Guide to Buy a Home in New York | Making an Offer to Purchase


Guide to Buy a Home in New York


Making an Offer to Purchase


Making an Offer to Purchase



Once you have found a home that you would like to purchase, the next step is to submit your offer. If you are working with a real estate broker, he or she will submit your offer and will usually be involved throughout the negotiation process. Most purchasers feel more comfortable negotiating through a real estate broker rather than dealing face-to-face with the seller.

In most cases, the seller already has stated an asking price. You do not have to accept this price. In fact, the seller typically expects some negotiation of the price and the other terms of the contract. Usually a contract is determined through a series of offers and counter offers until both parties agree on the price, the closing date, the loan amount, if any, and the length of time to obtain a loan if the seller has agreed to a financing contingency (defined below), any repair work, the condition of the property, and the inclusions or excluding of personal property within the home. Once the seller accepts your offer, you should immediately inform your attorney.

Contract of Sale


A real estate contract memorializes the agreement between a purchaser and a seller. The contract will specify all of the terms and conditions of the transaction and will describe the parties’ respective rights and obligations. The contract will also contain contingency provisions and representations of the purchaser and seller that describe what will happen if things do not go exactly as stated in the contract. As soon as your offer is accepted, the seller’s attorney will prepare the contract of sale and forward it to your attorney. Your attorney will explain your rights and obligations under the terms of the contract and will negotiate any necessary changes to the contract with the seller’s attorney. After all of the terms in the contract are agreed upon, your attorney will send you four copies of the contract for you to sign and return to his or her office along with a personal check for the down payment as specified in the contract. This check will be deposited by the seller’s attorney in an escrow account until the actual closing date and applied towards the purchase price.

Basic Contract Terms and Contingencies

The contract will identify the purchaser and seller, their attorneys, the house or apartment to be sold, the party who will hold the contract deposit (usually the seller’s attorney, also referred to as the escrow agent), the names of the real estate broker(s), the current real estate taxes (if a condo or house), common charges, or maintenance fees, and any assessments that may be levied against the co-op or condo apartment, whether or not there is a flip tax (transfer charge levied by the co-operative corporation), and the party who is responsible for making this payment. The contract also will state if the purchase is contingent on the buyer obtaining a loan (i.e., financing contingent), and if so, the amount of the loan. The contract will identify the proposed occupants of the home (if other than the purchasers) and if the purchaser has any pets.

Key Terms Found in a Contract:

  • Contract Deposit. The contract deposit generally will be ten (10%) percent of the purchase price. The money is held in the seller’s attorney’s escrow account (usually non-interest bearing).

  • Flip Tax. A flip tax is a charge levied by a co-operative corporation on the transfer of ownership of an apartment. A flip tax is used as a means of generating income for the building and is customarily paid by the seller. The flip tax may be based on a percentage of the seller’s profit, a percentage of the sales prices or a dollar amount per share transferred. Not all co-operative corporations impose a flip tax and condos rarely do.

  • Occupants. If the occupants of a co-op apartment will not be the purchasers (e.g., parents purchasing for son or daughter) this will be detailed in the contract.

  • Pets. If the building permits pets, the contract will state the type and number of pets to be kept in the home. Some co-ops prohibit certain breeds of dogs or dogs over a certain size or weight.

  • Purchase Price. The purchase price will be stated and the terms of the payment will be defined in the contract. The terms are customarily a ten (10%) percent deposit to be paid at signing with the balance due at the closing (usually 60 to 90 days from the contract signing) in certified funds. Customarily, a purchaser can get a 15 to 30 day extension of the closing date. Extensions beyond 30 days, however, are solely at the discretion of the seller.

  • Personal property (also known as “personality”). Since real estate is defined as :and and anything permanently affixed thereto”, personal property is everything not permanently affixed to the apartment, including: hardware, kitchen appliances, cabinetry, air conditioners, lighting fixtures, wall-to-wall carpeting, washer and dryer, window screens, and window treatments (drapes, shades, and blinds). The contract will provide a list of those items of personal property, which will be included or excluded in the sale. You should assume that no personal property is included unless the contract expressly states that it is.

  • Condition of the Property. Generally, contracts for the sale of co-op and condominium apartments will stipulate that the apartment will be sold in its “as is” condition. Most contracts for co-op and condo apartments are not contingent upon a home inspection, and purchasers generally do not have an inspection performed based upon the knowledge that the co-op corporation or condominium association is responsible for the maintenance and repair of the building’s common area, structure and operating systems. If, however, you and the seller have agreed that the seller will perform some repair to the interior of the apartment prior to closing, this must be included in the contract. Since condominium by-laws and co-op proprietary leases provide that the unit owner is responsible for the maintenance and repair of the interior of the apartment (including the plumbing and the heating and electrical fixtures and systems within the apartment) the contract should contain language requiring that these fixtures and systems must be in working order at closing. You will be responsible for all repair expenses to the home and its appliances after the closing, so it is important for you to be familiar with the condition of the home or apartment before you sing the contract. The contract also will state that the seller delivery the premises vacant and broom clean at closing.


