Submitting an offer in NYC as a buyer’s agent is generally pretty easy. Offers are typically submitted by email, meaning there are no contracts, agreements or official forms to sign at this preliminary stage. However, as a buyer’s agent, your role is to present your client’s offer in the strongest and best possible light which means you should ensure that your offer submission is as complete as possible.

Submitting an offer on a condo is quite straightforward. You’ll need to compose an email to the listing agent with the following:

• Full address of the listing

• Full legal names of the buyers

• The offer price

• How much the client intends to finance, if any

• Contract contingencies, if any

• REBNY Financial Statement

• Mortgage pre-approval letter

• Buyer’s attorney’s contact information

• Short biography of the buyer

Are any elements optional to include?

If you have an all cash buyer who’s very concerned about personal privacy, then you may be able to get away with simply providing proof of funds in lieu of a REBNY Financial Statement. For example, very wealthy buyers may have no desire to disclose their net worth and total financial picture to a random listing agent. As a result, you can sometimes get away with simply sending a snapshot of a brokerage or bank account with more than enough funds to cover the purchase price and closing costs.

Additionally, if the buyer doesn’t have a lawyer lined up yet, you can still submit an offer but just say that the buyer is in the process of interviewing a couple of lawyers and will have one ready to review a contract immediately if the seller accepts the offer. Some agents go so far as to simply state that the buyer has an attorney ready to review the contract ASAP, without revealing the attorney’s contact information.

Sample all cash offer submission email

Dear [Listing Agent Name], we are pleased to submit the following all cash offer of $[Price] for [Address] on behalf of our client [Client Name]. We don’t anticipate utilizing any financing and this offer is not contingent on financing. We have an attorney on standby ready to review a contract ASAP, and we’ve also included a REBNY Financial Statement and a short biography for your review. If necessary, we can provide proof of funds in the form of brokerage and bank statements.

Our client is very seriously looking and intend to close on a place within the next 60 days. Please note that we have seen upwards of 60 properties in the past few weeks, and have submitted and will be submitting additional offers. We will be doing a deal, and we hope you will be receptive to our offer.

Please confirm receipt and let us know if we can do a deal. Thank you!

REBNY Financial Statement:

https://docs.google.com/spreadsheets/d/samplelink

Attorney Contact Information

Ryan Doyle
Attorneys PLLC
200 West Street
New York, NY 10005
Phone: 212-222-2222
Email: ryan@doyle.com

Short Biography

John Smith is an accountant at Big Consulting LLC based in Battery Park City in Lower Manhattan. John has been an accountant for 10 years and has previously worked at Small Consulting LLC in Chicago for 4 years. John lives with his girlfriend Nancy and enjoys sports, small dinners and rock climbing.

Co-ops have strict financial requirements for prospective buyers

Submitting an offer on a co-op apartment listing in New York City is slightly more complex because co-op buildings will often have stricter financial requirements than that of bank lenders.

For example, many co-op boards will require prospective buyers to have a debt-to-income (DTI) ratio of 25% to 30% at a maximum, while many banks will allow significantly higher DTI ratios in the 40% to 50% range.

Furthermore, many co-ops will require months to even a couple of years of post-closing liquidity vs the much less stringent requirements imposed by lenders. For example, we’ve heard of some major banks requiring 6 months of post-closing liquidity but with many outs on what counts as an expense.

Last but not least, many co-ops will require a minimum percent of down payment for purchases, with 25% or 30% being fairly common. However, some co-ops will go even further and require 50% down or more. You’ll even see the occasional co-op that will require 100% down, meaning no financing allowed!

Check with the listing agent on the co-op’s financial requirements

You should ideally check with the listing agent on whether the co-op has any specific financial requirements around DTI ratios and post-closing liquidity before submitting an offer. For example, if the co-op requires 2 years of post-closing liquidity and you know that your buyer will be completely out of cash after the down payment and closing costs, then it’s probably wiser to have a conversation with your client before wasting everyone’s time on an offer.

Sample email for an financed offer on a co-op

Dear [Listing Agent Name], we are pleased to submit the following offer of $[Price] for [Address] on behalf of our client [Client Name]. Please note that this offer is contingent on financing; however, our client can put up to 40% down. Our client’s debt-to-income ratio is 20% and our client should have approximately 2 years in post-closing liquidity.

