DippelLaw New York Law Blog

Selling a co-op apartment in New York City can be a complex process. In this guide, we’ll discuss the process, to help you sell your NYC co-op with confidence.

Once you’ve accepted an offer from a buyer, you’ll need to gather some information that your attorney will need in order to prepare the contract of sale. Your attorney will need to know the following:

1. The exact name of your cooperative corporation as it appears on your certificate of shares.
2. The number of shares
3. The name(s) stated on the stock certificate
4. The name address and contact information of the cooperative’s managing agent
5. The amount of the monthly maintenance and any assessments and their duration
6. The name(s) of the real estate broker(s)
7. Whether there is a flip tax
8. Any personal property other than furniture you’ll be taking, e.g. chandeliers, window air conditioners, etc.

Your attorney will prepare the contract based on the information you’ve provided and other information regarding the transaction usually set forth in a “deal memo” sent from the broker. You can download the latest standard NYC co-op contract by clicking the link below.

Your attorney will then email a PDF copy of the proposed contract to the buyer’s attorney for their review. In addition to the contract, the buyer’s attorney will want to review the cooperative corporation’s latest financial statements and the offering plan and amendments so you should be prepared to provide these documents. If you can’t locate the offering plan you may have to purchase a copy from your management.

Once you and the buyer have agreed to any changes proposed by the buyer’s attorney, the buyer will sign the contract and return it to your attorney with a check for the contract down payment. In the alternative, the buyer’s attorney may email a PDF copy of the signed contract to your attorney and have their client wire the down payment into your attorney’s escrow account.

After the contract has been signed by both sides, the buyer will apply for their loan (assuming they are getting financing) and will also apply for co-op board approval. This process may take 2 to 3 months until both approvals are obtained.

While the buyer is applying for their loan and co-op board approval, you need to provide your attorney with information concerning your existing loan. Your attorney will need to arrange for a payoff with your bank. Your bank will send your stock certificate and your proprietary lease, which they are holding, to their attorneys who will deliver them to the closing. It may take several weeks for your bank to send these documents to their attorneys so your attorney should order the payoff soon after the contract has been fully signed. If you didn’t finance the purchase of your apartment or have paid off your loan you should have your stock and lease. Make sure the documents are originals and not photocopies. The stock certificate will have a raised seal and the proprietary lease will have original ink signatures. If you can’t locate these documents you’ll need to take the steps set forth in my below blog article.

https://dippellaw.com/wordpress/i-own-a-new-york-city-co-op-but-cant-find-my-stock-and-lease-will-i-be-able-to-sell-my-apartment

Once your buyer has received a loan commitment and co-op board approval, your attorney can arrange for a closing which typically takes place at the office of the cooperative corporation’s attorneys.

Prior to the closing you should arrange to have all furniture and items of personal property removed. Be sure to check with the co-op’s management to make sure you’re complying with their move out procedures. The buyer will then do a final inspection of the apartment (the walk through) to make sure all appliances are working and the apartment is vacant and broom clean.

At the closing you’ll sign the transfer documents and transfer tax returns commonly called ACRIS documents. ACRIS stands for Automated City Register Information System. The ACRIS forms are generated by the city after information regarding your transaction is inputted into their website. The below link will bring you to the ACRIS web site.

https://www.nyc.gov/site/finance/property/acris.page

Your attorney will typically pay the transfer taxes and the seller’s co-op fees out of the escrow account in which they are holding the down payment. Prior to the closing, your attorney will have advised the buyer’s attorney to have the balance of the purchase price paid by official bank checks which may include broker’s commissions, any loan payoff and the co-op’s flip tax, if any. The closing typically takes about 2 hours after which you’ll leave with checks representing the net proceeds of the sale.

Since the sale of a cooperative apartment has many unique aspects it’s important to choose an attorney who is familiar with New York City co-op closings to ensure your sale comes to a successful conclusion.

A client of mine recently asked me to write a blog article article explaining step by step the process of selling your home in New York. This article assumes you’re selling a one family home. These steps may differ if you’re selling a cooperative apartment or condominium unit.

Step One, Putting your home up for sale.

Most people will hire a real estate broker to assist them in finding a purchaser. The broker will ask the seller to sign a listing agreement setting forth the term of the agreement, usually 3 to 6 months, the amount of the commission as a percentage of the sale price and whether the broker may put the listing on the multiple listing service.

Step Two, Hiring an attorney.

The broker has found a buyer who made an offer that you have accepted. Now you need to hire an attorney to represent you in the sale. The broker may recommend an attorney they have dealt with in other transactions but you are free to hire any attorney you feel comfortable with. Most attorneys offer free consultations in which they will describe the services they offer and their fee for representing you as a seller. I typically ask the prospective client to sign a retainer agreement setting forth the scope of my representation and my fee.

Step Three, Going to Contract

Even though you have verbally accepted an offer from the buyer, the transaction isn’t legally enforceable until both you and purchaser have signed a contract of sale. Your attorney will prepare the contract and email a copy to the Purchaser’s attorney to review. Once the Purchaser’s attorney has reviewed the contract and any proposed changes are agreed to, the Purchaser will sign the contract and it will be sent to your attorney with the down payment check. The down payment is customarily ten percent but is negotiable. Most contracts now permit digital signatures and the down payment may be wired to your attorney’s escrow account as well. Once the contract is received by your attorney, you’ll sign as seller and a PDF copy will be emailed to the Purchaser’s attorney together with a cover letter confirming receipt of the down payment which will be held in your attorney’s escrow account.

Step Four, Your Attorney Reviews the Title Report

Upon receipt of the fully signed contract, the Purchaser’s attorney will order a title report, a copy of which will be sent to your attorney. The report will indicate any mortgages you may have as well as the current real estate taxes and any other possible liens. Your attorney will ask you to contact the NYC DEP to arrange for a final water/sewer reading and to contact your bank to obtain a payoff letter for any mortgages you may have. For a discussion of title insurance see https://dippellaw.com/wordpress/why-do-i-need-title-insurance-when-i-purchase-my-home-in-new-york/

Step Five, Scheduling the Closing

Once your Purchaser has received their mortgage loan approval your attorney will schedule a closing with the Purchaser’s attorney. The closing is a meeting of the parties and their attorneys at which time the balance of the purchase price is paid to you and you will deliver possession of the home to the Purchaser. Prior to the closing, your attorney will prepare the deed and transfer tax returns which you’ll sign at the Closing. For a discussion of what taxes you’ll pay at the Closing, see https://dippellaw.com/wordpress/what-taxes-will-i-have-to-pay-when-i-sell-my-new-york-city-home/

Step Six, The Closing

The Closing will generally take place at the office of the attorneys for the Purchaser’s mortgage lender. You will sign the deed, the transfer tax returns and various title affidavits. You’ll receive the balance of the purchase price in the form of official bank checks from the Purchaser and their lender and the balance of the down payment, after your attorney has paid transfer taxes and other fees from their escrow account.

Step Seven, The Closing Statement

After the Closing your attorney will send you a closing statement summarizing the transaction together with copies of documents you’ve signed at the Closing. You’ll need this when you file your income taxes for the year the Closing took place.

While for the sake of brevity I have simplified the procedure somewhat, this general outline will give you an idea of what to expect when selling your home.