In this buyers’ market when negotiating for a Manhattan co-op, condo or townhouse, having flexibility with regard to the date of closing (some sellers may want to close later rather than sooner depending on their circumstances) AND having cash (something I call FLASH) you will surely get you the best deal.
With regard to financing, many buyers and sellers believe that the purchase of a coop, condo or townhouse in Manhattan will either have or not have financing contingency. But there are actually three options when it comes to the loan financing provision.
The latest version, the co-op contract spells out these options and allows the attorneys to choose one of them. Although the standard condo and townhouse contract forms do not contain a similar provision, an experienced attorney could add it into a rider.
The options are as follows:
#1 Contract contingent upon purchaser obtaining a loan/financing commitment
#2-Contract NOT contingent upon purchaser obtaining a loan/financing commitment, but purchaser may use loan financing to complete the transaction
#3 purchaser may NOT use loan/financing (i.e. must all cash and can’t have a loan)
The existence of #3 is particularly important not only in today’s lending environment, but to leverage maximum negotiability. When placing an all cash offer the seller will want to know that it is, in fact, ALL CASH and that the purchaser will not even apply for financing.
Let’s face it, this is probably the worst time to sell an apartment in Manhattan. This is very good news if you are a buyer.
Virtually all apartments currently on the market-especially during the holiday season- are placed there by motivated sellers rather than sellers just testing the waters. One of the most powerful motivators for sellers is their kids. Kids here or on the way. I call it the crib effect.
As a buyer, keep your eyes open for bedrooms, alcoves or even closets with kids’ paraphernalia. Especially cribs. Quietly make note and negotiate accordingly.
Buyers who can pay in full in cash for their co-op or condo apartments are in the driver’s seat. Right now, being able to offer a seller a sure thing – with no surpriseson the way to closing – will go a long way to assuring you of negotiating the best possible deal.
Pair some flexibility with cash, and you’ve got the magic ingredients of what I call FLASH. Being flexible means being open to the seller’s needs in terms of setting the closing date – being ready to close immediately or allowing ample time for the seller to find a new home rather than demanding a quick move – offering to take care of needed repairs or accommodate the start of a school year. With FLASH, you’ll find that the door to your new home is open, ready and waiting.
If you’re like most people – who can’t afford a full-cash sale – you can still find yourself in the “most attractive buyer” finals. If you have great credit and can put down at least 20% on a jumbo conforming mortgage (up to $729,750 in New York), or at least 30% for higher mortgages, you’ll still set setting hearts aflutter. Pre-qualifying for an adequate mortgage is a fabulous move to round out your VIP buyer profile