We have an attorney on standby ready to review a contract ASAP, and we’ve also included a REBNY Financial Statement (attached), a loan pre-approval letter from Bank of New York (attached) and a short biography for your review. If necessary, we can provide proof of funds in the form of brokerage and bank statements.

Please confirm receipt and let us know if we can do a deal. Thank you!

Attorney Contact Information

Ryan Smith
Smith & Smith Attorneys PLLC
20 West 10th Street
New York, NY 10005
Phone: 212-222-2222
Email: ryan@smithandsmith.com

Short Biography
John Smith is an accountant at Big Consulting LLC based in Battery Park City in Lower Manhattan. John has been an accountant for 10 years and has previously worked at Small Consulting LLC in Chicago for 4 years. John lives with his girlfriend Nancy and enjoys sports, small dinners and rock climbing.

Submitting an offer on a single or multi-family townhouse or detached house is similar to submitting an offer on a condo. There is no co-op board so you won’t have to worry about the building having financial requirements of its own. However, just like a condo, you should still endeavor to submit as complete of an offer as possible to present your client in the best possible light.

What about inspections for free-standing houses?

Home inspections are typically done for houses and townhomes whereas they are quite rare for condo and co-op purchases. That’s because the buyer of a house will be responsible for the entire structure, whereas a condo or co-op apartment buyer will only be responsible for the interior of their apartment. The rest of the condo or co-op building is professionally managed by an managing agent, and the cost of any repairs to the common areas are often shared with hundreds of neighboring unit owners.

Should you ask for an inspection contingency?

No, the home inspection is typically done after an offer has been accepted, but before a contract is signed. As a result, any re-negotiations that might occur after the home inspection are settled before going into contract. This means that both parties enter into the contract with “eyes wide open,” and no inspection contingency clause is necessary in the contract.

How should you ask for a home inspection?

It’s optional on whether you wish to mention that your client wants an inspection in the offer email. Listing agents of houses will generally expect any reasonable buyer to want to do a home inspection, so they won’t necessarily be surprised. However, it’s also fine to bring it up after you have an accepted offer. For example, after your buyer’s attorney has received a draft of the purchase contract, you can simply reach out to the listing agent and ask to see it again with the buyer and his or her home inspector.

The buyer should never sign anything

The buyer should never sign anything, including a custom submit offer form that the listing agent requests you use. That’s because offers are supposed to be non-binding, whether they be written or presented verbally, in New York.

Listing agents who have any idea of what they’re doing will never “require” or try to force buyers to sign a custom offer form, because doing so may cause grounds for a lawsuit if the buyer wishes to back out at a later time. For example, there has been precedent in Massachusetts where an offer to purchase form was signed by both the buyer and seller after the offer was accepted. However, when the seller wished to back out later and sell to a higher offer, the buyer sued the seller and actually won because they had signed something. Don’t put you or your client in this position!

The financing, or mortgage, contingency is really the only commonly used contract contingency in New York City. It’s rare to see anything else, such as a Hubbard or sale contingency being asked.

The financing contingency is a blanket term that can be further negotiated

Keep in mind that the “financing contingency” is a rather general term, and can be further negotiated during the contract review phase by the attorneys. For example, the buyer’s attorney can negotiate for language that will give the buyer an out of the contract if the appraisal comes in below the contract price (i.e. appraisal contingency) or even if the buyer doesn’t get a commitment letter for minimum amount of financing (i.e. minimum loan amount contingency). And of course, all financing or mortgage contingency clauses will give the buyer an out of the contract if he or she fails to secure a commitment letter from a bank within a set period of type, typically 30 to 45 days after contract execution.

Should you waive the mortgage contingency?

It depends. If the buyer has sufficient funds to close without needing a mortgage, but simply wishes to finance the purchase, then the buyer may wish to consider making his or her offer non-contingent. A non-contingent offer will be viewed with less execution risk, and will be almost as good as an all cash offer. We say almost as good because a non-contingent offer will still take longer to close vs an all cash offer.

However, if the buyer definitely needs a mortgage in order to close, then he or she should be very careful about waiving the mortgage contingency. If the bank doesn’t show up with the check on closing day for whatever reason, then the buyer may lose his or her contract deposit of typically 10% of the contract price.

What is a Hubbard or sale contingency?

A Hubbard contingency, more commonly called simply a sale contingency, lets a buyer out of a contract if he or she isn’t able to sell his or her own home (i.e. someone selling and buying at the same time). This type of contingency is very hard for a seller to accept given the additional risks involved.