Details on how to buy a condo/co-op real estate: The Dummies Version
May 12, 2014 7:05 AM   Subscribe

Filter: NYC version or competitive real estate market. I am trying to understand the time table for each step of the process.

I have talked with a friend about the process of buying real estate. I have also read previous previous ask me questions about this and found useful info, such as this article about buying property in NYC.

However, even though I have read through this information, there are still many unknowns. If someone could explain more details, then I think that I could figure this out and move forward.

Most of my questions revolve around timing and anxiety with the whole process (anxiety because to me this is a lot of money, and I could potentially pick the wrong place).

Some of the questions that I have and that I can't understand after having read these articles are as follows, so if you have gone through this process, could you explain this to me in very basic terminology?

I have broken this down into specific questions, but a longer version: I am not familiar with what the process means and I have anxiety around the unknowns, especially the timing.

General questions:

-I did read that after a potential buyer expresses interest in the property, it proceeds onward to contracts and reviews by a lawyer, etc., review by a coop board/condo board, etc. My main concern is: How long does this generally take? So if one wants to move into a new place a few months from now or a year from now, when should the person ideally start looking with anticipation of (a month, 2 months, 3 months?) the lag in time to review the material. In general how long does this take? Is there an average time or does it vary wildly (ie, some people will take a month, whereas others will take 6 months).

-Is there any additional info about a tight real estate market that I should know that will make this process even more challenging (ie,I should add in another month to the review process, or I should anticipate that 10 pple will bid on a property, or I should make an offer that same day?) My challenge is that I plan to go on the low end of the market, probably $150 to 250 K max, even if I qualify for higher loans. My fear is that this will mean tons of competition at this end of the market.

-General anxiety about the entire process. Another part of my anxiety about this is that I currently live in a neighborhood that I enjoy (UWS), but if I want to buy property in those price ranges it will mean moving to Inwood/Washington Heights/Astoria, and I do not know much about those areas and buying is significantly different than renting. So if you moved to a different neighborhood to buy, what was that process like? (ie, you checked out the neighborhood for a few weeks/walked there every other week/spent X hours there/week). The gap in my mind is that even if I see something that I want to buy, it would be better to spend time around that neighborhood, too, and I am wondering if I should add time to do this, too (ie, does this mean getting to know a neighborhood for a month or so, and then looking at places and making an offer).

Apologize in advance, if I can understand these steps, then I can wrap my head around it and plan accordingly.
posted by Wolfster to Home & Garden (10 answers total) 10 users marked this as a favorite
Best answer: First a word of caution: New York City's real estate market is very different from most others' so make sure you understand that when you read about real estate or see peoples' responses here.

Second: your real estate broker and attorney (who are two separate people) should be able to guide you through the process and answer all of these questions. If you're not getting satisfactory answers to your questions from one or both of these people, you should find different ones.

As for addressing your specific questions:

1) Co-op/condo board approval/review varies from building to building; your real estate broker should be informed about the various buildings' boards for which he or she sells apartments and give you the answer.

2) You're correct that it is a tight real estate market in NYC; it's a sellers' market which means the sellers often get close to asking, if not a premium. It also a market that favors cash buyers (i.e., people who do not have to take out a mortgage to finance their purchase) because those tend to be smoother and so more preferable for the seller (no need to wait around for the buyer's mortgage company to approve everything, etc.) Also, co-op and condo boards like all cash purchases for obvious reasons.
posted by dfriedman at 7:33 AM on May 12, 2014

Best answer: -I did read that after a potential buyer expresses interest in the property, it proceeds onward to contracts and reviews by a lawyer, etc., review by a coop board/condo board, etc. My main concern is: How long does this generally take?

The time between having a bid accepted and closing is typically 90 days, assuming a reasonably laid-back co-op board. My process took about 2 months to close, and this was considered essentially unheard of among my friends and relatives who bought real estate in the city.
posted by deanc at 7:41 AM on May 12, 2014 [1 favorite]

Best answer: I bought a place that more or less fits your parameters a couple years back, though in Brooklyn not Manhattan. I first viewed the apartment in March and closed in August, so about 5 months end to end, though I was probably a little slow to make an offer. I think the time can vary a lot, since there are so many steps involved (and co-op boards in particular can be slow-moving).

One problem I had when looking at inexpensive places is that sometimes I was up against buyers who could pay all cash, whereas I needed a mortgage (which, obviously, I did qualify for). That sucked but became clear pretty early on. Boards may also require more of a down payment than the bank would. I myself put down 25% which seemed to placate them; I think they wanted 20% though who knows if they would have negotiated.

