We begin by assessing your specific needs, finding the ideal condo, performing a comparable market analysis, negotiating on your behalf and finally consulting you through the board application in the case of a condo resale. When purchasing a condo in a New Development no board application is required.
While condominiums can be found around lakes and golf courses in many parts of the country, New York City condos are situated in high-rise buildings, one atop another. But these condominiums are still considered real estate, and generally, the same laws on sales, financing, and taxes that apply to other properties also govern them.
Before purchasing a condo in NYC, here are some things you need to know. In Manhattan, each condo unit in a multi-dwelling building has its block number and tax lot. Those parts of the building that are not part of your particular unit are called common elements. These include the outdoor areas and the land the building is on, as well as inside areas like the lobby, hallways and utility and laundry rooms.
When you own a condo, you also own a specified percentage of these common elements. Accordingly, the whole building is collectively owned by the unit owners. Each unit owner pays a monthly maintenance fee called common charges which go to the operating expenses for the building. However, each unit owner is required to pay his or her own real estate taxes.
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We are compensated as any other Broker and paid through the proceeds of the sale. Customarily, fees for real estate brokerage have been “built in” to the purchase price of the property. This means that a typical purchase will result in no additional out-of-pocket fees for you!. Technically when purchasing a property, you are paying to have representation or not to have representation.
The question is: Would you prefer to pay to have someone work for you or the seller?
When an apartment sells, half of the 5% or 6% commission is paid to the real estate company that brings in the Buyer and the other half is kept by the company listing the property for sale, representing the Seller.
But when the real estate company which lists the property also brings in the Buyer, that real estate company keeps both the sides of the commission.
You may be thinking the higher the price you pay for the home, the higher our commission will be, so how does this work? We have a fiduciary responsibility to get the home at the best price for you, not the highest commission for ourselves. We know that our business expands more with satisfied clients, and recognize the long-term value of their equity position.
REMEMBER, you would not hire your spouse’s attorney to represent you in your divorce. The same applies to Real Estate.
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If you are buying a home in NYC, should you hire an agent or broker to represent you?
The quick answer is yes. – StreetEasy
How New York City Condos Operate
In accordance withWhen a building is put up as a condominium or converted into this type of property, the developer or owner of the building has to provide an offering plan to the state attorney general's office giving the specifics of how the building will be run. He or she must also provide other documents including the condominium bylaws and declaration. The latter document will detail the percentage of common elements for which each unit is responsible. It will also specify where a unit ends and the common elements begin.
This can vary from building to building. In some condos, the unit owned includes the surface of the interior walls and everything that that surface wraps around, while in others, units can extend as far as the center of any in accordance with the building's bylaws, New York City condos are run by a board of managers that are elected by the condo owners during a once-yearly meeting. In a number of buildings, each condo gets one vote, but in many others the number of votes is dependent upon the percentage of common elements that are owned, which is assessed according to such factors as unit value, location and size.
Unlike with co-ops, the condo board does not have the power to reject a prospective buyer and the only way the board can head off a deal is to step in and buy the property themselves. This right of first refusal is seldom employed because it requires a vote from all of the other unit owners, in addition to the fact that the board must come up with the money to buy the unit.
There have been a number of court cases which have revolved around the actions of condo boards. Generally, the courts have held that the board cannot be held personally liable for the operating decisions they make as long as their members are operating in good faith. Still unresolved in the courts is whether or not the board can assess a flip tax on those who are selling their units.
Condo Purchasing Process / Timeline
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.
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.
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.
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.
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.
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.
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:
A financial statement signed by a CPA
All supporting documentation for your financial statement
Three years of tax returns
Professional and personal reference letters
The contract of sale
Any necessary bank documents showing your loan is in place.
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:
Tax returns for two years
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.
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.
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.
Tips on Buying Your First NYC Condo
It's important to approach buying your first condo as if you were buying your first home. There's no reason to stretch yourself financially, and it is generally acceptable to put only 20 percent down, so you do not put yourself in jeopardy of owing more than your condo is worth. It's also advisable to obtain a fixed-rate mortgage, so that you have monthly housing expenses that remain stable.
If you want to be conservative, don't spend over 35 percent of your pretax earnings on mortgage, property tax and home insurance combined. If you are a first-time buyer in your 20s or 30s you may feel tempted to extend yourself financially because you expect that your job income will grow quickly in the years ahead, but keep in mind that you may have children and that can change your mind set when it comes to work and boxing yourself into a large mortgage. To plan for the future, it's best to come up with a budget incorporating the proposed mortgage and different variables like both spouses working full time, one employed part time and one remaining at home for a couple of years.
Even if you don't have or plan on having children, it's advisable to be cautious. Who is to say that unemployment won't spike in your industry, or that you won't have a mid-life crisis that prompts you to change careers? Even professionals and government workers who feel their income is protected need to plan for the possibility of being financially derailed by unexpected circumstances.
QUICK LINK: New York City Condo Closing Costs for Buyers
Contact an experienced and knowledgeable buyer agent that specializes in Condos for a free consultation.