In New York City real estate, getting an accepted offer is only the beginning. Reaching a Fully Executed Contract (FEC) is often the hardest part of the transaction.
Roughly 30% of accepted offers in NYC never close, most commonly because issues surface during the due diligence period between buyer and seller. This phase can last two to three weeks, during which attorneys review contracts, building documents, financials and policies.
Why Deals Fall Apart Before a Fully Executed Contract
The most common issues fall into three broad categories:
Financial issues
-
Unexpected assessments
-
Discoveries of aspects of the building’s underlying mortgage
-
Flip taxes or transfer fees not previously disclosed
Political and policy issues
-
Subletting restrictions
-
Pet policies
-
Installing a washer and dryer
-
Use limitations that conflict with buyer expectations
Legal issues
-
Pending litigation involving the building
-
Disputed shareholder or board decisions
-
Zoning or compliance concerns
Any one of these can materially change a buyer’s willingness to proceed or a lender’s ability to approve financing.
Time Works Against Buyers
During the due diligence window, the deal is not binding. Sellers can still entertain backup offers, and in competitive markets, they sometimes do. Buyers who move slowly risk losing the property entirely if a stronger or faster offer appears.
While contracts may take weeks to finalize, five business days is often the average turnaround time in a well-prepared transaction. Deals that drag on are more vulnerable to disruption.
How to Reduce the Risk
Many deal-breaking issues can be identified before an offer is submitted by:
-
Reviewing building financials in advance
-
Understanding house rules and policies
-
Checking zoning and use restrictions
-
Anticipating lender requirements
Proactive review shortens the due diligence timeline and reduces surprises that derail deals.
Why Preparation Matters
Reaching a fully executed contract is about more than price. It’s about speed, clarity and risk management. Buyers who understand the building before making an offer are far more likely to get to contract and ultimately close.
Preparation is your best protection. If you’re buying or selling in NYC and want to reduce the risk of a deal falling apart before contract, I’m happy to help you prepare, move efficiently and avoid common pitfalls.
-
NYC Department of Buildings: https://www.nyc.gov/site/buildings
-
New York State Attorney General, Co-op & Condo Guidance: https://ag.ny.gov
-
Consumer Financial Protection Bureau, Homebuying Process: https://www.consumerfinance.gov
