Be Prepared When You Submit An Offer

A: I get asked this question ALL the time by my clients who are actively looking to buy an apartment, but don't even know what they are supposed to submit when they are ready to bid. Here is a breakdown for what is needed to submit a good-faith bid and make yourself look 'ready to go' so that the seller can take your offer seriously and counter appropriately. Originally Published July 28th, 2006

FINANCIALLY STRONG BUYERS CARRY MORE WEIGHT DURING THE NEGOTIATING PROCESS BECAUSE OF THE COMFORT THAT IS OFFERED TO THE SELLER DURING THE SALES AND BOARD REVIEW PROCESS. PAYING ALL CASH FOR A PROPERTY SHOULD DESERVE A 2-3% ADJUSTMENT IN PURCHASE PRICE IN FAVOR OF THE BUYER!


BEFORE YOU START LOOKING

Crunch the #'s and figure out what you can actually afford

Get a pre-approval letter from a lending broker

Pay down your credit debt and try to increase your score for when you will ultimately lock in a rate

NEEDED TO SUBMIT AN OFFER

A full financial analysis to show your assets & liabilities, salary, and bonus if any

Enough liquid assets to cover the down payment + closing costs and STILL have leftover to show the board. Co-ops will require around 1 years worth of liquid assets in maintenance + mortgage costs AFTER CLOSING COSTS, at the very least

Written offer letter stating your initial bid, your salary, your job position and time with firm, your attorney info and your mortgage broker info

The pre-approval letter you got earlier

WHEN OFFER IS ACCEPTED

1. Offering plan, 2 YRS building financials, board minutes, and contract of sale will be sent to your attorney listed in the offer letter.

2. Attorney does diligence and is expected to have contract ready to sign within 5 business days.

3. Buyer signs contract and sends in 10% deposit.

4. Seller countersigns contract and broker gets to work on board package.

5. Bank sends appraiser in and processes financing, if any. These docs (loan commitment + aztec forms) usually take the longest to get and are needed to finalize the board package before it is sent in.

6. Board package review.

7. Walk-through and Closing!

QUICK NOTES

1. If you are using a buyer broker, they will instruct you to have all of this ready as you get closer to submitting your bid.

2. If your buyer broker asks for a financial history, he/she is NOT being nosy! Rather, they are being professional and are looking out for your best interests as they try to show you apartments that you can actually afford and comfortably pass the board!

3. If buying a co-op, be prepared to hand in pay stubs, tax returns, employer letter, personal & business referrals, and hard copies to back up EVERY asset you listed! Being prepared makes for a smoother transaction so start saving these docs before you submit the bid!

4. Please educate yourself on what you can actually afford before you bid for a property! Try to keep the total living expenses (mortgage + maintenance + real estate taxes) UNDER 30% of your total take home monthly income. If you are over this #, think twice about what you are getting involved in!