The Insider’s Guide to Buying a Home in New York City
Let’s buy a home. For most of us, buying a home is one of life’s most monumental projects. In New York City, with distinctions such as co-ops and condos, uptown versus downtown, buying a home is even more of a challenge! But, like most things that really matter in life, the rewards of home ownership do outweigh the effort. As an agent with the Corcoran Group, I am experienced, capable and ready to help you navigate this process every step of the way. Not only will I help you manage proper expectations and clarify a complex process, but I will also offer you a competitive edge at the negotiation table and help secure the best terms on your behalf. I am ready to be your guide and partner every step of the way, helping you find your new home and live who you are in the greatest city in the world. I look forward to working with you!
Sid Gandotra Licensed Real Estate Salesperson m 201.281.9651 | o 212.444.7835 sid.gandotra@corcoran.com
THE INSIDER’S GUIDE TO BUYING A HOME IN NEW YORK CITY
Why You Should Work With a Buyers Agent
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We bring value to the process of purchasing a home in a complex market.
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The primary reason to work with a buyer’s agent is that we bring value to the process of purchasing a home in a complex and fast-moving market like NYC. The principle value we bring is protecting the interests of you, the purchaser, ensuring you achieve value for money and in the case of co-op purchases, to guide you through the complicated and personally intrusive process. Other fundamental benefits of using a buyer’s agent are: • •
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A buyer’s agent provides representation during negotiations and is able to find out things a buyer will not. A buyer’s agent has the total fiduciary responsibility to the buyer to act in their best interests at all times. If a buyer works on their own and negotiates directly with the sellers agent, they will be likely less effective due to the listing agents fiduciary responsibility to the seller. A buyer’s agent can provide up-to-the-minute market analysis and data. A buyer’s agent has access to every NYC listing. A buyer’s agent prepares complicated co-op and condo packages for their clients and guides them through what can often be a confusing process. A buyer’s agent works with the seller’s agent to hold transactions together, ensuring all the various parties. Such as attorneys, mortgage brokers/underwriters, management companies etc. to make the whole process for the buyer as simple and smooth as possible.
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THE INSIDER’S GUIDE TO BUYING A HOME IN NEW YORK CITY
What We Bring “ We will ensure to the Table that you are fully
protected when negotiating and signing a contract of sale.
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Broker Price Opinion
Mortgage Professionals
Deal Negotiation
Contract Negotiation
Application Submission
Legal Advice & Due Diligence
With years of industry experience and access to exclusive market data, we are able to present a comprehensive analysis of the properties and current market trends in your desired neighborhood. There are a lot of moving pieces in real estate deals. With our knowledge and expertise in putting together compelling offers, we ensure you to get the best deal possible. With a specialty in condos and co-ops sales in New York City, we’re delighted to guide you through the entire process. Applications for condos and co-ops in New York City are rigorous. Ensure your acceptance by letting us assemble the purchase application package from start to finish. Board applications are our specialty and we’ll make you shine.
We’ve built a network of highly efficient licensed experts that we’ll connect you with so you can be pre-qualified for a loan, access the best rates and close quickly on your dream home. Our team of highly knowledgeable New York real estate attorneys are experts in streamlining contracts, while positioning you to receive the most advantageous terms. They will ensure that you are fully protected when negotiating and signing a Contract of Sale. Our legal professionals will perform all the proper and necessary due diligence on your behalf, including reviewing the minutes from Board meetings and assessing the financials to make sure that your investment is sound.
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THE INSIDER’S GUIDE TO BUYING A HOME IN NEW YORK CITY
A Buyer’s Agent Helps You Achieve Your Home Buying Goals By: Saving Your Time
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Expert and experienced negotiation on your behalf
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Saving You Money • • •
Preparing a Comprehensive Market Analysis (CMA) in order to make an accurate and educated offer. Expert and experienced negotiation on your behalf. Offering an unbiased objective opinion on value based solely on your interest.
Providing Neighborhood and Industry Expertise • • •
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Identify your specific purchase needs. (Initial Screening/Interview) Educating and informing your every step of the purchase process from beginning to end. Selecting and scheduling appropriate listing appointments based on your search criteria.
Navigate co-op/condo board packages, rules and applications. Analyze specific local, regional and national trends that may affect your purchase decision. Identify local trustworthy vendors who are integral throughout the buying process. Resource for answers to any questions you may have during the purchase process.
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THE INSIDER’S GUIDE TO BUYING A HOME IN NEW YORK CITY
Buyer’s Checklist
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Prioritize your needs - space, light, views, building amenities, etc.