I haven't lived in Inwood/Washington Heights/Astoria but I have spent some time in each of those places. I would recommend taking some time to get to know the areas. In particular, although they are all places with a bunch of young professionals these days, I would say Astoria strikes me as a bit different from Inwood/Washington Heights, so maybe try to narrow down which you prefer. (You may also want to check out Jackson Heights if you're amenable to Queens; my friend bought a nice apartment in a building with a courtyard within your price range, pretty near to the 74th Street subway stop). Maybe you could schedule some time around going to view apartments. It's also a good idea to check out the neighborhood at night, just to make sure you feel safe. (My walking-around self says, those neighborhoods all feel totally safe! but my day-job law-enforcement self would urge you to get a sense for yourself, since some areas, particularly within Washington Heights/Inwood are more high-crime than others.)

A good idea, which I unfortunately didn't really follow myself, is to attend lots of open houses/schedule lots of viewings so you can get a sense of what different apartments are like in your price range.

You will definitely want to hire an attorney for the process, as well as an engineer to inspect an apartment where your offer is accepted. I have some names, including my own, which were great, if you want suggestions. As dfriedman says, you can also ask a real estate broker many of your questions. I personally did not have my own real estate broker; while the seller's realtor was helpful to me and our interests more or less aligned, I did always bear in mind that I wasn't her client--i.e. I would ask her about the co-op's requirements and other specific logistical questions, but not much more than that.

Feel free to memail me if you have any other questions you think I could help with; I love talking about this stuff (to the likely despair of friends and family).
posted by mlle valentine at 7:45 AM on May 12, 2014 [2 favorites]

Best answer: I just closed on selling my co-op in Brooklyn on Friday.

I would advise against counting on a certain date to move in (that is, telling your currently place you'll be out). At basically any point, the seller can decide not to close and then you're SOL if you told your landlord you'd be out on the 31st.

As far as putting an offer down on a place, you need to be ready to do that the day you see the place. Every open house I had, there were multiple offers. Most fell through, but our selling agent got them on the way out of the apartment.

Not sure if you've been reviewing property prices but $150 to $250K is really, really on the low end: it's roughly how much my place sold for and I live just a bit up from Coney Island. Perhaps things are cheaper where you're looking, but I seriously doubt it unless you're willing to live where I am trying to leave.

I would absolutely never move to a neighborhood I didn't know well, but that's me. There's enough variables with the apartment and immediate neighbors themselves that I wouldn't want to risk the neighborhood being shitty as well.

Also mlle valentine is hella helpful.
posted by griphus at 8:00 AM on May 12, 2014

Also, just as a point of reference: we sold the co-op and are now looking for a place to rent for a year while we look for a different co-op to buy. My original plan was the use the 90 days of stay past close on our contract to close on a place but I was way, way off on the timeline there.
posted by griphus at 8:03 AM on May 12, 2014

Best answer: Sorry, last thing: from the offer to the closing, it was about five months. There were a couple of minor hiccups, so if it had gone flawlessly it would've been around 3-4.
posted by griphus at 8:06 AM on May 12, 2014

Best answer: 1. Like others said, usually 3-4 months between making an offer and closing.

2. We're looking in a different and possibly more competitive neighborhood, but the competitive market absolutely changes the approach to making an offer. Most properties I've looked at only have one or two open houses, and have a couple of offers on the table the same day. They will expect a "best and final" offer the same week. That means that there's no back-and-forth or negotiating, every offer is basically a blind auction between you and a handful (or more) other buyers. We generally offered the most we could afford on any property that we liked (usually around 5% over ask) . And we made 12 offers before one was accepted. There are just an absurd number of people out there willing to make all-cash offers, or forgo the financing contingency.

Feel free to memail if you want to chat - we're currently at the stage where we've had an offer accepted but have not yet signed contracts.
posted by twoporedomain at 2:25 PM on May 12, 2014

Best answer: One of the things I didn't realize when buying a condo in a Chicago suburb was how much the condo board really mattered. I'd recommend finding out as much as you can about the board (are they in good fiscal shape? Are they stickler for ticky tacky rules? do have a long term plan for replacing items, or do they special assess as each thing happens)?
posted by garlic at 4:51 PM on May 12, 2014

Response by poster: I just wanted to say thank you to everyone for replying to my questions. Every single person gave an answer that was helpful and gave more insight to me (3 to 5 months as am average from bid to close? 12 offers before one was accepted? All cash?). I will say that I have read articles, but still did not make the connect as to what reality was.

I will likely be following up with a few of the people that said I could memail them for more info.

Thanks again, everyone!
posted by Wolfster at 9:21 AM on May 13, 2014

Best answer: Related to garlic's answer - There is a column in the Chicago Tribune real estate section on Sundays called Condo Adviser that is a lawyer answering questions relating to the state condo laws. You can get real insight into how weird and complicated condo boards and residents can be.
posted by srboisvert at 11:46 AM on May 13, 2014

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