Home Buyer Questions

According to the REBNY residential sales report, the average apartment in NYC in Q2 2020 was $975,806. The number includes all types of homes and considers all sales across the five boroughs. When broken down, the citywide averages were:

Condominiums – $1.6 million
Cooperatives – $724,983
One-to-three-family homes – $860,631

The COVID-19 pandemic has undoubtedly impacted average city sales prices and sales volumes. As the pandemic lessens, we can expect these numbers to change.

The word luxury often gets overused in the NYC market, and it will mean different things to different people. Simplified, any luxury home worthy of the name falls into the top 10% of the market transactions. Those homes in the top say 1-2% range are considered ultra-luxury.

The old real estate adage “location, location, location” has never lost its glow or sense of truth. When looking for a home, location and what you’ll pay are the most crucial attributes.

Whether a condo or a co-op is right for you is a personal decision. But it essentially comes down to whether you want a new home and plan to rent it out. If you’re going to rent out, you should stick to looking at condos. They tend to be a lot more affordable than condos. Cop-ops rarely allow sub-leasing; when they do, there are so many limitations that it’s just not practical. But if you’re only looking for a primary home and aren’t concerned about it being new, a co-op is the best option.

Generally, yes, but it depends on the seller. If they deal with multiple offers, an all-cash offer will usually be at the top. It means one less step in the process (the mortgage approval) and a reduced chance of something going wrong. However, as much as 50% of the Manhattan market comprises all-cash buyers at any time. This means the benefits may not translate into lower prices.

• A laid-out floor plan
• Nice views
• Good lighting – south and west-facing light is the preferred choice in Manhattan.
• Corner apartments – almost always offer expanded views.
• If you can, avoid fixer-uppers unless you are ready for the renovation process and the associated costs.

All homes become “in-contract” once the buyer and seller have signed the purchase and sales agreement and the buyer has paid their deposit (usually 10% of the purchase price). This legally binding term locks both parties into completing the transaction. If a contingency gets activated, the only way is to allow the buyer to exit the deal and get their deposit back.

State law stipulates that only an attorney can close a real estate deal in New York. Their respective attorneys must represent both sides. Buyers should be careful when choosing an attorney specializing in real estate. 

Absolutely! There are no extra stamp duties or taxes levied on foreign buyers. The only minor cost is that the buyer must set up a limited liability company (LLC) to hold the property. However, some U.S. citizens also do this, so there’s no extra cost. As a global destination, New York City attracts buyers worldwide, lured by its stable price appreciation and investment potential.

The buyer pays the mansion tax on properties equal to or greater than $1 million. It ranges from 1% to $2 million to 3.9% for up to $25 million. Its name is a joke among real estate circles in NYC because even a studio apartment can cost more than $1 million.

All condos and co-ops in NYC have a board of directors. The board sets the rules for the building, including how they select new buyers. It’s an electable position and can only be held by building residents. Every buyer must provide a board package for their review, including financial information, personal information, and anything else they need. This is usually a formality; they can’t stop you from buying the property unless they agree to buy it themselves.

For co-ops, it’s a lot more different. Co-op board packages require a lot more information and will include an interview. Unlike condos, co-op boards have the power to reject a buyer for whatever reason they choose. You won’t even be told why you were denied. This is one reason why many buyers prefer to go for condos if you’re buying a co-op, and having a buyer’s agent who’s handled transactions in the building before can make things a lot easier and more predictable.

Most condo and co-op boards require buyers to complete the REBNY financial statement. Essentially, it’s a personal and financial statement that includes details about the buyer’s assets, liabilities, income, and expenses. Supporting documents such as bank statements and investment holding statements will also be required.

A prequalification is a preliminary determination by a bank or lender to determine whether a buyer can obtain a mortgage. It’s not thorough and doesn’t look into whether any buyer’s statements are factual. The buyer is asked to state their level of credit, assets, liabilities, income, and expenses. Based on this, the bank will estimate the loan amount they can expect to borrow.

By contrast, a pre-approval is a far more thorough assessment. An underwriter will review the buyer’s financial and personal documents to determine if they meet their financial requirements. Compared to a prequalification letter, a pre-approval letter is a far better indication to a seller of your ability to purchase a property.

The market today is full of products related to mortgage insurance. Some of these help you save money to purchase a home; others make your mortgage payments in the event of ill health, death, or loss of work due to disability.

Often, a lender offers mortgage life insurance. This type of mortgage insurance ensures that you will entirely pay off your mortgage financing in the event of your death or your spouse’s loss if you are both named on the original mortgage.

