NYC
Buyers Guide
Buyer checklist
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Evaluate to know what you want to spend for a down payment as well as monthly expenditures ( real estate taxes, maintenance fees and/or common charges plus monthly mortgage payment etc.)
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Obtain a mortgage pre-approval (your broker can recommend a few)
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Select an attorney who specializes in New York City Real Estate (your broker can recommend a few)
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Prioritize your needs - space, light, views, building amenities, etc.
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Identify your timeline for moving
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Explore different neighborhoods to identify your preferred need
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Research transportation, schools, hospitals etc in the selected neighborhood(s)
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Building amenities research the house rules in terms of your needs (washer/dryer permitted, gym in building, pet policy, storage facilities, etc.)
We recommend working with a licensed real estate agent to represent you as a buyer. This is for your best interest when looking for a property and negotiating the deal. This will save you time, headaches and even money. You as the buyer don't need to cover any broker fees since this service is covered by the seller side. The commission paid by the seller is usually split between the broker representing the seller and the broker representing the buyer.
Work closely with your broker to gather support materials for you mortgage application and board package
Once apartment has been selected, review building financials with your broker/ attorney
Purchasing Process
First Step:
Seeking pre-approval for a mortgage: Typical time frame: 1 - 2 days
You must know how much you can spend before you spend it. Condominium apartments require at least 10% down; cooperative apartments generally require at least 25% down. However, every building is different. Approx. 30% of Manhattan's buildings are condominium buildings and the other 70% are cooperatives buildings (coop).
Second Step:
Finding an apartment: Typical time frame: 1 week - 2 months
Depending on what you are looking for, the length of your search will vary. The average person sees 5-10 apartments before deciding on one. Internet-savvy buyers save time by doing their 'homework' before their search. The average number of apartments viewed before buying is 4-5.
Third Step:
Negotiating on the Apartment: Typical time frame: 1 day to 1 week
Everything is negotiable so inquire about assessments, fixtures, window replacements, air conditioners, floors, appliances, washer dryers, etc.
Fourth Step:
Signing a Contract: Typical time frame: 2 days - 1 week
Generally, in a sales transaction, a New York City real estate attorney represents each buyer and seller. The seller's attorney draws up the contract for the buyer's attorney to review; the buyer's attorney does 'due diligence'-reading minutes, financial statements of buildings etc. The buyers sign the contract and forward the contract with a 10% deposit; the sellers execute the contract.
Possible contingencies: financing, board approval, closing dates (see our list of closing costs associated with buying and selling condominiums and cooperatives.). The quicker the contract can be signed, the better. A contract is binding only after both parties sign it.
Fifth step:
Applying for a mortgage: Receiving Commitment Letter from Lender. Typical time frame: 1 - 3 weeks
Mortgage applications cannot be processed without an executed contract. If an apartment is being financed, the board requires a commitment letter from a lender. These letters are generally the last items to complete and submit a board package/condo application.
Completing a Board Package or Condominium Application: Typical time frame:1 - 2 weeks
Cooperative apartment buildings require board approval before a closing can take place. Condominiums require an information packet to be completed before a closing can take place. In order to review a potential purchaser, the board of directors for a co-op demand extensive information in a board package.
Most boards request the following information: full financial disclosure (net worth) with supporting documentation, employment history, current salary, personal and business references, tax returns for the previous 2-3 years, credit history, etc. If a purchaser cannot or does not want to supply this information, he or she should consider to buy a condominium instead.
Board packages and condo applications are given to potential purchasers to fill out after a contract has been executed. If there is no financing, it usually takes about 2-3 weeks to gather the information for the board condominium application.
Sixth Step :
Submitting Board Package or Condo Application for the managing agent's review: Average time frame: 1-3 weeks.
After the buyer's real estate agent helps the buyer complete the board package, the real estate agent or the buyer will forward the package to the managing agent of the building. The managing agent will inspect the package to ensure it is complete. The package will then be forwarded to the board of director's of the condo or coop. (Coop only)the board will set a time for an in person interview.
