How Does the Offer Process Work in NYC?

Buying in NYC? Nick at Hauseit walks you through how the offer process works in New York City.

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So how does the offer process work in New York City? Well, the good news is that, it is a very straightforward exercise. Most of the time you'll have a buyer's agent helping you out throughout this process but in essence submitting an offer is as simple as you or your buyer's agent drafting an email with the relevant offer terms and also attaching the requisite documentation and essentially just sending that into the listing agent.

Now, what offer terms are included? Well, of course, you'll have the basics. You have certainly the price, you have your percentage down if you're financing, you will have contingencies, for example, a mortgage contingency.

You'll also include your proposed closing date and you may also include some other terms. For example, that the property will be subject to a satisfactory pre-contract inspection. Now, in addition to your offer terms, you may very well include your real estate attorney contact information, and perhaps a brief purchaser bio. We always recommend including your real estate attorney contact details because of the fact that it telegraphs a certain degree of seriousness to the listing agent and this could have an impact on the seller's flexibility, in terms of pricing or it could just help you stand out compared to other people who may have submitted an offer.

Now, what documentation is typically submitted? Well, the most important component is typically a pre-approval whether you're buying a condo, co-op, townhouse, single or multi-family home, if you're financing you absolutely need to include a pre-approval. You may sometimes be able to get away with a prequal but we don't recommend going down this route. The other documentation consists of either a submit offer form which is most commonly used for townhouses or condos and new developments, of course, or a REBNY financial statement which is used primarily for co-op apartments.

The REBNY financial statement allows the listing agent to crunch some numbers in terms of your DTI, debt to income ratio, and your post-closing liquidity. These two metrics are crucial for board approval and so in addition to your offer terms, the seller of a co-op needs to be thinking about and analyzing your financial parameters and whether or not you actually pass the threshold for that particular co-op.

So, aside from your pre-approval i.e your bank documentation and either the submit offer or REBNY financial statement you might also include proof of funds. Proof of funds can be the full purchase price if you're buying all cash but at a minimum, we recommend proof of funds being at least 10% of your purchase prices because this telegraphs to the listing agent and the seller that if your offer ends up being accepted, there would be no undue delay before you sign the contract.

So, what happens after your offer is submitted? Well, the first thing that will happen is that the listing agent will typically respond rather quickly and confirm receipt of the offer. Now, at this point, the process is very much up in the air and it comes down to the seller, how responsive is the seller. Oftentimes you hear that a seller is traveling in Europe and doesn't have internet believe it or not, that's still apparently possible in the year 2022 but in any case, you basically just have to wait for the seller to come back but usually it takes about 24 hours.

After you submit the offer, after you get that initial response, there could be several rounds of back and forth and negotiating until you end up having an accepted offer at which point a deal sheet is circulated to the attorneys which includes all of the terms that you have successfully negotiated and thereafter that kicks off the contract review and buyer due diligence process.
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