Skip to main content
Fulltext search
FILTER RESULTS BY:
RECOMMENDED IN RENT
Moving to NYC after college? Here's how to find a rental apartment
RECOMMENDED IN BUY
How buying real estate in NYC is unlike anywhere else
RECOMMENDED IN SELL
A guide to using a no-fee renovation loan from a NYC real estate firm
RECOMMENDED IN IMPROVE
How to make your NYC renovation more pet-friendly
BEST REAL ESTATE WEBSITE!
National Association of Real Estate Editors
BEST REAL ESTATE WEBSITE! National Association of Real Estate Editors
Brick Underground
Social Links
follow:
  • Facebook
  • Twitter
  • Instagram
  • Flipboard
  • search
Brick Underground
☰ Brick Underground
Brick Underground
Brick Underground
☰
Brick Underground
  • Buy
    • Buy
    • The Market
    • Investing
    • New Construction + Condos
    • Affordable Housing
    • Co-ops
    • Negotiating + Financing
    • How to Buy in NYC Guide
    A rendering of the roofdeck at 55 Broad Street.
    Rent
    Housing lottery launches for 143 apartments in the Financial District
    Aerial panoramic view of Red Hook, Staten Island, Brooklyn, and Verrazano-Narrows Bridge
    Sales Market
    24 NYC neighborhoods where median prices more than doubled in the past decade
    431 West 54th Street is a co-op building that allows subletting.
    Investing
    Want to buy an investment apartment to rent out? Here's what you need to know
  • Rent
    • Rent
    • Affordable Housing
    • Roommates + Landlords
    • The Market
    • The Search
    • How to Rent in NYC Guide
    Young woman using laptop at new apartment, with moving boxes around.
    Roommates + Landlords
    Didn't get your security deposit returned in NYC? A new chatbot can help
    A rendering of the six-story building in Park Slope.
    Affordable Housing
    Housing lottery launches for 45 rent-stabilized units in Park Slope
    Laura and her dog Jack
    Rent
    Why I moved to NYC from Brazil: I relocated for work and reunited with friends I made 15 years ago
  • Sell
    • Sell
    • Staging + Open Houses
    • Negotiations + Closings
    • Getting Ready
    • How to Sell in NYC Guide
    Aerial view of downtown Brooklyn
    Sell
    Median sales price in Brooklyn climbs to $995,000 in the second quarter
    Downtown New York City
    Sell
    Manhattan deals rose to highest level in nearly two years, defying national trends
    new condo building and older co-op buildings in Prospect Heights, Brooklyn
    Sell
    Brooklyn median price nears $1 million but the spring market is a question mark
  • Live
    • Live
    • Neighbors
    • Kids + Pets
    • Neighborhood Intel
    • Products + Test-drives
    • Troubleshooting
    FlatRate moving brick underground
    Live
    How to troubleshoot your move in advance
    Sponsored By flatrate
    Distressed woman sitting in her apartment
    Troubleshooting
    Ask Altagracia: My live-in partner is abusive. How can I get out of my lease?
    Sponsored By Outerbridge Law P.C.
    NYC apartment buildings with fire escapes
    Neighborhood Intel
    Can you sit on a fire escape in NYC? 5 things to know
  • Improve
    • Improve
    • Small Spaces
    • Small Projects + DIY
    • Renovations
    • Design + Architecture
    • Products + Services
    • How to Renovate in NYC Guide
    mini splits apartments new york city
    Products + Services
    Yes, you can install central AC in your co-op or condo unit. Here's how
    image
    Products + Services
    Take back your deck! How to win the war with mosquitoes and enjoy outdoor living again
    NYC apartment building with AC units
    Products + Services
    My neighbor's dripping AC is driving me crazy. What can I do?
  • Boards & Buildings
    • Boards & Buildings
    • Boards
    • Finance
    • Insurance
    • Legal
    • Property Management
    • Structure & Systems
    • Sustainability
    Burned and Boarded Up Windows
    When should your board hire a public adjuster?
    Manhattan GM
    What should we consider when renewing insurance for our building?
    Facade of NYC buildings
    How much is insurance on a NYC co-op or condo building?
  • Advertise
    • Advertise with us
    • Sponsored Content
    • Experts
    FlatRate moving brick underground
    Live
    How to troubleshoot your move in advance
    Sponsored By flatrate
    Distressed woman sitting in her apartment
    Troubleshooting
    Ask Altagracia: My live-in partner is abusive. How can I get out of my lease?
    Sponsored By Outerbridge Law P.C.
    Building facades in New York in winter
    Roommates + Landlords
    Ask Altagracia: I withheld rent due to inadequate heat and I'm being hassled to pay it back. What should I do?
    Sponsored By Outerbridge Law P.C.
  • Brick Report
  • About Us
  • About Us
The subscription service is currently unavailable. Please check again later.
Fulltext search
FILTER RESULTS BY:
New Main menu
  • Buy
    • Buy
    • The Market
    • Investing
    • New Construction + Condos
    • Affordable Housing
    • Co-ops
    • Negotiating + Financing
    • How to Buy in NYC Guide
  • Rent
    • Rent
    • Affordable Housing
    • Roommates + Landlords
    • The Market
    • The Search
    • How to Rent in NYC Guide
  • Sell
    • Sell
    • Staging + Open Houses
    • Negotiations + Closings
    • Getting Ready
    • How to Sell in NYC Guide
  • Live
    • Live
    • Neighbors
    • Kids + Pets
    • Neighborhood Intel
    • Products + Test-drives
    • Troubleshooting
  • Improve
    • Improve
    • Small Spaces
    • Small Projects + DIY
    • Renovations
    • Design + Architecture
    • Products + Services
    • How to Renovate in NYC Guide
  • Boards & Buildings
    • Boards & Buildings
    • Boards
    • Finance
    • Insurance
    • Legal
    • Property Management
    • Structure & Systems
    • Sustainability
  • Advertise
    • Advertise with us
    • Sponsored Content
    • Experts
  • Brick Report
  • About Us
    • About Us
    • Advertise
  • About Us
SUBSCRIBE TO OUR NEWSLETTER →
Social Links Footer
  • Facebook
  • Twitter
  • Instagram
  • Search
Sell [ SPONSORED ]

