Selling an apartment in New York City can be a mystifying and complex process even for the most engaged owner. The reasons vary from identifying pricing strategies in different hyperlocal neighborhoods of Manhattan, Brooklyn & Queens markets to the strictness of co-op boards (as co-ops comprise the majority of NYC housing stock).
Knowing the standard protocol of the selling process is a good first step in unlocking the mysteries of selling in New York City.
Before listing your home for sale it would be wise to consider interviewing 2-3 professional agents; preferably someone who is referred by a family member or friend, or using a service such as 3for3for3 that you are on right now.
The top 3 takeaways you should get from interviewing agents are:
At the end of the day, every building in New York City behaves like its own little micro market. This would be great if there is a high volume of sales and we can easily see what other “two bedrooms” or “studios” traded for recently. But alas, that is typically not the case as building sales volume is often light & stale, adding to the complexity of “pricing right”.
Congrats, you agreed on a professional listing agent and your property is now on the market. Typically sellers of co-ops and condos will sign a 180-day exclusive listing agreement with a professional agent; so expect a 6-month commitment when procuring the services of a professional real estate agent.
The first four weeks will be the most telling of your entire listing period. This is where your job is to “listen” to what the market is telling you regarding your pricing strategy.
Buyers will always dictate true market value and its the job of the listing agent to report back to you items such as:
It is common for sellers to have to reduce their price to better compete with other similar listings on the market. If you hire a professional agent, they should be the ones to explain when to consider lowering your price and by how much.
When a reasonable offer comes in, you will begin the negotiation phase. Every offer received should be pre-qualified by your listing agent, but in the event it isn’t or you decided to sell FSBO, here are the things you should look out for:
Assuming all of these risks are mitigated, you and your agent will discuss the offer and strategies to consider when responding. If you are successful in reaching an agreement on price & terms you will proceed to the next step in the process - the legal (contract) phase.
It is up to the seller to provide the following documentation to the Buyers Attorney to begin the due diligence process:
Once the buyer’s attorney receives this information, he/she will begin their work on behalf of the purchaser to ensure there are no unexpected red flags/risks. The buyer’s attorney will also look at the Co-op/Condo Questionnaire and the building’s board minutes as part of the due diligence.
Typically a buyer attorney will take 3-5 business days to conduct due diligence before advising their client it is ok to sign the contract. As a seller, you should expect this downtime at this phase of the game.
Assuming due diligence is satisfactory, the timeline of events typically follows this path:
At this time, the deal is done and the buyer can move on with the next steps: the loan application & the board package
After contract signing, it is up to the buy side to prepare to produce the following:
While the buyer works with their lender to submit the loan application, the listing agent will work with the buyer’s broker (if there was one) in parallel, on the board package.
This phase of the process can easily take between 3 and 6 weeks, depending on how efficient the agent handling this step is and how quickly the buyer is able to procure all required documentation.
The goal of this phase is:
After submitting these documents, it is possible the management company will take a few weeks to process the application. On top of that, it may take another few weeks or a month for the building’s board to review the application.
When the BOARD APPROVED status comes in, the buy side and the sell side and their attorney’s will all coordinate a date to close the transaction (usually a week or two after the board approval comes in)
A final walk through will probably be scheduled the day prior or the day of the closing. Should any issues arise during the final walk through, it is typically resolved at the closing table by putting money in escrow until the noted issues are fixed.
And there you have it, what to expect when you look to sell your New York City apartment.
Written by Noah Rosenblatt & John Walkup of UrbanDigs