New York City Real Estate Buyers Guide

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Finding the right property, and determining how to pay for it are only the preliminary steps in what can be a daunting process. Learn how to purchase New York City real estate hassle free.

 

Many buyers deal with stress when buying a home or an investment property, as the process of purchasing real estate in New York City can be confusing and overwhelming without the right help.

Elika Associates agents make this process much less stressful and complex by providing advice and assistance for our clients. We have represented hundreds of buyers in New York, and as we do not offer any seller’s services, we avoid conflicts of interest to offer the best possible services.

Before buying a property, buyers should understand the different types of New York City real estate available in the city. Most of the apartments for sale in New York City are co-operatives. The main difference between a co-operative and other types of property is that a co-op apartment building is owned by a corporation, which consists of the building’s residents.

 

“Could i begin life again, knowing what I now know, and had money to invest, I would buy every square inch of Manhattan.” John Jacob Astor – America’s first millionaire

 

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REAL ESTATE BUYERS GUIDE


Finding the right home can be a daunting task for even the most financially-savvy person. After all, the place you choose will have to suit your needs and finances for years to come. Following a game plan and working with an Elika agent can simplify the process. If you are a foreign buyer you may want to visit our dedicated foreign buyers guide.

 

CONSIDER THE FOLLOWING STEPS:

 

When you purchase an apartment in a co-operative, you are actually purchasing shares in the corporation. You do not legally own the apartment, but you do own part of the corporation that owns the apartment. Each apartment's value in shares is calculated according to rules set by the Board of Directors. Prime real estate is valued at a higher number of shares. The Board of Directors runs each co-operative building, paying for its mortgage, taxes and upkeep. The money that you pay for your shares goes towards these costs. However, in order to join the co-operative, you will have to be approved by the Board.

Condominiums are another popular option. A condominium is a more traditional type of property, as buyers actually purchase the real estate itself. As such, the buyer needs to pay real estate taxes on the property. There are fewer condominiums than co-operatives for sale in New York City.

Different property types carry different advantages for buyers depending on their goals, financial resources and other factors. The main advantages of a co-operative are:

Co-operative apartments are generally less expensive than condominiums. Taxes are also included in the cost, so buyers often have simpler billing arrangements when buying this type of property. However, a co-op's Board of Directors may require a large down payment.

Co-ops are generally very well-maintained. As the building's owners are its tenants, there is a strong incentive to keep all apartments in good condition to increase the value of all of the building's shares. It is still important to visit a co-operative in person with an experienced agent before purchasing in order to choose a high-quality apartment.

About 80 percent of the apartments available in New York are co-operatives, so buyers who consider co-operatives along with condominiums will have a wider array of choices when working with a qualified buyer's agent.

Condominiums have an entirely different set of advantages

There is no Board of Directors with a condominium, so the purchasing process is much simpler and quicker. Building rules are often much more relaxed, especially when it comes to residency. For instance, some buyers who are moving to the United States may have money in foreign accounts, and these buyers have an easier time purchasing condominiums than co-operatives.

Condominiums require less money down. Mortgage lenders are willing to loan money with a smaller down payment for buyers due to the high demand for condos. In New York City, buyers can often finance condominiums with a down payment of only 20 percent. However, mortgage rates are sometimes higher when a down payment is relatively low.

Condos are also easier to sublet, as renters do not need to be approved with a Board of Directors. This makes condominiums a much better choice for buyers who are looking for investment properties.

When buying a home, you should consider how your apartment type will affect its long-term value. Elika Associates agents will help you choose the right type of property and can explain how the buying process differs between these two main types of New York City real estate.

STEP ONE - Calculating Your Budget

Time estimate: 1 - 3 days

Before you start searching for the perfect home, you need to calculate how much of your weekly or monthly salary you can spend on a mortgage payment. Once you have a figure in mind, you need to estimate how much it will cost to maintain an apartment, including monthly common charges, repairs, taxes and utilities. Then, you have to factor in closing costs and your down payment, which can run from 10 percent to as much as 20 percent. Co-ops often ask for more money down than condos.

 

STEP TWO - Brainstorming

Time estimate: 1 - 2 days

After you have decided how much you can afford for your monthly expenses and a down payment, you need to make a list of your priorities, preferences and needs.

How large should your apartment be?
How many bedrooms do you need?
What amenities do you need?
Where would you like to live?

This list will help you determine how much your new apartment will cost. If you are using an Elika agent, your representative can take this list into account while matching you up with as many of the better apartments as possible that fit your budget and priorities.

