NYC Affordability

In New York, “offer accepted” is mostly a mood. Accepted offers, written or verbal, generally aren’t binding on either side; the buyer can walk and the seller can keep entertaining other bids. What binds the deal is the contract of sale, which the attorneys negotiate after the offer is accepted and after the buyer’s attorney has done due diligence on the apartment and building. Home inspections, where buyers get one, typically happen before signing too, which is why NYC contracts rarely carry an inspection contingency.

The usual sequence: the buyer signs first and delivers a contract deposit, customarily 10% of the price, to the seller’s attorney, who typically holds it in escrow. The contract isn’t fully executed until the seller countersigns, and until then the seller can technically still shop the deal. Once it’s signed, the deposit is what’s at stake. The standard co-op contract commonly used in NYC limits the seller’s remedy for a buyer default to keeping the deposit as liquidated damages, which is a polite way of saying the buyer who walks without a contractual reason loses it.

The contingencies are what let a buyer walk with the deposit. A financing contingency typically gives the buyer a set period after signing, commonly 30 to 45 days, to get a loan commitment, and lets them cancel if they make a good-faith effort and can’t. Co-op contracts typically make the sale subject to the board’s unconditional consent, so an outright rejection, or approval with conditions, generally lets the buyer cancel and get the deposit back, as long as the buyer didn’t cause it by stonewalling the board package. Who pays any building special assessment is also settled in the contract.

Worked example

A buyer signs a contract on a $700,000 co-op, financing 80%. At signing, they deliver a $70,000 good faith deposit to the seller’s attorney’s escrow. The contract gives them, say, 45 days to get a loan commitment, and, under the standard form’s language, a few business days after that commitment to submit the board package if the co-op requires the commitment letter. If the bank declines despite a real effort, or the board rejects them, they cancel and the $70,000 comes back. If they simply get cold feet, it generally doesn’t. The remaining $70,000 of their $140,000 down payment, plus closing costs, is due at closing. The Savings Planner estimates how long it takes to save the cash a purchase like this needs, and the co-op board approval guide covers what happens between signing and closing.