Buying

Get your hands on a whole lot of money & find out how much of a purchase price you can qualify for
1. For a condo you will typically need 10-20% down and then a couple months of common charges and mortgage payments in liquid assets after the purchase
2. For a coop, you will generally need a minimum of 20% and sometimes up to 50% or more down and a year’s worth of maintenance and mortgage payments in liquid assets.
3. Call a good mortgage broker to get pre approval. This is a must – It’s quick and free and will also help you bid when the time is right.
4. Use a mortgage broker referred by friends/ family /social contacts. MAKE SURE THEY ARE BASED IN NEW YORK CITY AND DO PRIMARILY NEW YORK CITY MORTGAGES. I can’t stress this enough. Even if your uncle does mortgages in Kansas, you still want to get someone here who understands our market. And for sure you don’t want to use any of the online companies, who make a general mess of things here.
Make a priority list including neighborhood, price, amenities, and any details that are very important to you (i.e. renovated kitchen or private outdoor space)
1. If you aren’t yet familiar with New York neighborhoods; explore them; try to have a meal in every potential neighborhood. And keep in mind, location is key and well worth paying for. The most common mistake of people who first move to New York is to sacrifice location for a better apartment.
2. Decide coop or condo
  1. Jeff, what’s the difference between a condo and a coop
    1. Well there are two ways to explain this. The first one is technical, here goes: A condominium is real property, you buy the apartment itself and a shared interest in the common areas. You pay a monthly common charge to help maintain these common areas and cover services such as super, cleaning and doorman. In a coop, the building or sometimes a few small buildings, is a corporation and you buy shares in that corporation as well as the right to live in a specific apartment. You pay monthly maintenance charge which covers upkeep of the common area and also pays part of the underlying mortgage on the building as a whole
    2. On a practical level this is the difference. A condo is generally very easy to buy sell or rent. They are also 20% or so more expensive than coops. A coop on the other hand is a bit trickier to buy sell or rent. Generally, you will require the coop board’s approval to buy in the building, to sell your apartment, or to rent out your apartment. They also set other conditions, such as the minimum down payment required to purchase, or how long you can rent out your apartment, if they even allow it at all. Every coop is different and you should carefully review the rules of each.
      1. But then Jeff, why would I ever buy a coop
      2. Simple, because they’re cheaper, there’s a lot of them, and because sometimes it nice to choose your neighbors...
        
        Cheaper – you will simply get dramatically more apartment for the same money in a coop rather then a condo
        
        More of them - the majority of privately owned apartments in New York City are coops, and in some neighborhoods, like the village or fifth ave, there are very few condos. And prewar condos are particularly hard to find
        