 

STEP THREE - The Pre-Qualification Process

Time estimate: 1-3 Days

The next step in the real estate purchasing process is to contact a mortgage broker or banker to help you get pre-qualified for a loan. To prove that you are a serious buyer, get a pre-qualification letter to show your financial standing, which will prepare you to start searching in earnest. At that point, you will be ready to submit an offer once you find the perfect apartment. Sellers take offers from pre-qualified buyers more seriously than offers from prospective buyers who have not been pre-qualified. Acquiring a pre-qualification letter is a simple service that banks or mortgage brokers provide for free.

 

STEP FOUR - Searching and Viewing the Apartment

Time estimate: 1- 6 Months

The length of your apartment search can take days, weeks or even months. It depends on how selective you are and how stringent your preferences maybe. Most buyers will see 15 to 20 apartments before making an offer. An Elika buyers broker would be happy to represent you in your search if you do not have time. The broker can visit the apartments or set appointments for you to visit them. This can save you hours of searching through newspapers or online advertisements to find the perfect place.

If an Elika agent is searching for you, ask for a short list of the most promising apartments. You or your agent should visit as many properties as possible. Do not be fooled by advertisements. You absolutely must see the apartments firsthand before making an offer.

 

STEP FIVE - Offers & Negotiation

Time estimate: 2 Days - 2 Weeks

In New York City, an offer can be made verbally or in writing. When you find your ideal apartment, it is time to place your offer through your Elika agent. Your agent will submit your bid to the sellers agent or directly to the seller.

The seller might think your offer is too low. In that case, you might receive a counteroffer. This negotiation can lead to a mutually agreeable price, terms and a closing date. Negotiations are affected by market conditions. If the market is crowded with available apartments, negotiating is easier. If there are not as many apartments for sale, negotiations might not work. An Elika agent can help you with negotiations by generating a comparable market analysis report so that you understand the properties value and the likelihood of negotiations. Apartments are usually sold as-is. That means how you see it is how it will be sold to you. If you want perhaps the furniture in the apartment or different fixtures, you need to negotiate for them before the sale. Once you finalize the price, your agent will put together a deal sheet that lists the price and the agreed-upon terms of the sale. Remember that nothing is guaranteed and additional offers may still be entertained until a contract has been countersigned by the seller even if you have a negotiated price.

 

STEP SIX - Hiring an Attorney

Time estimate: 1-3 Days

Buyers and sellers are represented by attorneys in New York City. The sellers attorney will put together a sales contract. Your attorney is needed to review the buildings financials, bylaws and legal structure to assure that you can accept the terms. An Elika broker can help you find a real estate attorney who has experience in Manhattan.

 

STEP SEVEN - Mortgage Financing

Time estimate: 3 - 8 Weeks

When you and your attorney examine and approve the sales contract, you must sign it and return it with a deposit check that is usually around 10 percent of the purchase price. However, this is only a guideline. The seller may have different terms. The sellers attorney will deposit the check into escrow until the sale is closed. When the seller signs the contract, the deal is considered fully executable and binding. This can take up to three weeks depending on the terms and how quickly the sellers attorney performs the due diligence required to seal the deal.

At this point, you need to proceed with your loan application if you are receiving financing. Your Elika agent can help you find a mortgage broker. If you pre-qualified already, it is likely that you will use the company that pre-qualified you. You will be required to provide these documents:

An application
A financial statement signed by a CPA
All supporting documentation for your financial statement
Three years of tax returns
Bank statements
Professional and personal reference letters
The contract of sale
Any necessary bank documents showing your loan is in place.

 

STEP EIGHT - Board Application and Interview for Condo & Coops Resales Only

Time estimate: 2 to 3 Weeks - Board application submission and approval in the case of a Condo or Co-op board interview request.
Time estimate: 30 minutes to 1 hour for a Co-op board interview.

You need to submit an application to the board of directors of the co-operative or the condominium building when purchasing a resale property. When buying in a New Development board approval is not required. The documents are generally the same for a condo and co-op, but their review is different. The application includes these documents:

Application forms
Financial statements
Tax returns for two years
Bank statements
Reference letters
Your loan commitment letter and any other bank documents.

Incomplete applications can be denied, so be sure to include everything. If you are buying into a coop, the next step is an interview with the board of directors. Treat this like a business meeting. You receive a decision within 48 to 72 hours. Your Elika broker can help you prepare for the interview.

 

STEP NINE - Walk-Through

Time estimate: 30 to 60 minutes on the day before or the day of closing.

It is essential to inspect the property before closing. Verify that the appliances, faucets, light fixtures, plumbing and outlets are all working. Make sure the seller has left or is preparing to move. Your Elika agent can help you complete the walk-through.

