Archive for The Process
Steps to Purchasing a Co-op or Condo Apartment in Manhattan
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Assuming that you’ve found the property on which you wish to place an offer you’ll find the steps to purchasing a co-op or a condominium in Manhattan are very similar.
By now, to put yourself in the strongest possible negotiating position, you’ve put together your buying team, spoken to a bank or mortgage broker (if financing) and have been prequalified for a mortgage.
- Offers are made in writing and/or orally in New York City. When you have found the right property, a bid or offer will be placed through your buyer’s agent. He/she will convey your offer to either the seller’s agent or to the seller directly. The seller may “counter” your offer. This will begin a negotiation process that will eventually lead to a “meeting of the minds,” at which point price, terms, and closing date have been agreed upon.
- A real estate attorney is required in all property transactions in New York City. Contact an attorney familiar with real estate in Manhattan to represent you. The seller’s attorney will begin preparation of a contract of sale, and during that time your attorney will begin to examine the financial condition of the building in which you wish to purchase. Your real estate agent can assist you in finding experienced attorneys.
- After your lawyer concludes that the financial condition is satisfactory, that the by-laws of the building are acceptable to you, and that the contract of sale is also acceptable, your attorney will allow you to sign the contract. At that time you will usually be required to present a deposit of 10% of the purchase price. The contract plus the deposit will then be forwarded to the seller for signature . This money will be held in the seller’s attorney’s escrow account until closing. It is important to note that until all parties have signed the contract, and it has been delivered, the seller can still entertain and accept other offers.
- If financing, you should move forward with your loan application. If you’ve already been prequalified, this process will be greatly simplified.
- You will, by now, have received from your real estate agent the board requirements and application materials. The application materials can be similar for a cooperative and condominium. However, the actual process is quite different. You will need to complete all of the required materials which typically include: an application, a financial statement signed by a CPA, all requisite support for your financial statement, three years of tax returns, bank statements, letters of personal and financial reference, letters of professional reference, the contract of sale, bank documents (if financing) indicating that your loan is in place, etc.
- When your “package” is finished, it will be reviewed and then, assuming it is complete, it will be forwarded to the seller’s agent or directly to the building’s managing agent for review. Upon determination that it is in order and that credit checks were acceptable, it will be forwarded to the Board of Directors. No applications will be accepted by a Managing Agent unless they are complete.
- In the case of a cooperative, if your application meets initial approval, you will be invited to be interviewed by the Board or by an interviewing committee. This is a serious matter and not to be taken lightly. It should be treated as a business meeting.
- After approval by the Board, you are ready to begin planning for a closing!
The steps to purchasing a co-op or a condominium in Manhattan are very similar. Let’s assume that you have found the property on which you wish to place an offer. By now, to put yourself in the strongest possible negotiating position, you’ve put together your buying team, http://realestategeezer.com/category/buying-guide/build-your-team/ spoken to a bank or mortgage broker (if financing) and have been prequalified for a mortgage.
In the case of a condominium, there is generally no formal interview. Your application will be reviewed, and if all required materials are included and in order, an approval is typically granted. The entire process can move quickly in a condominium, and assuming a loan can be secured in a timely manner.
It’s a Buyer’s Market – Manhattan Prices are Down and Cash Is King
Posted by: | CommentsBuyers 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 surprises on 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
The Search – Starting Out Right Can Save Serious Money and Make You the Favored Buyer
Posted by: | CommentsVisiting open houses, scanning the Internet sites and dreaming of where you’ll place your sofa is all well and good, but when it’s time to get serious about buying a new home, there are some basic steps that will position you to find the right place and get the best deal.
Once you’ve decided you want to buy and that your financial basics look sound, the smartest thing you can do is put together your own dedicated search team – a buyer’s broker, a real estate attorney and a bank/mortgage broker. Choose carefully and make sure they are well-versed in real estate in New York City. Ask them about their experience.
Buy Into a Buyer’s Broker
A buyer’s broker will help you at every step of your purchase, from helping you figuring out what kind of apartment you want at the price you can afford, to the subtleties of the co-op interview.
Make sure you like your broker – you’re likely going to be spending a lot of time together. Be sure that he or she listens to you and really hears what you’re saying. Otherwise, you’ll spend a lot of time seeing spaces you’re not interested in. Want a big kitchen? Lots of light? Outdoor space? An older, pre-war building with lots of charm or a brand new, sleek and modern place, a view of the Empire State Building? If he or she can’t get into your head, the search process won’t be as pleasant as it should be.
Be aware that most agents in New York are seller’s brokers. If you meet an agent at an open house, for example, you need to keep in mind that you’re speaking with the seller’s representative. Any hints you give about how much you’re prepared to spend will be reported back to the seller – in which case, you’re likely to spend top dollar.
Why? Because you’re chatting with a seller’s agent, whose top priority is to show the property in its most favorable light and negotiate the highest price and best terms for the seller. New York law is crystal clear on the duty of listing and selling agents – they must provide “undivided loyalty” to the seller. So if they can figure out how much you’re prepared to spend, their job is to make sure you spend every cent.
The seller’s agent may offer to have another agent at their firm to act as your representative in making an offer and negotiating for the purchase. That’s perfectly legal, but being asked to step in and assist the buyer at the last minute may not be the ideal scenario. First and foremost, it doesn’t give the buyer the advantage of having a dedicated advocate for his or her needs nor can he or she negotiate as effectively as a buyer’s broker who has been working with you all through the process.
Be Prepared
The other representatives you’ll need when you want to buy a property are a banker/mortgage broker and a real estate attorney.
Finding a good banker and pre-qualifying for a mortgage will not only make you an attractive buyer to all those folks hoping to sell their homes, but it will also ensure that you’re looking in the right price range. A loan officer should request your credit score to do a pre-approval letter, stating that you qualify for a mortgage up to a stated amount (you’ll need to pay for a credit check, usually $20 or less), and be able to explain what kind of rates and mortgages her or his company could offer you today along with what information they will need if you apply for a mortgage with the company. You’ll know exactly what you can – and can’t afford. You won’t fall in love with something you can’t have – and when you do find that perfect place, you’ll be in a strong position to negotiate for it.
Locating a real estate savvy attorney will also smooth the way. An attorney in addition to being expert in New York City real estate, should be well-versed in reviewing co-op and condo financial statements (your accountant could help here), should plan to read its board meeting minutes to look for items like upcoming expenses, lawsuits pending etc. and be familiar with the latest inclusions/exclusions in NYC real estate contracts.
So, first things first.
When you decide to start looking, take time to find the right folks to ensure your search is a success– your buyer’s broker, real estate attorney, and loan officer. You can call around, ask friends – and even ask prospective members of the team to recommend others they’ve worked with in the past.
With your team lined up, you’re ready to look, and to buy. Now, about that sofa …
