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Understanding the Residential Real Estate Closing Process in NYC

Purchasing or selling a home in New York City is a major financial event—and the legal process can feel complex and fast-paced. Whether you're a first-time homebuyer or a seasoned investor, understanding the residential real estate closing process in NYC is essential for a smooth transaction.

 

Here’s a breakdown of what to expect from the accepted offer to closing day.

1. Offer Accepted — But the Deal Isn’t Final Yet

In New York, once an offer is accepted, the property is taken off the market. However, this is just the beginning. Unlike many other states, real estate deals in NYC are not legally binding until both buyer and seller sign a formal contract, which happens only after attorney review.

 

Tip: As the buyer, you’ll need to move quickly to select an attorney and schedule inspections before signing the contract.

2. Due Diligence and Contract Signing

The buyer’s attorney conducts due diligence before advising the client to sign the contract. This includes:

• Reviewing the building’s financials and offering plan (for condos/co-ops)

• Examining public records, violations, and potential compliance issues

• Investigating potential liens or litigation

• Reviewing board minutes (for co-ops)

• Obtaining a questionnaire from the building

After completion of due diligence and finalizing the contract, buyer typically places a 10% down payment, aka contract deposit, with the escrow agent, who is is the seller’s attorney.

Once the seller’s attorney receives the contract deposit and the signed contract from the buyer, the seller will countersign the contract. When the contract is fully executed, the buyer can order the lien search/title report.

 

 the stage of completing the due diligence and finalizing the contract can take 1-2 weeks.

3. Mortgage Commitment (If Financing)

If the buyer is financing the purchase, obtaining a mortgage commitment is the next step. This can take several weeks and involves underwriting, credit checks, and property appraisals. In co-op purchases, the buyer also submits a board application package. Ideally, buyers will get a mortgage contingency in the contract for protection against the prospect of not obtaining the mortgage commitment.

 

Tip: Pre-approval is helpful, but it’s not the same as a full mortgage commitment. A mortgage contingency provision in the contract will protect the buyer from a failure to obtain the mortgage commitment by a set due date (usually 30-45 days from signing the contract).

 

Note: Generally, the board application is submitted when the mortgage commitment letter is received as Most boards require this as proof of financial readiness to proceed with the purchase.

 

 depending on the lender and your financials, this stage can take about three weeks.

4. Title Search and Clearance

The title company will run a title search to ensure there are no outstanding liens, judgments, or defects that could affect ownership. It is the seller’s responsibility to cure title defects affecting the unit on or before the closing. The attorneys will resolve title issues and confirm that the seller can deliver “clean” title.

 

For co-ops, a lien search replaces the title search since there is no deed involved Co-op owners hold shares in a cooperative corporation (considered personal property) and receive a proprietary lease to occupy their unit, while condo owners hold title to their individual units as real property.

5. Final Walkthrough

On or a day before the closing, the buyer will do a final walkthrough with the real estate agents to ensure the property is in the agreed-upon condition and any promised repairs, which were specified in the contract of sale, are completed.

6. Closing Day

The closing usually takes place at the office of the seller’s attorney, lender, or title company. Parties present may include:

• Buyer and seller

• Attorneys for both sides

• Bank attorney (if financing)

• Payoff attorney (if seller needs to payoff the mortgage on the property)

• Title closer (for condos and houses) or transfer agent, usually with the management company (for co-ops)

 

The buyer signs loan documents, the deed is transferred (or stock certificate and proprietary lease in a co-op), and final payments are made. After that, keys are handed over—and the buyer officially becomes the new owner.

 

 

Final Thoughts

 

The NYC real estate closing process is unique, attorney-driven, and full of legal nuances. Working with a knowledgeable NYC real estate attorney ensures that your rights are protected and the transaction proceeds smoothly.