Sellers: Here are 6 tips for crafting an (almost) airtight deal

By Adam H. Stone, Esq.  | May 6, 2013 - 9:56AM
image
SHARE:
Share to Facebook
Share to Twitter
Print
More...

In a frenzied real estate market in which many New York City co-ops and condos are drawing multiple offers, it can be tough to resist the highest offer--and to remember that, even now, having to start over with a different buyer can translate into lost time and money, uncertainty, and price cuts to combat the stigma of a listing perceived as “stale.” 

It is important to choose the right offer--and to structure the contract carefully--to get the deal done the first time.   

As a transactional real estate attorney, I recommend to all my clients that, to the extent possible, they take these steps to increase the odds of a successful closing:

1. Find an all-cash buyer

In the tight-credit environment that still haunts New York City’s housing market, the number one reason deals fall through is financing. The bank won’t approve the borrower, the bank discovers a perceived problem with the building, or the apartment doesn’t appraise as high as expected – especially in a rising market like this.

While there are other ways to deal with financing uncertainties (see #2 below), the most surefire way to avoid them is to find a buyer who can pay all cash—even if you have a higher offer on your apartment from a buyer seeking financing.

2.  Do not agree to mortgage contingencies or funding contingencies

In recent years, buyers have been asking sellers for both mortgage contingencies and funding contingencies.

A mortgage contingency enables a buyer to walk away with their deposit if the bank doesn’t approve the loan within a certain time frame (usually 30 to 45 days from a signed contract). A funding contingency may allow the buyer to walk away if the bank decides not to fund the loan at any time up to the actual closing date and for any reason (or for more limited reasons, depending on the negotiated terms)—such as a problem with your building or an unexpected change in lender’s own lending guidelines.

Where the buyer will not agree to waive a funding contingency, some sellers have begun requiring the buyer to use lenders that have recently issued mortgages in the building, reducing the risk that the lender will have a problem with the building itself.

If your buyer balks at giving up a mortgage contingency, one compromise to consider is a reduced or low appraisal contingency clause. You and your buyer agree that if the appraisal comes in too low for the amount of the loan--a growing risk in a rising market and especially when a property goes for more than the asking price in a bidding  war--the buyer will make up the difference in cash and accept a lower loan amount from the lender.

For example, the buyer of a $1 million apartment seeking 80% financing of $800,000 will only be able to obtain the loan if the appraisal comes in at $1 million. If it comes in at $950,000, the lender will only loan 80% of the appraised value ($760,000).  With a reduced appraisal contingency, the buyer must  add $40,000 more equity into the deal instead of being able to cancel and get the deposit back.

