Thinking About Buying
Buying a home is one of the biggest decisions you’ll make in life. We’ll help to make the purchase of your home as easy as possible so you can Live Who You Are.How can I prepare myself for the buying process?
Purchasing a home is exciting but there's a lot to consider. Take time to define your search parameters like price range, location preference, type of ownership (co-op, condo, etc.), size of property and building amenities, if applicable. Prioritize your needs (i.e., space, light, views, schools, etc.) but try to be flexible. In evaluating your budget, know what you can spend on a down payment as well as monthly expenditures like maintenance or common charges, real estate taxes, monthly mortgage, utilities, parking, etc. Find the right real estate professional to help navigate you through the process, speak with a mortgage lender to obtain written pre-approval for a loan, and choose an attorney experienced in NYC real estate.What should I look for in an agent?
Buying a home is not only an important financial decision but a major life decision as well. Nothing says more about who you are or how you live than where you live so you need to make sure that your real estate professional is someone who understands you and your needs. Begin by asking friends for referrals. Choose a professional who specializes in homes in your price range and desired neighborhood(s); someone who's available to work on your schedule, who listens to your needs, asks a lot of questions about how you live and takes time to explain things you may not understand. Finding a new home should be an exciting and enjoyable process but it is also time consuming so look for someone whose company you enjoy - you will likely be spending a lot of time together.What is the difference between a condo and co-op?
Co-ops are owned by a corporation. When you buy a co-op you're buying shares that entitle you as a shareholder to a "proprietary lease" in a particular apartment. Shareholders pay a monthly maintenance fee to cover building expenses including real estate taxes. Approval is granted by a board of directors, and all prospective buyers must submit a "board package". The board will also require an interview. A condominium is real property, and a purchaser is given a deed. Besides owning the apartment, you also own a small percentage of the building's common elements like the halls, stairwells, etc. Each individual apartment gets a separate tax bill from the city. There is also a monthly common charge for building expenses. Financing and subletting terms can be more flexible in a condo than a co-op.
What Can I Afford
Buying a home is one of the biggest decisions you’ll make in life. We’ll help to make the purchase of your home as easy as possible so you can Live Who You Are.How to determine your monthly payments
There are many online Mortgage Calculators to help you figure out what your monthly mortgage payment amount will be. This will give you a better understanding of what price range to look in for the apartment you want to buy based on your other debt obligations and your income. You’ll need to have some general information to put into the calculator like your interest rate, the amount of the loan, the amount of your down payment, and the length of time you are planning to borrow the money for. The monthly payment shown does not include your property taxes and homeowners insurance. Your mortgage lender may require you to have an escrow account, a separate account from your mortgage loan where you pay extra money every month for these expenses.Are there different costs when buying a new development?
Transaction costs may be higher when you buy in a new development. Terms vary by project, but sponsor sales often add around 2% to the transaction's closing costs. The biggest chunk will be city and state property transfer taxes (usually 1.825% of the purchase price), traditionally a seller's expense that will often be shifted in the purchase agreement to the buyer in new developments. These expenses cannot be rolled into a mortgage, so buyers will require more out of pocket at closing. Also, the lender will see the closing costs as a reduction in a buyer's liquid assets after closing, which may affect how big a mortgage the buyer qualifies for. Buyers will likely have to pay these fees again when they sell. Still, many are comfortable purchasing new construction based on timing and the value of living in a brand new home.Should I get pre-approved for a mortgage?
Yes! Getting your financing in place before you look for a home will save time and help ensure a smoother transaction. Meet with a mortgage broker to ask questions about the loan process and arrive at a comfortable price range. There are two levels of endorsement during this process – pre-qualification and pre-approval. Pre-qualification means you are potentially qualified for a stated loan amount, assuming full and accurate disclosure, while pre-approval is more appealing to a seller. To get pre-approved, you must provide your mortgage broker with information for a detailed background and financial check (including tax returns, credit check & income history). You'll then get a letter from the lender stating the amount of your loan. This commitment is usually valid for about 60 days.
