Buy the Right NYC Condo Apartment for the Right Price. Elika is a complimentary buyers service.
We specialize in representing buyers in pursuit of New York City Condos through-out Manhattan and Brooklyn for all budgets, from charming village studios to the finest luxury Condo Residences.
We begin by assessing your specific needs, finding the ideal condo, performing an 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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If you are buying a home in NYC, should you hire an agent or broker to represent you?
The quick answer is yes. – StreetEasy
It is important to approach buying your first NYC condo as if you were buying your first home. There’s no reason to stretch yourself financially, and it is 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 a 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 mindset when it comes to working 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.
In accordance with when a building is put up as a condo 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 by 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 some buildings, each apartment 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 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 some court cases which have revolved around the actions of condo boards. 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.
Important steps you’ll take in purchasing a New York City Condo.
STEP ONE – Mortgage Pre-Approval
Estimated time frame: 1 – 3 days
It is important to understand how much you can afford to spend. Condo apartments typically require at least 10% down. Down payments can vary from building to building, some allowing for 5%. Despite Condo’s accepting 10% most banks in today’s market require 20% down. If purchasing a condo in a new development, the downpayment could also vary.
STEP TWO – Finding an apartment
Approximate time frame: 1-6 months
Depending on what you are looking for, the length of your search will vary. The average buyer sees 15-20 apartments before deciding upon one.
STEP THREE – Negotiation
Approximate time frame: 3 days to 3 weeks
Everything is negotiable. At Elika, we use a 4-6 data point analysis to estimate the approx. Fair market value of a condo. Our detailed report brings meaning to the numbers helping you submit the right offer and start negotiations of on the right foot in pursuit of purchasing the condo for the best price possible.
STEP FOUR – Contract Signing
Approximate time frame: 1-3 weeks
The seller’s attorney draws up the contract of sale for the buyer’s attorney; the buyer’s attorney does ‘due diligence‘ – reviewing minutes, financial statements of buildings, etc. The buyers sign the contract and forward the contract with a 10% deposit; the sellers execute the contract. Possible contingencies: Financing, Board Approval, closing dates. The quicker the contract can be signed, the better. A contract is only binding after both parties sign.
STEP FIVE – Mortgage Application
Approximate Timeframe: 5 – 9 weeks
Commitment Letter from Lender. Mortgage applications cannot be processed without an executed contract. If an apartment is being financed, the board requires a commitment letter from a lender. These letters are in most cases the last items to complete a condo application.
STEP SIX – Condominium Application or Board Package
Approximate time frame: 3 – 9 weeks
Condo resales require an application to be completed before a closing can take place. For the board to review a potential purchaser, Condo applications are given to prospective purchasers to fill out after a contract has been executed. If there is no financing, it generally takes about 2-3 weeks to gather the information for the condo board application. When working with an Elika buyer’s agent, we assist in this process making it as hassle-free as possible.
Most Boards request the following detailed information: full financial disclosure with supporting documentation, employment history, current salary, personal and business references, tax returns for the previous two years, credit history, etc.
STEP SEVEN – Submit Condo Application for review
Approximate time frame: 1-4 weeks
After Elika completes your Board package, we will forward the finalized application to the managing agent of the condo building. The managing agent will inspect the package to ensure it is complete. The package will then be forwarded to the Board of Directors of the Condominium. After the board reviews the application, they will approve and issue a waiver to close.
STEP EIGHT – Schedule a Closing
Typical time frame: 1-2 weeks after board approval
Once the waiver to close has been received if financing the bank will move to finalize the loan, and your attorney will coordinate a closing day and time.
Condominiums are a flexible and affordable option for some home buyers, but there are distinct differences between condos and single-family homes. Here are some things to consider if you are thinking of buying a condo.
Storage space varies wildly in condominium units. Some buildings have storage cages in the basement, but many don’t. If you need a lot of storage space, a condo may not be the best choice.
Private space outdoors is rare in a condominium development. This is great if you dislike maintaining a lawn, but if you love to garden or lounge outdoors, you may regret your condo purchase. If outdoor space is essential to you, consider purchasing near a park or a condo in a building with a roof deck, possibly.
Most condominium developments have luxurious amenities like on-site gyms, communal outdoor spaces (in some cases swimming pools), community lounges, and playgrounds, which are very attractive to a certain type of homebuyer. Keep in mind, though, that the more amenities you have, the higher your monthly fees will be, so choose your amenities wisely.
Almost all condo developments have an onsite maintenance crew that handles any repairs to your home and maintains the common areas. They often also arrange for deliveries to your home and even let approved workmen into your homes, such as cable or phone technicians.
Condos usually offer enhanced security, such as a doorman, multiple secure entry locks, and in some cases, round-the-clock security personnel—which is very helpful in the event of an emergency.
You’ll pay maintenance fees and dues to cover the costs associated with the amenities and security, even if you don’t use them all. The fees are set by the condo board, and they often increase on a periodic basis. These fees will be on top of your monthly mortgage payment.
The resale price on your unit often hinges on what other units are available in your development, and at what previous like-kind apartments have sold for. Condo units are very similar to one another, so the number of available units, views, finishes, and appliances often determine your asking price.
Condo living is governed by the condo association and any rules and regulations they adopt, although in most cases you will have a vote. Some condo boards restrict pets or noise levels. Make sure you read all your condo rules and regulations before purchasing a unit.
Condo residents live in proximity to one another; it’s a good idea to meet your neighbors before you buy.
Before you make an offer on a condo apartment, you’ll want to get some key information from the management company/board. Here are some crucial questions to ask, no matter where you’re trying to buy:
1. Unit Ownership Percentage: Primary User VS Investors – What percentage of the units are owner-occupied, and what percentage is rented out to tenants? Generally, buildings with a higher percentage of owner-occupants are more marketable when it’s time to resell the property.
2. ByLaws – Ask for a copy of the bylaws; if possible, review them with your buyers broker and attorney. Be aware of any grandfather clauses that govern the property. You may find that residents who bought the property after a certain date can’t rent out their unit, while those who bought earlier can, for example.
3. Building Financials – Ask for a copy of the building’s financials. How much money does the association or board keep in reserve, and how is it invested?
4. Current or Future Assessments – Are assessments keeping pace with inflation? Is the board raising assessments each year to build reserves to fund future repairs? Compare assessments to other condo developments and co-ops in the area to determine if they are reasonable.
5. Reason for Assessment – What is covered by the assessment? Maintenance of the common areas, recreational facilities, Local Law 11 building repointing, trash collection, and snow removal are common activities paid by condo associations and co-op boards. Be sure to find out what is not covered, as well.
6. Historical Frequency of Assessments – Were there special assessments mandated in the past five years? How much was each owner’s share? Some assessments are unavoidable, but frequent, costly assessments may be a red flag indicating a building in poor condition, or imprudent financial policies with the board itself.
7. Sales Turnover in Building – How many apartments have sold in the building in the past 12 months, and how often do they sell?
8. Law Suits – Is the board involved in any litigation? Lawsuits involving homeowners or developers can rapidly deplete association reserves.
9. Quality of Buildings Construction – Has the building’s developer worked on other projects? If your development was converted to condos or co-ops from another use, ask for an engineer’s report. If the roof, windows, and bricks are in poor repair, they will affect the value of your housing investment and possibly quality of life.
This information will help you decide if the condo or co-op unit is right for you; it will also give you some insight about the condo board’s cooperation, organization, and helpfulness.