What Happens After You Sign a Contract to Buy Property in NYC?
You found the right property, negotiated the price, and finally got the seller to agree. So what happens next? In New York City, signing the contract of sale is a major milestone, but it is far from the finish line. There are several important steps between contract signing and the day you actually get the keys. Here is a closer look at how the process typically unfolds.
The Contract Goes Through Attorney Review
In NYC, it is standard practice for both the buyer and seller to have attorneys involved in the transaction before and after signing. Unlike some other states, New York does not have a fixed statutory attorney review period built into the law. Instead, as the New York City Bar Association explains, attorneys negotiate and review the contract terms before the parties sign, and any remaining issues are addressed in the days following execution.
Once the contract is signed by both parties, your attorney will review the terms carefully, confirm that any negotiated modifications are properly reflected, and begin coordinating next steps. This is also when the buyer typically delivers the contract deposit, often around 10% of the purchase price, which is held in escrow until closing.
Due Diligence: Title Search and Inspections
After the contract is signed, due diligence begins in earnest. Your attorney will order a title search through a title insurance company. The title search is designed to confirm that the seller actually owns the property free and clear, and that there are no outstanding liens, judgments, open violations, or encumbrances that could affect ownership after closing.
The title report will also flag any issues that need to be resolved before the transaction can close, such as unpaid water bills, tax liens, or easements. For single-family homes and some townhouses, a home inspection typically takes place around this time as well, although it is worth noting that in NYC, inspections for condos and co-ops are less common than in other markets.
Securing Your Mortgage Commitment
If you are financing the purchase, your contract will likely include a mortgage contingency clause. This gives you a specific window of time, typically 30 to 60 days, to obtain a written mortgage commitment from your lender. During this period, you will be working closely with your lender to provide financial documentation, schedule an appraisal, and move through the underwriting process.
If you are unable to secure a commitment within the timeframe specified in the contract, the mortgage contingency may allow you to cancel the deal and recover your deposit. Missing this deadline without proper notice, however, can put your deposit at risk.
Co-op Board Approval (If Applicable)
Purchasing a co-op in NYC adds another layer to the process. Before you can close on a co-op unit, you must submit a detailed board application package and go through a board interview. The co-op board has broad discretion to approve or reject purchasers, and this process can take several weeks. It is one of the features that makes co-op purchases in NYC distinctly different from buying a condo or a house.
What Happens Right Before Closing
As the closing date approaches, several things come together at once:
- Your lender issues a final loan commitment and prepares closing documents.
- Your attorney conducts a final review of the title report and confirms all liens have been cleared.
- A final walk-through of the property is scheduled, typically within 24 to 48 hours before closing.
- Your attorney prepares a closing cost breakdown so you know exactly how much you need to bring to the table.
- Funds are arranged, often via wire transfer, to cover the balance of the purchase price and closing costs.
At closing itself, documents are signed, funds are exchanged, and the deed is recorded, making the transfer of ownership official.
Contact Us Today for Guidance
The period between contract signing and closing involves a lot of moving parts, and the timeline can shift depending on your lender, the title search results, or co-op board scheduling. Working with an experienced Brooklyn real estate attorney can help you stay on track, anticipate potential obstacles, and protect your interests every step of the way. At Yeung & Associates, PLLC, we guide buyers through every phase of the NYC real estate transaction process. If you are under contract or getting ready to make an offer, reach out to our firm today to discuss how we can help.
Source:
nycbar.org/get-legal-help/article/real-property-law/purchase-sale-real-property/