 

STEP TEN - Closing

Time estimate: 1 to 2 weeks after board approval.

The buyer, seller and their attorneys must gather to sign the remaining documents for the closing. The title is transferred and the buyer is given the deed when the seller receives the certified check for the balance. The entire real estate purchasing process can take anywhere from two months to one year.

While some buyers are bogged down by paperwork when buying a home, Elika agents make the process hassle free. We understand why different properties appeal to different buyers and how to present you with properties that fit your lifestyle. We make sure that our clients understand the purchasing timeline, and by keeping them informed every step of the way, we keep the process relaxed. As we are familiar with New York neighborhoods and properties, we can also offer a professional, experienced point of view, which is valuable when negotiating, financing and applying.

New York is one of the most culturally diverse cities in the world, and with hundreds of beautiful neighborhoods, limitless food and entertainment options and relatively stable property values, it is easy to see why people choose to buy New York real estate. However, it ís also easy to make simple mistakes when buying in the city. Proper buyer's representation from Elika is more than a nice touch it is an essential tool that home buyers need to use to limit stress while getting the best possible deal.

It can take some buyers months or even years to find the right home in New York City. However, the purchasing process is much easier and in most cases, much faster with the right exclusive buyer agent.

When choosing a property, you will need to decide whether to restrict your search to condominiums or co-operatives. You will also have to understand property value to avoid a bad deal, and whether you are buying a home or an investment property, you will also need to know key information about different neighborhoods. In order to find a great property, you may have to consider dozens of homes, but an experienced real estate buyer agent will help you narrow your search down to properties that fit your lifestyle.

As a member of the Real Estate Board of New York (REBNY), we have access to all available New York real estate listings. Our agents work diligently to provide you with a frequently updated list of potential properties. By checking into the facts of each property before presenting it to our clients they are able to provide accurate information about price, investment potential, lifestyle suitability and more.

Most buyers will need to apply for a mortgage. This is often one of the most confusing parts of a purchase, as you will need to consider different types of mortgages and different mortgage providers in order to get a good deal.

We will provide advice and lender recommendations, taking out much of the stress associated with home mortgages. We can help you start to look for a mortgage during negotiations, which will cut down on the time that it takes you to complete your purchase and start enjoying your property.

In many instances, buyers start negotiating while looking for financing. During the negotiations, you will make an offer on a property, often including a list of essential repairs or other actions that the seller must take before the sale is finalized. The seller will typically make a counter-offer, and the process can go on for several days or weeks in some cases.

Elika Associates buyer's agents will perform a comparable market analyisis and advise you on your offer, improving the chances that the seller will accept quickly. We will also make sure that counter-offers are fair. As we specialize in New York real estate, we understand the real values of apartments in the city. We only provide buyer's representation and we have a strong incentive to help you get the best possible deal on your new property.

After negotiating, we will help you through the closing and explain all of the documents and paperwork that you will need in order to close on your new home. Our agents will handle many aspects of negotiations and closings in order to save you time, but we will always give you the information you need to make smart decisions about your purchase.

New York City buyers usually face a lengthy application process, as each co-operative's Board of Directors decides whether to approve a new building resident. The Board may deny a buyer who has insufficient proof of income or for other reasons, depending on the building's rules.

Filling out an application correctly is often a time-consuming and stressful process, especially if you are not sure what to include. However, approval from a Board is one of the final steps that buyers need to take in order to successfully purchase properties in New York City, and as with all other steps in the purchasing process, a real estate agent can help.

You can easily plan for an application if you know what to expect, and Elika Associates buyer's agents will keep you informed so that you can apply successfully. You will generally need to include two years of tax returns, personal and professional information, proof of financing, a signed purchase contract and other detailed financial documents, depending on the policies of the Board of Directors. We will help you assemble an attractive application package and submit it to the building's management agent.

Co-op applicants will also need to perform an in-person interview with the Board of Directors. Elika buyer's agents will help you prepare for your interview, eliminating much of the associated stress and improving the chances of a fast, successful purchase.


BUILDING AND APARTMENTS TYPES

 


Studio: The smallest standard size apartment offered. Features one main room, which is used for main living and sleeping area. The kitchen and bath are usually separate.

Alcove: A small half a room or area adjoining the living room. Often converted to an additional separate room or used as dining area.

Junior One: An alcove studio that was converted to a small one bedroom or a smaller then standard size one bedroom.

Junior 4: A large one bedroom with an alcove used for dining area or converted to an additional room. Also called a flex or convertible two-bedroom apartment.

