suitable neighbor. Do not underestimate their power. If your board declines your buyer's application, you have no recourse.
The sale of your condominium is conditional upon the Board of Governors waiving their right of first refusal. Basically, if they turn down your buyer, they will purchase the apartment from you at the contract price. This rarely happens. However, the process of them waiving their right of refusal can take anywhere from 2 to 4 weeks.
The closing is ordinarily held at the office of the co-op's attorney, managing agent, or at the financial institution's law firm. You, your attorney, the buyer, the buyer's attorney, the lender's attorney, a representative from the managing agent's office, and the real estate agents involved (me) all attend. At the closing, you will sign documents and receive checks.
After all the documents have been signed (this usually takes about an hour and a half) and all check have been distributed, you will present the apartment keys to your buyer and celebrate. Congratulations!
Back To: Apartments in Manhattan Lee Presser, Associate Broker - Cocoran Group 2253 Broadway. New York, New York, 10024 - Office: (347) 829-9996