Tips for Buyers of Luxury Lofts & Apartments:
When looking at properties online:
You should look over the photos and description to ensure there is cohesion in the two. If there isn’t cohesion, you have a clear idea that this space could be something that you might want to avoid. Good units have a cohesion of the two (pictures and text) as they are not trying to hide anything or make anything sound better than its current state. Also be wary of pictures with the shades down (view issues), missing pictures (needs work), photos of corners of rooms (small/cramped) or just photos of the surrounding area/outside of the home or building with nothing interior (needs major work). Most people post photos to entice people in looking at their unit and if they can’t deliver, they will try to manipulate the photos in a way to make it look better or de-emphasize their problem area. For example the living room window(s) looks at a wall so they use photos of the living room with all the shades down so that you can’t see the wall. They figure that if they can get you there at the home/apartment that maybe they can make you over-look that element.
When viewing units in person:
When you arrive at the home or apartment, there are so much visual stimuli, it can be overwhelming and frequently you can miss things important to you. Before you arrive, and even before you begin looking, you should have your prioritized list of what is important in your next home and what you may be willing to sacrifice. You should bring a notepad and take notes about each place you see as they tend to blend into one another after you have seen 3 or more places in a day. Also you should develop a system of how you will look at places for better results and consistency. ie. 1st you look at kitchens, then bathrooms and so on. A uniform approach will ensure the most though comparisons and accuracy.
You want to look at the overall quality of the building or home and especially the condition of the basement. People rarely go down there so that is a great indication at how the rest of the building or home will be taken care of and cleaned. Also any extra amenities should also be quickly examined to see how they are maintained. Once inside the apartment or home you should follow your progression plan (as noted above) and take notes about all the areas, type of fixtures and what you would want to change about the space. A lot of real estate is sold based on the feel of the space so pay close attention to this feeling element within yourself and list in your notes. Some items to look at (but not limited to): flooring, bathroom condition and fixtures, windows (type, condition and thickness), kitchen appliances (make, condition and age), cabinets, closet space, size of rooms, garage space, type of heating and cooling system, noise, ventilation, refuse removal and anything else that you can identify that impacts your living environment.
For apartments this is an interesting area. Co-ops don’t record the square footage in the offering plan (the plan for the conversion on file with and approved by the Attorney General) and are generally passed from one owner to the next. This can generally be somewhat unreliable and contradict itself from one unit in the same apartment line to another unit in an apartment line. For example 4A was sold in 2007 and listed at 800sf and the same apartment on a lower floor 3A (same floor plans and measurements as 4A) was listed at 700sf in 2001 when it was sold. Price per square foot should not be your sole comparison, utilize the comps for the best price analysis. Condos list their square footage in the offering plan but it also gets muddied. In the 80’s and other times condo square footage was listed as “Net” square footage (meaning usable space) while in today’s buildings it is listed in terms of “Gross” square footage. What this can do, is be misleading in terms of making something that is smaller (listing gross SF) look like a better deal based on the price per square foot comparison. Once again you need to go by like kind comps for the best analysis. The offering plan tells of how the unit’s dimensions are listed. Generally in gross square footage they are measured from the outside wall and sometimes include common elements within the apartment.
Making an Offer
When making an offer you want to utilize a REBNY offer form as this will convey your offer in the best light. You want to use comps and take into account renovations or lack there of, year to year appreciation, current inventory levels/demand and how the home meets your needs. Generally speaking, unless someone is desperate, offers of 10% or more off asking will be viewed as low ball offers (they might not be countered) and offers of approx 5% will be met with better responses. Of course you should base your offer on the comparable sales, appreciation levels, and upgrades/condition of the home. Sometimes if the home is over-priced you are best served not making an offer right away and waiting for their price to come down.
The beginning of any apartment/home on the market, the price will generally be firmer unless the seller has an over-riding need to move ASAP.
Selecting a Lawyer
Real Estate attorneys differ in how they charge. Either a flat fee for the entire deal or by the hour. You need to decide which type of arrangement will work best for your budget. Your attorney should be working in the place you are buying as they will have inside knowledge of how the process of that area works.
Someone communicative and proactive is necessary. Time is a killer of deals…the longer it takes to seal a deal (sign a contract) generally the chance of losing the deal rises.
Mortgage Broker or Bank
Generally a mortgage broker will take an application and credit fee and then shop your application around to multiple banks, while going direct to the bank you’ll have apply at each one individually.
Someone communicative and proactive is necessary.
Also note that rates will vary over time until you lock in a rate for 30 or 60 days.
**please get pre-approved before the process begins as this will help you gauge how much you can spend on your purchase.
Aztec Agreement – Co-ops
This is an agreement that basically states that if you default on your obligations that the bank is first in line to be re-paid.
Right of 1st Refusal – Condo
This allows the condo to purchase the unit for sale at the contract price agreed to by the buyer and seller. This rarely happens. In order to close a condo you’ll need to get from the condo management company the right of first refusal, common charge letter and insurance.
Contingent vs. Non Contingent
A contingent contract is one that if the buyer can’t obtain a mortgage commitment within 30 or 45 days then the contract is void and the buyer will get his earnest money deposit (Check you give upon signing the contract – generally 10%).
Non Contingent is not based upon the buyer getting a mortgage. If the buyer fails to get the mortgage, they will lose the earnest money deposit (generally 10%) that you put down with the contract signing.
When do you have a Deal?
Only when both parties sign the contract do you have a deal in New York. Until the contract is signed by both parties anything can happen.
Signing a Contract
When you sign a contract you will need to provide a 10% (generally) earnest money deposit with the contract to be held by the seller’s lawyer in their escrow account. Personal check is ok.
Acceptance of an Offer
When your offer is accepted, the space is still wide open especially in NYC, until the contract is fully signed by both the buyer and then the seller. An offer is non binding until you sign a contract and the seller counter signs the contract.
Board packages Co-ops and Condos
Putting together a board package you should utilize several items and follow the cover sheet which lists the directions. Although you should also read each page carefully as sometimes they have information on these pages not listed on the cover page.
In your package the buyer will need:
1. A table of contents – that they make up and that follows exactly the table of contents of the board package, has everyone’s contact information and is addressed to the board of directors.
2. For each item listed on the table of contents they should have inserts with the name of the section clearly denoted. If they have two people applying they should separate their documents within the each section by adding an extra insert with their corresponding names on each. The idea is to make the board package so simple a 5 year old can read it and understand everything. Also you want to answer all questions without having the board ask you, delaying the process.
3. Their financial statement should reflect the balances of their most recent statements to the penny and the statements must be complete with their name on them. If there is a situation where something can’t be provided such as internet only statements – you should stick in a note addressed to the board and typed denoting this is the case. Also if you are transferring stock or mutual funds for the rest of your down-payment or anything that is not specifically listed in the package or could cause confusion, you should put notes in front of the area explaining exactly the situation.
4. All letters should have all of the writers contact information and be addressed to the board of directors. The letter should specifically focus on the person who is being recommended and why they are being recommended. For business letters, they must be on letterhead and signed. Employment letters should contain information concerning your length of employment, present salary, bonus, prospect for future employment and contact information for the writer.
5. The application and any forms in the package should be typed or imported into adobe so you can type directly on the application.
6. Taxes should be signed and you should give complete taxes (state and federal) unless it specifically says federal taxes only.