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Evaluate your budget. What can you afford for a down payment as well as monthly expenditures? Additional monthly expenses to consider would be your maintenance or common charges/real estate taxes, monthly mortgage payment, homeowners insurance, utilities, parking, etc. • • • • • • • • •
Select an Attorney who specializes in New York City Real Estate Prioritize your needs - space, light, views, building amenities, etc. Identify your timeline to make a purchase. Explore different neighborhoods to identify your desired location Research school districts in the selected neighborhood(s) if applicable Evaluate access to transportation in the selected neighborhood(s) Evaluate building amenities and house rules in terms of your preferences (washer/dryer permitted, gym in building, pet policy, storage facilities, sublease, doorman, etc. Begin to gather financial and supporting materials for your mortgage application and board package Once apartment has been selected, review the building financials with your attorney and agent to assess the financial health of the building
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THE INSIDER’S GUIDE TO BUYING A HOME IN NEW YORK CITY
Co-op or Condo? Co-ops
Condos
Typically, less expensive than condos, but purchase requires obtaining board approval, which can be an arduous process.
A condominium will be somewhat more expensive than a co-op of the same size, but additional condo-specific costs can push the value difference much further.
Down payment
Typically, 20 to 25% of the purchase price, though this can run as high as 50% in the city’s most expensive buildings. A co-op board will require, on average, two years of mortgage and maintenance in savings.
Most New York City condos don’t have the financing minimums; the acceptance of the size of the down payment will be decided by the buyer and the seller and possibly the mortgage lender.
Monthly fees
Known as a maintenance fee, this Known as common charges, these fees pay monthly levy pays for building expenses for building upkeep. and property taxes.
Possible add-ons
As a shareholder you may be expected to contribute to the building’s reserve fund or contribute to building assessments.
You may be required to pay for staffing or amenities, or contribute to other building maintenance funds.
As a shareholder you may be expected to contribute to the building’s reserve fund or contribute to building assessments.
You may be required to pay for staffing or amenities, or contribute to other building maintenance funds.
Lower than for a condo (provided you’re applying for a mortgage). Costs will include attorney fees and the mansion tax. The tax starts at 1% of the purchase price for homes between $1 - $2 million and rises to 3.9% for homes over $25 million. Because buying into a co-op is buying shares in a corporation, there’s no title insurance requirement.
Higher than for a co-op (provided you’re applying for a mortgage). There’s the cost of your own attorney, which can add $5,000 or more. Title insurance up to $4,000; bank fees, up to another $2,000 to $3,000. Mortgage tax of 1.8% for loans of less than $500,000 and 1.925% for loans of $500,000 and above. And mansion tax for purchases above $1 million.
Purchase price
Possible add-ons
Closing costs
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THE INSIDER’S GUIDE TO BUYING A HOME IN NEW YORK CITY
The ABC’s of Purchasing
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Your agent will be able to provide you with comparative market analysis and objective advice based on real time market data.
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Begin Search
Pre-approval and begin property search. Generally, a buyer sees 10-15 properties before submitting an offer
Preparation
Your agent will provide a comparative market analysis for the unit which you would like to make an offer on. This will include sold units in the Building and geographic area to determine and initial offer. Your agent will be able to provide you with objective advice based on real time market data.
Offer Negotiation & Acceptance
Often there will be some negotiation related to the selling price, terms and possibly additional items like furniture. Having an objective opinion from a buyer’s agent negotiating on your behalf can save you thousands of dollars and or/keep you from overpaying for a specific property
Contract Review & Attorney Due Diligence
Your attorney will review the contract terms and take an extensive look into the financial stability of the building. The attorney prepares a questionnaire for management and reviews board minutes which gives you valuable insight into the history of the building.
Contract Executed
Both parties sign the contract to purchase and the agreement is now binding. At this time the buyer will be responsible for placing 10% of the purchase price in escrow.
Financing
f you are financing any portion of the purchase, the next steps will involve working closely with your mortgage lender. • Complete loan application • Bank appraisal requested • Receive formal loan approval • Loan commitment letter is issued from the Bank
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THE INSIDER’S GUIDE TO BUYING A HOME IN NEW YORK CITY
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The ABC’s of Purchasing
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Having an objective opinion from a buyer’s agent negotiating on your behalf can save you thousands of dollars.
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Building Sales Application
The next phase would be submitting the application (condo) or board package (co-op). The applications can vary greatly from building to building but be prepared to submit the same documents that were submitted to secure your mortgage in addition to others. Even if this is an all cash purchase some form of background documentation will still be required. Having an agent who is highly experienced at submitting purchase applications is valuable at this stage because management companies demand that an application be submitted in perfect order. Otherwise, it will be sent back and can delay the process. Additionally, if you’re purchasing a co-op you will most likely be required to have an interview with the board members. Again, an experienced agent comes in handy in prepping for the interview.
Board Approval
Approval is granted! The bank and attorneys prep the required documents for closing. In conjunction with the bank, attorneys and building management a closing date is scheduled.
Offer Negotiation & Acceptance
Often there will be some negotiation related to the selling price, terms and possibly additional items like furniture. Having an objective opinion from a buyer’s agent negotiating on your behalf can save you thousands of dollars and or/keep you from overpaying for a specific property.
Closing Day
Prior to or on the scheduled day to close you will do a final walk through inspection of the property with your agent. At the closing table you will review and sign documents with your attorney present. The closing generally takes about an hour or so.
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Ready to start something?
Drop me a line at sid.gandotra@corcoran.com