Finding The Right Home
Buying a home is one of the biggest decisions you’ll make in life. We’ll help to make the purchase of your home as easy as possible so you can Live Who You Are.What to look for at open houses
Open houses are held to showcase an apartment for sale to the public, and are visited by both serious buyers looking to zero in on a home and browsers who just want something to do on a Sunday afternoon. Some are very crowded while others are more intimate. The real estate agent hosting the open house should have prepared information on the property and be available to answer any questions. For serious buyers, this is a great opportunity to view the home without pressure. Try to look beyond the owner’s décor if it’s not your taste but the home still has great potential for your needs. If you want information on history, comparables, upgrades or other specifics, don’t be afraid to ask. And if you’re interested in a private showing, make an appointment to come back.Helpful hints for completing a board package
In order to evaluate a potential purchaser in their building, the Board of Directors reviews extensive information from the prospective buyer in what is called a Board Package. Most co-op boards typically request financial disclosure with supporting documentation, employment history, current salary, personal and business references, tax returns and credit history. To help you in preparing your board package, first review the application and its requirements with your agent, who will assist you in the collecting and assembling the necessary paperwork. Complete the application in its entirety, answering all questions as clearly and concisely as possible, and submit only the materials that have been requested. Also be sure to have your reference letters written on either business or personal letterhead.Helpful hints for completing a board interview
A building Board will want to arrange an interview with you to have the opportunity to meet you and discuss your application in further detail. Board interviews range from an informal meeting to a more formal interview, so be prepared by doing the following. Make sure you arrive at your appointment on time and dressed appropriately. Review your application prior to the interview to familiarize yourself with all the information. Assume that you’ll be asked a wide range of questions from personal to financial, so be make sure to cover your bases with all possible answers. Couples should decide in advance who will answer which types of questions. Be clear and concise in your responses. Don’t try to sell yourself, and avoid providing information that’s not directly asked of you. If you can help it, don’t ask questions either.
Buying Process Timeline
Once you’ve started your search and are working with your agent to preview different properties, it’s important to be aware of the timeline of events that generally take place when you’ve found that perfect home. In most cases, once you decide to make an offer, it can take an average of 60 - 120 days to complete the closing process.
Prepare the Offer: 1 day
Negotiate the Offer & Acceptance: 2-5 days
Loan Application & Appraisal, Loan Approval and Commitment Letter, Sign Contract/Escrow Deposit: 2-4 weeks
Co-op Board Package & Interview/Condo Application: 4-6 weeks
Bank & Attorney Prep Closing: 1-2 weeks
Final Walk Through: Day of Closing
Transaction Closing: 3 hours
To complete your board package (not applicable for townhouse or condo purchases), your agent will provide an application which varies from building to building. This typically must be completed and returned to your broker (who will deliver it to the appropriate party) within 10 days of receipt of the fully-executed contract or three days for the date you receive a bank commitment letter, whichever applies. Generally, a co-op board package requires at the minimum several Personal and Business Reference Letters from friends and colleagues (your agent can provide samples), employment verification letters and/or pay stubs, bank verification and brokerage statements, net worth statement (this mirrors the information requested by your bank), two years of tax returns and the mortgage loan application and commitment.How are closing costs determined?
For many homebuyers, closing costs are a mystery. If you are purchasing you need to be aware of these costs well in advance of the closing date. Typical closing costs associated with the purchase of a cooperative, condominium or townhouse include but are not limited to: attorney fees (which vary); fees associated with your mortgage loan such as origination costs (0 – 3% value of loan), application, credit check, etc. ($500 and up), appraisal ($600 and up); move-in deposit ($500 and up, usually refundable if no damage); various taxes including mansion tax (1% of total purchase price when $1 million or more), insurances and other items, plus your remaining down payment. Condos and townhouses also require title insurance, title search and recording fees (approximately .5-.8% of purchase price). Buyers should consult their real estate attorney or financial advisor for specifics. Those buying in new development projects should pay particular attention to these numbers as you will likely be paying NY City and NY State transfer taxes (usually 1.825% of the purchase price) as well as other seller fees and expenses like the cost of the seller’s attorney.
- Locate your Abstract of Title or Title Insurance Policy.
- Inspect your property before you sell - hire an inspector and if necessary obtain contractor estimates to repair any major problems.
- Find a qualified local area real estate professional and attorney to represent your interests when selling your home.
- Decide on what types of renovations and staging you would like to complete on your home. Remove and repair all signs of damage and other deterioration, e.g. holes and cracks in ceilings and walls. Restore hardware and bathroom/lighting fixtures as needed.
- Keep track of all money you spend in improvements to your home as you may be able to add it to the cost basis of your home and reduce income tax on your gain from the sale.
- Have your real estate agent do a Comparative Market Analysis to help you price your home. Knowing how much your home can be worth is one of the first steps in beginning to market the property properly.
- Determine your timeline for moving. Depending on how quickly you need to move you may decide to price the home more aggressively.
- Have your real estate professional spell out his or her marketing plan, arrange for property to be photographed and decide if an open house should be scheduled.
- Prepare your property to show. Remember, the main rule of staging is to “neutralize” the environment. Remove personal photos, waste cans, cosmetics and personal effects. The potential buyer should walk in and feel it’s a model home, devoid of clutter.
- For showings, you may want to leave while your home is being shown so that buyers will feel more comfortable to move around and discuss your property with the real estate professional.