        Choose your neighbors – 3am parties can get annoying
3. Prioritize your needs and desire by answering the following questions for yourself:
  1. What is your price range - figure out how much you’re comfortable with putting down and how much you can afford to pay for your monthly expenses
  2. What size apt
  3. What locations(s)?
  4. When do you need or want to move in by what type of building (i.e. high-rise vs. walkup)?
  5. Do you want an already renovated home or would you do renovations yourself?
  6. What is the most important detail(s) to you about your new apt?
Find a good broker
1. On the buy side, this is a no brainer. Unlike rentals, where the renter usually pays the fee, when you buy an apartment, the seller pays the fee, regardless of whether or not you have a broker. Essentially, you get some to work for you, advice you, and negotiate for you for free.
2. Talk to your friends/ family/ social circle to find a good broker. If a broker did a good job for your friend, they will probably do the same for you.
3. A good broker will
  1. Take the time to understand your needs and then use their knowledge of the market to bring it to you. Sometimes they can even bring you options you hadn’t considered, but ones that match your needs.
  2. advice you as to what is appropriate pricing and what is a good deal
  3. negotiate the best price and terms for you
  4. walk you through the paperwork and interview if there is one
  5. Coordinate all the different players including the mortgage reps and the attorneys, to get your deal done smoothly.
  6. And its all free
Begin looking at apartments 4-6 months before your move date, longer if you are looking for specifically new development
1. Ask your broker to take you out the first time to get a feel for what you like
2. Begin viewing places that match your criteria and modify your criteria as you see what you like and don’t like
3. Typically you should see between 5-10 apartments; less than that and you may not have done enough research, more than that and you may be looking for something that simply isn’t available in your price range.
4. Fall in love with an apartment/ lose sleep over it – I don’t need to go into too much detail here, you’ll know it when it happens
Put in an offer, Negotiate,
1. Base this on fair market value and not the seller’s asking price. Their price might be high or it might be accurate or it might be low, but the market will determine what it sells for. Your broker will help here by giving you a list of similar apartments that recently sold in the neighborhood or building, called "comps"
2. Don’t always underbid just for the sake of underbidding; this is called bottom-feeding and it leads to a conversations of the 10 wonderful apartments you’ve lost
3. Be realistic when you make your first offer and expect to receive a counter offer – don’t stubbornly stick to a price just for the sake of "winning"
4. Throughout the process, keep in mind what you believe the apartment is worth both on the market and to you personally and work towards that price.
5. Don’t expect the rules of business to apply here
6. If you don’t have an attorney by this point, get one!
  1. And make sure s/he is a New York City attorney who comes highly recommended. An attorney who is not based in New York City and ESPECIALLY is not a real estate attorney can very easily overlook some important details that can cost you thousands.
Agree on an accepted offer and go into contract
1. Once you have come to an agreed upon price and terms, the sellers attorney will generally write up the contract and send it to your attorney.
2. At this point you r attorney will study the contract, the original offering plan and amendments, and the buildings financials. It is his/her job to inform you of anything he/ she finds, and it is up to you to choose to proceed or not. Generally, it is not their role to advice you to proceed or not, but rather to make you aware of the results of their study. If it is one of the extremely rare instances that they advice against proceeding with the deal – don’t proceed!
3. It is also during this period that you will determine the closing date.
Execute the contract and put money into escrow
1. You will sign the contract first and either cut a check or wire money into your attorney’s escrow account.
Put together your board package
1. Every building you will move into requires a board package, generally consisting of some financial and employment information
2. FOR A CONDO
  1. These are usually pretty easy. The board has what’s called "the right of first refusal" meaning that they have the option to buy the apartment instead of you. In practice, this doesn’t mean much, and it is incredibly unlikely that the board approval will be anything more than a rubber stamp. So fill out the paperwork send it in and take it easy. Once you got the accepted offer; you’re pretty good to go
3. FOR A COOP
  1. Ah yes, the coop board package; let the fun begin. Be prepared to divest every piece of information about your financial holdings, provide work references, personal references, and more. In general, they are looking for you to meet the financial requirements mentioned in part 1and not practice drums at 3 o’clock in the morning; but every coop is different. Your broker will put this together for you and give you a list of documents you will need
  2. You wait. And eventually the coop board will get back to you with an answer- this will either be no or yes, lets move on to the interview.
  3. The interview –Truth be told, these aren’t nearly as bad as people think; just follow a couple guidelines. And anyway if they asked you for the interview it’s already a good sign.
    1. Dress like you were going to a job interview – so business formal will do the trick
    2. Show up early
    3. If there’s more than one of you, i.e. a couple, choose which one of you will answer what kind of question. For instance one of you can take financial questions and one can take personal. This way you won’t be tripping over each other’s words
    4. Give brief, to the point, answers.
    5. Don’t ask lots of questions – these can easily backfire. Something that may seem relatively harmless can sometimes offend a board member. Instead, have your broker find out the answers to your questions about the building before the interview
    6. Do ask one question
      1. At the end of the board interview, they’ll ask you if you have any questions, and you should ask a really bland one. One that I like is "Does the building have a holiday party?"
    7. Smile and try to relax
    8. Wait a couple days for the answer – time can vary on this so be patient
Close on the apartment
1. You’re done! Basically...
2. First, you’ll want to do a walk-thru of the apartment a day or two before the closing – this is pretty straight forward.
  1. Turn on the water in all the sinks and showers
  2. Turn on the dishwasher
  3. Test the stove
  4. Look for any major damage to the walls, ceiling, or floors.
  5. Check for any cracked glass
  6. Check to see if there was any damage when the previous owners moved out.
  7. And just generally, do a visual inspection of the whole apartment
  8. Keep in mind that any small details that can been fixed for a couple bucks aren’t worth holding up the closing for.
3. The Closing –
  1. At this point you and a whole bunch of people meet to sign the contract, usually at one of the attorney’s offices. These people include your broker, your attorney, your mortgage banker, the title insurance rep, the seller, the seller’s broker, and the seller’s attorney.
  2. You’ll sign lots of stuff, the attorneys will work out little credits both ways, like prorating taxes and monthly charges, and then, finally when the title company gives the ok- It’s yours.
4. Congratulations – you now own a piece of the greatest city in the world.- You own your first NYC Apartment
Move in and get tipsy at your housewarming
1. And if your broker was good, invite him too!