Buying a house or apartment in New York City is a complicated process and unique from the way it's done in other parts of the country. NY1's Jill Urban filed the following report.
Buying a first home comes with a lot of surprises, especially for those buying into a New York City co-op or condo. The process is like no place else and Karen Sonn, real estate attorney at Sonn & Associates, says no matter how much she prepares her clients, she finds the same things always leave buyers speechless.
For example, most have no idea just how invasive the process is.
"People are completely taken aback that they are going to give all their private information, all their accounts, what they earn, their Social Securities, references and everything about themselves, in order to get into a building in New York City," Sonn says.
With an application comes a lot of processing fees that can bring on sticker shock.
"You have to pay all these fees just for the application. And if you get rejected by the board, those fees don’t come back to you. And they can be the credit fees, the board application fee and a background check," Sonn says.
Also, when it comes to the loan, many buyers think they are in the clear when the bank issues a commitment letter, but that is not true. A commitment letter usually comes with conditions and the bank will not actually give the money until the buyer gives the bank whatever it needs to meet all the conditions.
Perhaps the biggest surprise comes at the closing table.
"People assume that you can come to a closing with a regular check. That’s not the case. The only, only type of check that you can come with is an official bank check. And you can't just go to the bank and get one easily. You have to have all your money liquid in the accounts. People make the mistake of transferring last minute and the bank will take 10 days to clear," Sonn says.
Once the deal, closes many are under the false assumption that they can start renovations right away. Think again.
The new owner needs to first file alteration agreements with the building and that usually cannot be done until closing. Then approval is needed, which could take a few days to a week on a small job, or months to years on big jobs that involve permits.
So just because the home is under a person's name doesn't mean it can be made to feel like home until the process is fully complete.