A Guide to Buying in New York
Things to Determine Before you Look
Be Prepared Before You Search
Weinman International Real Estate, Inc. strongly urges its customers to take some preliminary steps in preparing for their purchase BEFORE commencing the search.
Two key items to prepare for are:
- Contact, interview and choose a lending institution (if financing your purchase) and obtain a Pre-Approval Letter. Most sellers and/or their agent will not even entertain an offer unless it is accompanied by a Pre-Approval letter from a lending institution.
- Contact, interview and retain an attorney who will represent you in legal matters during your purchase. Having an attorney will ensure that your legal rights are protected, especially during the contract phase of the purchase, as well as prepare for the elements related to closing.
If you do not know where to start for either, Weinman International Real Estate can provide you with a list of resources. Again, having these two items in place will assist in preventing unnecessary frustration, or delay during the purchase process.
- Apartment Size
- Your Budget
- Style of Property
How much space do you need? In Manhattan, apartments are usually listed by the number of rooms or Bedrooms. There are many different terms to describe styles and layouts, so you need to familiarize yourself with apartment and building terminology.
What is the most you can or should spend on your apartment? Prices change frequently based on supply and demand.
Most of this will also be determined by size, location, and building amenities (including doormen, condition, whether or not pets are allowed, etc.). Be honest about your budget and focus on getting the most apartment for your dollar by understating your monthly limit and the market you are looking in. It is essential to speak with a lending professional before you commence the search if you plan on financing your purchase in order to assist with determining your purchasing power.
New York City consists of many different neighborhoods, all with unique flavors and personalities.
Think carefully about commuting time, access to mass transit, and proximity to services that are important to you and your family, such as shops, schools, and parks. Do you like to go to the theater, to galleries, to discount shops? Is exercise important? Do you need a neighborhood grocery or drugstore that’s open late? Is the area you are focusing on going to provide you with the home you want? A parking place in Manhattan can cost as much as rent in other cities!
With apartment hunting, it’s good to have a few areas in mind during your search. Weinman International Real Estate, Inc. is available to make some suggestions based on our experience and market expertise, so keep your options open. The more flexible you can be, the better your chances of finding an apartment you like.
New York offers a myriad of property styles, ranging from quaint smaller apartment buildings and Brownstones, to ultra-modern skyscrapers. Weinman International can guide you through the process and educate you to such variations in style, architecture and finishes, ultimately finding you the perfect home.
Apartments are usually listed based on an average market time and closing process of about 2-6 months. Consider carefully, and consult with your real estate specialist as to what time-frame works best….What are your timing needs?
Are you selling your home first? Do you need to be closed or moved in prior to the start of the school semester?
Types of Ownership
- CONDOMINIUMS (CONDOS)
- Cooperatives (Co-Ops)
In condominium buildings, the apartments are owned by individuals, not a single landlord or corporation. Apartments are occupied by residents who either live there full-time, part-time, or apartments that have been purchased by individuals as investment properties that are then rented out for as long as the owner wishes. The owner has the right to decide the amount of rent and security, as well as the length of the lease. Owning a condominium in Manhattan is the same as owning one anywhere else. It is a fee simple ownership and the buyer receives a deed in a formal title transfer. Monthly payments to the condominium are called “common charges”, and they are used strictly for maintenance and upkeep of the jointly owned areas. Of course, the amount of interest on the owner’s personal mortgage is fully tax-deductible. Real estate taxes are paid directly to the city. Fee simple ownership gives owners the right to rent their own apartment, a place for some people. Mortgage amounts can be as high as 90% of the sales price if the buyer qualifies. Often there is not a formal application process, so the time from contract signing to closing is usually shorter.
In cooperative buildings, individuals own shares in a corporation, the number of shares are based on the size and worth of their apartment. Since the building is technically owned by the corporation, the rules are governed by a “proprietary lease”.
The corporation pays all real estate taxes, maintenance expenses, and the underlying mortgage on the building. The co-op owner’s portion of the payment depends on the number of shares owned in the corporation, issues via a “Certificate of Stock”. There are likely to be many restrictions governing the usage of the apartments by the individual residents in a Co-Op. It is unusual to find a cooperative that will freely allow rentals, (called “sublets,”) and if it does, then it requires a prospective tenant to apply to the co-op board, agreeing to provide detailed financial information and a personal interview, before the sublet is approved. Obviously, the approval process will take longer than the normal condo or apartment. “Move-in/move out” fees still stand. It is extremely difficult for a new-hire or an expatriate to rent a co-op without some credit history, and/or excellent personal and business references.
Basically, cooperative ownership offers the same advantage with a few extras:
- The Shareholders elect a Board of Directors, whose responsibility is to meet, interview and “approve” or “disapprove” a prospective owner, thereby protecting the present Shareholder’s interest by approving only qualified candidates.
- Cooperative ownership offers a more consistent occupant environment. Residents typically tend to stay for longer periods of time, and few co-ops allow extensive subletting for longer than 2 years, lending itself to a higher owner-occupancy and adhering to rules less favorable for an investor.
- A large portion of the monthly maintenance fee paid by each shareholder is tax deductible, i.e., the
pro-rata share of the corporation’s real estate taxes, as well as the building’s underlying mortgage payment.
There are some disadvantages in purchasing and owning a co-op:
- The board often requires a large cash down payment. Usually prospective purchasers are required to put 25% of the purchase price down at a minimum….Some Co-ops may require more…Some of the most exclusive Co-ops permit no financing at all.
- As stated previously, Most co-ops prefer owners to be occupants; therefore subletting an apartment may seem difficult. Each co-op board has its own set of rules, but generally speaking, subletting will have to be approved by the board, and permission is usually granted for no more than 2 years. Some co-ops, however, are more flexible and are known as “easy boards”.
- Owners are normally not allowed to use their apartments for professional or business purposes.
- Almost all renovations to individual apartments will have to be approved by the board.
- Owners who wish to sell their apartments will have to have the new buyer approved by the board through the application process.
- Often co-cops impose a tax on selling called a “flip tax” to compensate the co-op for the
inconvenience of someone new moving in. The monies go to the co-cop treasury and often help keep monthly maintenance down.
Despite the disadvantages, cooperative ownership remains a very popular option for residential ownership in Manhattan. You can rely upon Weinman International to guide you through the purchase process.