The best deals on this type of insurance are directly from the insurance companies. Lenders commonly offer packages that cost you more and don’t provide many benefits. So, while your bank may try to get you to purchase mortgage life insurance, it is usually more cost-effective to buy it from someone else.

Non-conforming means a mortgage that doesn’t follow the standard underwriting practices of other mortgages. Don’t be concerned if someone mentions this to you because an individual has either bad credit or no credit history. This means you may have to pay higher interest, but you can still get a mortgage.

However, if you are offered a non-conforming jumbo mortgage loan, it is essential to get several quotes first, whether from an online source or several mortgage brokers. Be sure to consider all your available options. Lenders compete for your business, allowing you to get the best possible deal.

Fair Housing Laws prevent real estate agents from divulging information about which schools lie in zones. However, we can show you how you can find such information. Two great websites to check out are InsideSchools and GreatSchools.

Before signing a purchase contract, contact the school you’re interested in to confirm that it is within your school zone. Not all online information is current, so be aware of this.

In the real estate world, prices are constantly changing. Determining how much a property is worth is almost an art as it is a science. A comparative market analysis (CMA) is a set of variables agents use to determine the current market value.

It may surprise some to know that buyer’s agents have always been a feature of the real estate world. The problem was that most buyers weren’t aware of this and wouldn’t learn about it from the seller’s agents. Completely unaware that the agent they were dealing with was duty-bound to represent the seller led to distrust between agents and buyers.

It wasn’t until the FTC began pressuring the real estate world to provide clients with written disclosures stating who represented whom that things started to improve. By the 1990s, this pressure had spread to most states, and in 1993, the National Association of Realtors (NAR) finally admitted the need for representation disclosures. All real estate agents are now compelled to be honest about who they represent in any transaction.

When most people hear the words “real estate agent,” they may conjure an image of a conniving dealer who claims to work for you but represents the seller. Their aim, of course, is to make you pay the highest price possible. Thankfully, with the advent of dedicated buyer’s agents, that’s no longer the case. These agents work solely for the buyers to get the best price on the best terms. By hiring one, you’ll be confident that you’ve got someone on your side. Elika Associates is always here to provide that service for you.

Not in the least. Any agent can help you find a home that matches your budget and needs. But only a dedicated buyer’s agent will work directly for you and take your best interests to heart. By contrast, non-exclusive agents are bound by local and federal codes and real estate license laws to meet the seller’s needs first and foremost. Not many buyers know this, so many feel cheated once a deal closes.

These are the two most important qualifications in choosing a buyer’s agent. Finding an agent with these will give you complete peace of mind that your interests are being looked after.

Every real estate buyer’s agent solely aims to represent the buyer with 100% loyalty, full disclosure, and fiduciary duty. This is crucial when dealing with any listing agent representation. The listing agent, also called the seller’s agent, will owe all their loyalty to the seller. This is terrible news for unrepresented buyers, who will be severely disadvantaged when negotiating a sale. By hiring a buyer’s agent, you’re adding a counterweight to ensure your best interests are protected.

As a member of the National Association of Exclusive Buyer’s Agents (the only one in NYC), Elika Real Estate works exclusively with buyers and is better informed about the buying process.

Any home purchase in the U.S. is a significant milestone. However, the prices found in NYC make any purchase there a far more important. Besides, getting from offer to closing in NYC is rarely a straight road. Numerous bumps, unexpected turns, and roadblocks along the way can tire out even the most committed buyer. By hiring a buyer’s agent, you’re getting someone who can fight for you in negotiations, but you’re also getting someone who can guide and confidante in the journey towards homeownership.

New York City has always been a tough market for buyers. But it’s even more so now since the COVID-19 pandemic started. You can expect no mercy if you go in there alone and unrepresented. You could, but you’re only setting yourself up for disaster.

Furthermore, whether you hire a buyer’s agent, you still pay for one in the real estate commission form. This is roughly 5-6% of the sales price and is always paid by the buyer. Ordinarily, this is split 50/50 between the buyer’s and seller’s agents. If the buyer doesn’t have an agent, the seller’s agent collects the full commission. So, it makes little sense to go without representation, as you’ll still be paying for it either way.

Along with negotiating for your best interests, Elika has extensive resources and expertise to help you make the right decision. You’ll never have to worry about getting shanghaied into buying a property that doesn’t fit your needs with our agents. Our agents can also handle the paperwork, find unlisted properties for sale, navigate the buying process, and help you secure financing. Buyer’s agents do a lot more than find you a home. They allow you to find the perfect one on your terms that suit you right.

