STEP ONE - Estimate your Budget - Knowing your budget saves you time and effort. When you know your limits, you won't waste time looking at houses that are beyond your budget. NYC real estate offers an abundance of townhouses in various price ranges.

STEP TWO - Mortgage pre-approval - Start the process receiving your pre-approval from your mortgage bank or broker. Call a mortgage broker, banker, or real estate broker. Home sellers react favorably to potential home buyers with pre-approved mortgages. When you have arranged your mortgage, you will have a firm idea of your price range and your ability to meet the financial commitments associated with owing a townhouse.

STEP THREE - Choose your Neighborhood -Building a list of needs and wants is the first step to finding the ideal neighborhood that will facilitate your lifestyle requirements . Do you need to be near primary schools? Do you want to be just a short distance from your work? Answering as many questions prior to beginning your search will help you narrow down the options best tailored to you.

STEP FOUR - Know your home - Do not buy a townhouse until you have checked into all the details about the property. Look at the condition of the home and property. Get a home inspection.

STEP FIVE - Hire a Real Estate attorney -Every buyer must obtain the services of a real estate attorney to protect themselves from contractual obligations and potential future liabilities – an expert in the field. When you are buying Manhattan real estate, the best choice is to hire a local attorney that has a history with townhouses and the interfaces involved. They know the Manhattan market and they can protect you.

STEP SIX - Make an Offer - Discuss the negotiation process with your real estate buyers agent. With New York City real estate it is best to submit offers in writing and then the negotiation takes place via email and telephone. The details of the deal i.e. price, financing, occupancy, closing date, and more should be documented in writing. These details must be worked out prior to submitting your offer and may be advantageous to your efforts especially if seeking to purchase in cash etc.

STEP SEVEN - Accept an Offer -Accepting an offer is a big step but it is not 'final' until all parties have signed the executed the contract. There is no legal obligation until the final signatures. If everything is in order including the engineers report things tend to move smoothly in a quick and efficient manner.

STEP EIGHT - Understand the Deal - Do not just 'accept' the deal because you love the home. A buyer has to be aware of all terms and financial obligations that come with the purchase. Buying a home is a long term commitment. Your agent and lawyer will help you with doing the 'due diligence' from every angle.

STEP NINE - Sign the Contract - The buyer signs the contract and then it is sent back to the seller's attorney for the seller to counter sign the document. A down payment of at least 10% (or more) will be expected at this point and it will be held in the seller's attorney escrow.

STEP TEN - Home Appraisal - When financing prior to issuing an approval the lender will schedule an appraiser to visit and estimate the homes value. The lender will expect an appraiser to put a value on the property then the mortgage commitment letter will be issued and you are clear to close.

STEP ELEVEN - Walk-Through - 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 TWELVE - Close the Deal - A closing is scheduled between the lawyers for both parties including the lender and title company.

STEP THIRTEEN - Make your Move - Moving into a New York City townhouse might take 1.5-5 months. Yet when you have experts working for you, the process is an easier one. In no time, you will be living in a terrific townhouse.

Wise Investment - The buyers must qualify for a loan but lenders look favorably on townhouses as an investment. Townhouses are an excellent investment overall. The tenant's rent will be income and banks will extend credit for 75% of the present rental income. Home owners who buy townhouses as investments will not be disappointed. Their rental income can offset the monthly mortgage payment.

Low Mortgage Rates - Mortgage rates for New York City townhouses are as low as for any residential property. Home buyers can get up to 95% financing without Private Mortgage Insurance (PMI). Since interest only products are available for townhouses, home buyers can get affordable mortgages. If a townhouse has more than four units, however, it will be classified as commercial property. Lending guidelines change at that point. Home buyers would have to put down 25% and the mortgage rates could be higher (approximately .375%). As well, for property evaluation, bank underwriters will emphasize the income more than the buyer's qualifications.

Closing Costs - Closing costs for a Manhattan townhouse will come in at 3-4% of the loan amount. This amount originates mostly from the 1.75% New York State Mortgage Tax – a requirement. People have avoided mortgage tax by having the seller's bank do a mortgage assignment. That process would, however, require the services of an exceptional lawyer and the agreement of the seller's bank.

The annual taxes for Manhattan townhouses can vary between $5000 and $6000. Every year, the NYC Council sets the tax rate for different classes of property.

For 2009-2010, the tax rate was 17.088% for Class 1, 13.241% - Class 2, 12.743% - Class 3, and 10.426% for Class 4. Home owners can determine their real estate taxes by applying the assigned percentage to their property's taxable assessed value.

The property tax assessment is a specific percentage of the market value. The taxable assessed value is the assessed value minus any exemptions.

The Department of Finance bases property value on three factors – cost, sales comparison, and income capitalization. The department must estimate all property values by January 5 of each year. This constant reevaluation is meant to reflect the ever-evolving New York City real estate market.

Cost

They use this method for specialty properties including utility properties. They estimate the value of the land and figure out how much it would cost to replace (or reproduce) the existing building on that land.

Sales Comparison

The Department of Finance must check into the recent sales of similar properties. Using this method, their officials can determine the 'probable' selling price of a property. The value of smaller, residential properties (such as 1-3 family homes) is determined in this manner.

Income Capitalization

This method is used for properties that produce income such as multi-family buildings and office spaces. The value is based on the income possibilities. The department looks into income and expenses as well as the capitalization rate (rate of return for investor). State law requires that the Department of Finance value condominiums and cooperatives as rental apartment buildings. The value is based on the estimate of income (rent from residents) received by the owners.

Class 1
Most residential property – up to 3 units - 1-3 family homes – office with 1-2 apartments – vacant land – condos not 3 stories

Class 2
All other residential property (or primarily residential such as condominiums)

Class 3
Property with utility company-owned property

Class 4
Any commercial or private property that does not fall into other three classes

2. State law requires that Finance assess property in each class at the assessment ratio.
The Department of Finance is required to assess properties in each class at the same percentage of value. The Department of Finance must multiply its estimated market value by the assessment ratio for your property according to its proper class. If the assessment ratio is 9% in Class 1, a $100,000 property will receive an assessment of $9,000. If a $100,000 property fell into Class 2 and the assessment ratio was 45%, the assessment would be $45,000.

3. The Department of Finance must follow specific assessment rules.
The Department of Finance is obliged by state law to follow specific assessment rules – unless the change is due to a physical increase (renovation, construction, demolition).

Class 1
Assessments on a property cannot be increased more than 6 percent each year (or more than 20 percent in five years).

Class 2
Assessments on properties with less than 11 units cannot be increased more than 8 percent per year (or more than 30 percent in five years). Assessment can change on properties with more than 10 units but the changes must be phased-in over five years.

Class 3
There are no assessment limitations in Class 3.

Class 4
There can be assessment changes but they must be phased-in over five years.

The Department of Finance offers several exemption programs. To encourage construction and renovations, they implemented 421-a-c and J-51. Non-profit organizations receive an exemption (420-a). As well, certain individuals can receive an exemption (disabled, seniors, veterans, and others).

Condominiums and cooperatives receive an exemption in the form of tax relief. Their taxable assessed value is reduced and this initiative reduces their taxes. The exemption reduces the base rate used to calculate their real estate taxes. Abatements are calculated in June after the new tax rate is set for the year.