If you are purchasing a single-family house, you should hire a home inspector or engineer to perform an inspection to determine the condition of, among other things, the heating, plumbing, electrical systems, appliances, roof, and foundation, since as an owner, you will be solely responsible for the maintenance and repair of the home, both inside and out. The contract of sale will likely contain a provision which stipulates that the home is being sold in its “as is” condition so that the seller will not be responsible for any repairs to the home discovered after the contract is signed. Generally, the contract will not be contingent upon the purchaser obtaining an acceptable home inspection report, so a seller will generally insist that the purchaser arrange for a home inspection prior to signing the contract, if at all. That way, if the purchaser is dissatisfied with the results of the inspection, both the purchaser and seller can walk away from the deal without having spent money on legal fees for the negotiation of the contract. Of course, the purchaser is free to negotiate with the seller to repair any of the problems that are discovered in the home inspection or to obtain a reduction in the purchaser price. It is recommended that you accompany the home inspector during the inspection process. He can point out any problems with the home as he discovers them, and you will not have to wait for a written report. Some tests take longer to perform, and in these instances, the contract will be contingent upon the receipt of acceptable results. Tests for water portability, fuel tanks, radon, and termites can take up to two weeks to complete. If the results of any of these tests are unsatisfactory, the contract will generally state that the seller has the option of correcting the problem prior to closing and that if the seller chooses not to correct the problem, the purchaser will have the right to cancel the contract. In New York State, a seller is required to deliver to the purchaser a form disclosing any known defects in the home, but a seller is permitted by law to give a $500 credit to the purchaser at closing in lieu of providing this disclosure.

  • Closing Date. The contract will indicate a date for closing. The closing date in the contract is, however, only an estimated date for closing because there may be many conditions that a purchaser must satisfy between the contract signing and the closing date. The timing of these conditions (including obtaining a loan commitment and obtaining co-op board approval or the condo’s waiver) is mostly beyond a purchase’s control.

  • Financing Contingency. A financing contingency provision in a contract permits the purchaser to cancel the contract and obtain a full refund of the contract down payment if the purchaser is unable to obtain a loan. The financing contingency provision will describe the maximum amount of financing for which a purchaser is permitted to apply and the maximum permitted term of the loan. Generally, the provision will allow the purchaser between 30 and 45 days to obtain a loan commitment letter and will permit the purchaser to cancel the contract if the purchaser has not obtained a loan commitment letter with that time period.

  • Co-op Board Approval. In co-operative corporations, the sale of an apartment will be subject to approval by the board of directors. The purchaser must submit an application along with income tax returns, verification of employment, proof of assets, letters of reference, and any additional documents reasonably required by the board within 10 days of signing the contract, if a cash deal, or within 3 days of receiving a loan commitment if the purchaser is financing the purchaser. After the board of directors has reviewed the purchaser’s application, the purchaser must attend an interview with members of the board of directors. If the purchaser is rejected by the board, the contract will be canceled and the downpayment will be returned to the purchaser.

  • Lead-Based Paint. Several years ago, the federal government passed legislation that requires a seller to disclose to a purchaser any knowledge of, or information regarding the presence of lead-based paint or lead-based paint hazards in their home. The danger of lea-based paint is that small children who ingest lead-based paint chips or inhale particles of lead dust may suffer neurological damage. Although lead-based paint has been prohibited since 1978, it still may exist in older homes. Nevertheless, lead-based paint is not considered a hazard if the home’s surfaces are properly maintained or have been repainted with non lead-based paint. If the home was constructed prior to 1978, the contract must contain an affidavit wherein the seller must represent if it has any knowledge of the presence of any lea-based paint or lead-based paint hazards in the unit.

  • Condominium’s Right of First Refusal. Although it is rarely exercised, the sale of a condominium apartment is subject to the right of the condominium’s board of managers to purchase the apartment on behalf of the condominium when the seller has entered into a contract of sale. The contract will provide that the condominium’s board of managers must waive its right to purchase the apartment as a condition to close.

  • Marketable Title. The contract will generally state that the sale is conditioned upon the seller transferring the premises free and clear o fall judgement, liens, co-op loans, mortgages, real estate tax arrears, or other encumbrances against the property (a condition otherwise known as “clean” or “marketable” or “insurable title”). If you are purchasing a condominium unit or single-family house, your attorney will order a title report after the contract is signed and will arrange to have a copy sent to the seller’s and to your lender’s attorneys. If the title report reveals defects in the seller’s title, the seller’s attorney will be required to clear the defects prior to the closing. At closing, the title insurance company will take responsibility for recording all transfer and tax documents and will issue a title insurance policy that verifies that you have received a clean or marketable title. You will pay a one-time premium for title insurance, which guarantees that the title company will defend, as its own expense any claims made by third parties against the property’s title for as long as you own the property.


If you are purchasing a co-op apartment, your attorney will order a judgment and lien search to determine if there are any recorded judgments, lines, or other encumbrances against any of the parties. AS with a contract for the purchase of a condominium nit or single-family house, the contract will state that the seller must remove any judgments, liens, or encumbrances against him or her prior to closing. Although the judgement and lien search does not insure the title to the unit, you may obtain co-op title insurance for a separate fee, which will be paid at the closing. The title search and title insurance will be discussed in great detail later.


Source: Keith A. Schuman