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In NYC, most prospective home buyers tend to focus on co-ops and condo apartments. But another housing type tends to attract buyers looking for something different from the typical high-rise apartment experience, townhouses. They’ve been an iconic symbol of New York City’s high-class culture for as long as anyone can remember. From the elegant brownstones of Brooklyn Heights to the opulent limestones of the Upper West Side, townhouses are practically synonymous with wealth and prestige.
For these reasons, they tend to be in high demand by just about every home buyer and investor who can afford them. But as with any real estate listing, you can significantly increase your chances of securing a townhouse purchase by submitting the right offer to purchase. As you’ll soon see, the right offer isn’t necessarily the one with the highest price; it’s the one that’s submitted the right way.
What is a Townhouse?What is a Townhouse?
First, let’s get a working definition of a townhouse. Townhouses are multi-story homes that share one or two walls with adjacent properties but have their own entrances. While you might often hear them described as brownstones, this is a particular term that refers to townhouses built with the aforementioned reddish-brown sandstone, most of which come from the same quarry in Portland. Other types of townhouses, which you can find all across the city, include clapboard, limestones, vinyl-sided, and brick.
Out of all these townhouse types, brownstones are the most popular due to their iconic look. Brick townhouses are usually the second most popular, thanks to their charm and high durability. Both types have been a mainstay of NYC architecture for quite a while. It’s not too unusual to encounter some that are more than 200 years old. As such, they tend to be highly ornate with unique detailing that you won’t find anywhere else, which is a big part of what makes them so alluring for buyers.
How to Submit an Offer on an NYC TownhouseHow to Submit an Offer on an NYC Townhouse
Submitting an offer for an NYC townhouse is the same as submitting one for any other property (except for co-ops). Your buyer’s agent will perform a Comparative Market Analysis (CMA) to determine a fair offer price based on what like-kind homes are selling for.
Once you’ve agreed on an offer price, your agent will email it to the listing agent, along with all your offer terms, contingencies, and supporting documentation. The listing agent will usually reply within 24 hours to confirm that they have received your offer and will be in touch.
From there, it’s a bit of a waiting game that can vary in length from one seller to another. If there’s a lot of competition from other buyers, you may be in a bidding war. There may also be some back and forth between offers and counteroffers. Your buyer’s agent will handle all this while keeping you in the loop and running any big decisions.
Remember that you can walk away from the negotiations anytime until you have a fully executed purchase contract signed by both parties. In NYC, purchasing contracts are not legally binding until both parties have signed. Your agent will also include language in the footer of each offer letter/email that clearly states this is for negotiating purposes only and is non-binding.
What are the Typical Offer Terms for a TownhouseWhat are the Typical Offer Terms for a Townhouse
Typical offer terms for an NYC townhouse include your offer price, any contingencies (such as a mortgage or inspection contingency), your down payment percentage (if financing), and your desired closing date.
If you’re buying a multi-family townhouse with tenants on month-to-month leases, your terms should also specify which (if any) units should be delivered vacant upon closing. If you’re planning to rent out the property and it already has existing tenants, then you’ll want to examine the pros and cons of this. Having tenants already in place means you can immediately start collecting rental payments. However, you will need to honor the existing lease agreement, even if it means you have a negative cash flow. Many rental townhouses tend to be rent-stabilized or rent-controlled, meaning they’ll generally pay less than market value tenants.
What Documents Will I Need When Submitting My Offer?What Documents Will I Need When Submitting My Offer?
At a minimum, you’ll want to submit your mortgage pre-approval letter (if financing), a completed Submit Offer Form, proof of funds, and contact information for your real estate attorney. The more financially qualified you look, the better chance your offer has. This needn’t mean you have to make the biggest offer, just the one that looks most likely to close.
In NYC, Submit Offer Forms are fairly standard, including offers for townhouses or condos. However, it depends on the listing agent. Not all of them require to Submit Offer Forms and may request a REBNY Financial Statement. Your proof of funds should be at least 10% of the offer price in readily available liquid funds. This is the typical amount for a contract deposit and will show the seller’s that you’re willing to put skin in the game. Submitting your attorney’s contact information also signals to the seller that you’re very serious about the offer and eager to move forward.
Final ThoughtsFinal Thoughts
Townhouses are highly desirable properties. They tend to go for a premium unless they need some TLC. While it depends on the market, you can expect stiff competition when making an offer on a townhouse. Fortunately, you can give yourself the best chance possible by ensuring you are fully prepared and ready to move ahead with a fully executed contract.