3.  Make sure your buyer is qualified to pass your co-op board

If you’re selling a co-op, find out your board’s requirements in advance of listing your apartment and make sure your prospective buyer meets them. 

Sometimes the requirements are in writing and can be obtained from the managing agent  You can also phone the managing agent and/or the board president and simply ask what type of candidate you should present to them for the smoothest outcome.

To feel confident that your buyer meets financial requirements, ask for W2s and financial statements to be submitted with their offer.

4.  Research the status of your title

You will be required to deliver “good title”  at your closing with no outstanding liens or judgments. To really play it safe, before you list your apartment, run a title search on your apartment to make sure the only liens on your property are the one or two loans you have.  (You can find a so-called “abstract company” online to do this for a few hundred dollars or have your attorney arrange for it.)

One title issue that sometimes arises has to do with refinancing, in which the lien originally filed by the old mortgage bank doesn’t get terminated properly.  It can be time consuming and costly to try to re-do this work. And, if the bank doesn’t exist anymore, getting the lien terminated is a time consuming and logistical nightmare. 

5. Inspect your own apartment

Make sure everything works and is in good repair in your apartment—from the central air conditioning, to the dishwasher to the electric outlets. If you have a leaky pipe, get it fixed now so that there are no issues before closing from damage that occurs after you sign the contract. 

Make sure the contract specifies that the apartment is being sold “as is.”

6. Locate the original stock certificate and proprietary lease

If you have a mortgage loan to pay off, your lender will have these. If you don't, you should make sure you have located both well before the anticipated closing date.  A lost stock or lease could result in the coop requiring a bond to be posted--costing 1% to 3% of the sales price--which you certainly don't want to pay for. And it could delay the deal significantly, which could result in complications giving the buyer the right to cancel.


Real estate attorney Adam H. Stone, Esq., has been representing buyers and sellers of NYC property for over 15 years.  He is a partner in the law firm Regosin, Edwards, Stone & Feder.

Also by Adam Stone:

What's included--and what's not--when you buy a NYC apartment

3 questions you (and your lawyer) should ask before buying a NYC apartment in a post-Sandy world

12 tips for buying new construction with confidence

Why you might want to buy your next apartment under an LLC--even if you're not famous

Brick Underground articles occasionally include the expertise of, or information about, advertising partners when relevant to the story. We will never promote an advertiser's product without making the relationship clear to our readers.

topics:

selling
SHARE
TWEET
BRICK’S PICKS
NYC apartment building with AC units
My neighbor's dripping AC is driving me crazy. What can I do?
Historic brick facades of NYC apartment buildings
Getting overcharged by a landlord? Here’s how the Tenant Protection Unit helps rent-stabilized tenants
Apartment buildings in Soho
New Rent Guidelines Board report justifies a rent freeze, tenant advocates claim
Brooklyn apartment buildings
Understanding net effective rent: Here's how to calculate your real monthly rent
image
How much should you renovate your NYC apartment or house before selling?
Council Member Shahana Hanif hold press conference before the City Council vote on Arrow Linen spot rezoning.
City Council signs off on 10-story towers for Arrow Linen site
Follow Brick on Instagram
@brickunderground | #brickunderground
Brick UndergroundBRICK UNDERGROUNDREAL LIFE. REAL ESTATE. REAL NEW YORK.
Social Links Footer
  • Facebook
  • Twitter
  • Instagram
  • Search
Main menu footer
  • Buy
    • The Market
    • Investing
    • New Construction + Condos
    • Affordable Housing
    • Co-ops
    • Negotiating + Financing
    • How to Buy in NYC Guide
  • Rent
    • Affordable Housing
    • Roommates + Landlords
    • The Market
    • The Search
    • How to Rent in NYC Guide
  • Sell
    • Staging + Open Houses
    • Negotiations + Closings
    • Getting Ready
    • How to Sell in NYC Guide
  • Live
    • Neighbors
    • Kids + Pets
    • Neighborhood Intel
    • Products + Test-drives
    • Troubleshooting
  • Improve
    • Small Spaces
    • Small Projects + DIY
    • Renovations
    • Design + Architecture
    • Products + Services
    • How to Renovate in NYC Guide

Get more news you can actually use...

Email Address

Delivered to your inbox weekly - for free.

*By signing up you agree to receive occasional emails on behalf of our sponsors

Footer Menu
  • About Us
  • Advertise

Copyright 2009-2024 by BND Ventures Inc | Privacy Policy | Terms of Service | Ad Choices | Login