(Coop only) Meeting with the Coop Board for an Interview: Typical time frame:
30 minutes - 1 hour
Co-op boards typically meet once a month, and some boards do not meet in August. Every board is different, but generally a board meeting will be held in the evening on a weeknight. Although a board interview may be granted, this does not guarantee board approval.
Receiving Approval from the Board: Typical time frame: 1 day - 1 week
After board interview, the managing agent will generally alert the seller's broker whether a potential purchaser has passed the board.
Last step:
Schedule a Closing: Typical time frame: 1-2 weeks
After board approval managing agents generally set the date for closings, and lawyers for sellers and buyers coordinate with the appropriate banks on available dates and times.
Typical time frame from the time an apartment is found, to the time an apartment closes: 1 - 2 months depends if it's a cash deal or a mortgage loan deal.
CO-OP vs CONDOS
Co-ops
A building owned by a corporation, comprised of the tenant shareholders of the building. Each tenant shareholder owns a number of shares in the corporation associated with his or her apartment rather than owning the apartment itself. The tenant shareholder has the right to occupy the apartment as his or her home by holding a proprietary lease to that apartment. In a co-op, the building and its tenants are subject to rules and regulations set forth in the by-laws of the corporation. If an owner would like to sublease his or her apartment or perform any alterations or renovations to it, he or she must get permission from the board of directors elected by the tenants in the building.
The monthly maintenance charges include real estate taxes, building maintenance and management fees.
Condominiums
Condominiums are classified as "real property". You, the buyer would get the deed, just as if you were to buy a house. As the owner, you may rent your apartment to anyone you wish. In order to rent it out an approval process is usually required, but it is not as difficult as it usually is with co-ops. In some cases the process and by-laws are stricter then others but generally condominiums are much more liberal when it comes to financing, leasing rules and regulations.
While in the rest of the country condominiums are very common, in New York City it is a rather new concept. There is still a shortage in affordable condominium apartments especially now that it has become popular with local and international real estate investors.
Real estate tax is charged separately from common charges that represent monthly maintenance fees.
Board Approval
In order to review a potential purchaser, the board of directors reviews extensive information from the buyer in what is called a board package. Most co-op boards typically request financial disclosure with supporting documentation, employment history, current salary, personal and business references, tax returns and credit history.
Preparing Your Board Package.
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Review the application and its requirements with your broker. Your broker will assist you in the collecting and assembling of your board package.
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Complete the application in its entirety
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Clearly and concisely answer all the questions
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Submit only the materials that have been requested
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Be sure to have reference letters written on either business or personal letterhead
Preparing for Your Board Interview
The interview provides the board with the opportunity to meet you and discuss your application in further detail. Board interviews can range from an informal meeting to a formal interview.
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Review your application prior to the interview
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Prepare yourself for a wide range of questions from personal to financial
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Couples should decide in advance who will answer which types of questions
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Arrive promptly and dress appropriately
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Clearly and concisely answer all questions. Avoid providing information that is not directly asked of you.
CLOSING COST (all numbers are approx.)
Co-ops
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Purchaser's attorney could range from $2,000 and up (consult with your attorney)
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Bank fees:Points 0-2.5%
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Application, credit, appraisal, bank attorney and miscellaneous: $1,600
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Short-term interest = up to one month max
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Move-in deposit: $500 - $1,000
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Managing agent or co-op attorney (recognition agreement fee): $600
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Lien search: $300 +
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Maintenance adjustment: up to one month max
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Mansion tax:1% of entire purchase price when price exceeds $1,000,000
Condominiums and Townhouses
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Purchaser's attorney could range from $2,000 and up (consult with your attorney)
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Bank fees: Points 0-2.5%
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Application, credit, appraisal, bank attorney and miscellaneous $1,600
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Short-term interest=one-month max
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Tax escrows 2-6 months
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Recording fees: $200 +
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Mortgage tax:1.75% of amount of mortgage on loans under $500,000; 1.875% of amount of mortgage on loans over $500,000
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Fee title insurance: approximately $450 per $100,000
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Mortgage title insurance: approximately $200 per $100,000
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Miscellaneous title changes: $300 +
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Violation search: $170 +
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Move-in deposit: $500 +
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Managing agent fee: $250 +