Flex 3: A two-bedroom apartment with an alcove in the living room that is convertible to a room.

Classic 5, 6, 7 etc.: The Classic apartments are usually in prewar buildings and are built old fashion style, with maid's rooms and formal dining rooms. For example a classic 6 would have a total of 6 rooms. A living room, kitchen, master bedroom, second bedroom, maid's room and a dining room.

Loft: Large open space with high ceilings. Typically found in former commercial buildings that were converted to residential.

Duplex :An apartment with two levels or floors.

Triplex: An apartment with three levels or floors.

Condominium Buildings
Individual units are owned privately, whereas common areas offer shared ownership. Condominium buildings often include amenities such as laundry facilities and fitness areas, and some luxury buildings include pools and other additional offerings. Some condo owners will sublet their units to renters; however, all new residents must apply to the Board of Directors for that particular condominium development in order to move in.

Cooperative Buildings
A building that is owned by a corporation and managed by a coop association. This special type of arrangement allows apartment owners to share in the ownership of the corporation. People who own these apartments are called proprietary lessees. In some cases, the owner may sublet their apartment to a renter, but the application process is so lengthy and acceptance so difficult that it doesn't happen often.

Pre-War Buildings
If a building was built before 1945, it is considered pre-war. At 10-20 stories tall, they are mid-size as far as apartment buildings go. Some buildings might have a doorman. The advantages of living in a pre-war apartment often include hardwood floors, spacious rooms and higher ceilings. Many also have a fireplace.

Post-War Buildings
Very popular for the artistic type, loft buildings were originally used as warehouses, factories or manufacturing centers. Converted into residences, the staples of these apartments are high ceilings (sometimes up to twenty feet) and wide open floor plans. Some even have columns or other ornate decor. Greenwich Village.

Loft Buildings
Very popular for the artistic type, loft buildings were originally used as warehouses, factories or manufacturing centers. Converted into residences, the staples of these apartments are high ceilings (sometimes up to twenty feet) and wide open floor plans. Some even have columns or other ornate decor. Greenwich Village, Chelsea, SoHo and Tribeca are popular areas for loft buildings.

Brownstones
These townhouses were constructed in the 19th Century, made from brown sandstone. They have below-level entrances, which are sometimes called English basements, and many have a garden at the back. These homes have many charming features of the times, and maintain that old-fashioned feel.

Townhouses
Townhouses are usually single-family homes, up to four stories high. They can be freestanding or in a building of between 4-6 stories. People who move into town homes are afforded a privacy that is rare in New York City, and as such, these homes can be quite pricey. However, many people say the price is worth it, since a townhouse exudes a charm that other dwellings just cannot compare with. Many townhouses have extras, including a private back yard, eat-in kitchen, fireplace, expanded living space and classic decor. Best of all, residents purchase townhouses without the need to go through a co-op and its lengthy application process. Most townhouses were built in the late 19th century through the early 20th century.

Walk-Ups
The basic of the basic in terms of residences. They do not have any elevators, doormen, or luxury amenities, and some are not of the best quality. Their original function was multi-family housing and they keep the same function today. Most are pre-war buildings of five or fewer floors.

 

QUIK STEPS TO BUYING NEW YORK CITY REAL ESTATE

Finding a property, and determining how you’re going to pay for it are only the preliminary steps in what can be a long process. In general, terms, buying a home in New York City involves the following steps:

  1. Select a New York City Attorney
  2. If you plan to finance, search out a Mortgage company and pre-qualify for a loan
  3. Decide on your desired neighborhood(s) and begin your search for a Condo or Co-op
  4. Research and perform a comparable market analysis to estimate fair market value for the property
  5. Make an oral offer for purchase
  6. Make a written offer which serves to formalize the intention to buy
  7. Wait for the seller to respond with a counter offer
  8. Negotiate with the seller until common ground has been reached
  9. Pay the down payment (typically 10% or more of the purchase price) and sign the contract
  10. Submit an application to the co-op or condominium representative
  11. Upon approval coordinate and attend closing of legal contracts.

 

BE PREPARED WITH THE FOLLOWING DOCUMENTATION

  1. Personal and Business reference letters (Original Copies)
  2. Pre-approval letter from your Mortgage bank or broker.
  3. Most recent checking and savings bank statements
  4. Previous two years tax returns
  5. List of other liquid or non-liquid assets
  6. Most recent 401K or retirement fund statements (if applicable)
  7. Most recent asset portfolio statements (if applicable)
  8. Employment verification letter confirming your start date, annual salary including bonus
  9. If self employed – letter from your CPA or attorney verifying your salary and net worth

 

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