Absolutely. The biggest problem with dual agents is that they rarely introduce themselves as such. You have to find out who they represent, usually by reading the fine print on the buyer agency agreement or checking the paper for listings placed by the agency. If an agency has many listings, you can take that to represent both buyers and sellers. In this situation, it’s better to walk away and find another agency, as they’ve already shown that they’re dishonest.

Any transaction in which the buyer’s agent and seller’s agent work for the same brokerage (an in-house sale) is almost always a bad deal for the buyer. Savvy buyers know this and work with an exclusive buyer’s agent. Reputable sources such as Business Week, Money Magazine, Kiplinger’s Personal Finance Magazine, and U.S. News and World Report also support using a buyer’s agent over a dual agent.

Unlike traditional real estate brokerages, National Association of Exclusive Buyer’s Agents members exclusively represent buyers. NAEBA brokers owe their clients complete loyalty, obeisance, confidentiality, accounting, reasonable care and skill, full disclosure, and fiduciary duty. By contrast, traditional brokers owe their fiduciary duty entirely to the seller and cannot reveal anything detrimental to their interests.

This transforms the typical buyer-agent relationship, providing the buyer with a far more level playing field. For instance, exclusive buyer’s agents can advise you on how much the property is worth, not just by sharing comparable sales data but also by providing information that could influence the price to your advantage.

For example, the buyer’s agent must inform you if the sellers are going through a divorce or a pending foreclosure. Using all the information, your buyer’s agent will fight to get you the best price under the best contingencies.

At Elika, we aim to take the stress out of the buying process and provide our clients with a service they’ll never find with a more traditional agency. As exclusive buyer’s agents, we put your interests first. We’ll make offer recommendations, handle tough negotiations, and prevent high-pressure sales agents from leading you into a bad deal. By drawing on decades of experience in the NYC market, you can be sure of getting a complete understanding of each property and the market as a whole when you work with us.

Since a sale commission still has to be paid to the listing agent, it makes little sense to forgo a buyer’s agent’s services. Also, best of all, it costs you nothing extra to do so. We can get you a better deal than you would by going alone, but we’ll do it at no additional cost.

Based on the Real Estate Board of New York, NYC’s sales commission is about 5-6%. Like all other real estate agents, Elika agents earn their living through this commission, paid at closing out of the sale proceeds. This is then split 50/50 between the listing brokerage and the buyer’s brokerage. It’s an unavoidable part of any transaction and will still have to be paid even if you go without agent representation.

Perhaps, but that’s not how we do business. We understand that a satisfied customer leads to referrals, which leads to more business. This makes up for any financial losses we take from steering you towards that less expensive home you want. Our goal is always to build long-lasting relationships based on trust and transparency.

The seller pays the real estate commission out of the sale’s proceeds. The commission is split 50/50 between the buyer’s agent and the listing agent (it goes to the brokerages, not the individual agents). Most sellers will bake this into the listing price, so, in effect, the buyer is paying it.

Now, you might think you can avoid this if you go without agent representation. But that still leaves the seller’s listing agent. The listing agent (or their brokerage) collects the 5-6% commission in a transaction where the buyer is unrepresented. So, it makes little sense to go without representation since you’ll be paying for it anyway. The listing agent is the only party that benefits from no buyer’s agent.

Elika aims to provide its clients with the best service as an exclusive buyer’s agency. We help you cut through the marketing copy, home staging, and other sales techniques that can mislead you about the actual value. We’ll then walk you through every step in the buying process, from the initial offer to closing day.

We can do what we do so well because we take the time to understand what our clients are looking for. Expect us to ask many questions as we try to understand your lifestyle preferences, financials, and long-term goals. Using this information, our agents will comb all the listings to search for your dream home.

Additionally, our exclusive agents will also:

• Provide unbiased expert knowledge and services, saving you time & money.
• Connect you with reputable attorneys, mortgage lenders, architects, etc.
• Sort through all the properties and provide you with only the best options.
• Preview properties so you don’t have to.
• Negotiate on your behalf to get the best possible price and manage the purchase application process.
• Research and conduct a Comparable Market Analysis on the property, market, and area to ensure you do not overpay.
• Provide you with post-closing services assisting with your move and more.
• Help you spot misleading information in a property listing.
• Identify overpriced properties and discourage impulse buying.
• Professionally negotiate on your behalf to cut property prices.
• Speed up the closing process, board applications, and other frequent delays

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