How much should I put down? One of the questions we are asked about most often is about the size of the downpayment. In most of the country, this answer is determined by credit and income factors. Lenders offer pre-loans that require anywhere from 5-20% downpayment - so in theory many first time home buyers would be financially qualified to buy a home with as little as 5% down. However, the New York housing market it unique, and a number of factors drive us to advise almost all buyers to consider 20% downpayment a minimum for purchasing a home in NYC. A majority of the apartment inventory in New York City (roughly 70%), are co-ops. Co-ops are unique to New York, and most require a minimum downpayment of at least 20% down, with some requiring higher percentages, with 25% most common, and even higher amounts more rare. Condos typically allow buyer to put as little as 10%, but in reality, where demand for a particular unit is high, we find that 10% is simply not competitive, even if those prospective buyers are offering a higher purchase price. Do I need to be all-cash to be competitive? Even at the peak of the all-cash-buyer phase, most purchases still involved financing. So what if you are one of the majority that needs financing... well the first step is contacting a mortgage professional and getting a preapproval letter. In order to make an offer where some part of the purchase price will be financed, a buyer will have to submit a preapproval letter. It could take a few days to gather the documents necessary to present to a bank, and the bank will have to review and verify the buyer's financial profile before issuing such a letter. Thus it is important to have started the process of obtaining a preapproval letter with a mortgage professional very early in the process. Should I make a lowball offer? As an agent, I’m often asked, how low can I go? Especially where buyers smell negotiability, it may be tempting to make a lowball offer and just see what happens. The truth is lowball offers have a tendency to alienate sellers and can preclude negotiations, rather than encourage a dialogue. A low (but not lowball) offer may be appropriate in some cases, depending on current market conditions, the type of property, and your relative strength as a buyer, and other factors. However, a perceived lowball will almost always be counterproductive. In a normal market, I advise clients to stick within 7% of the asking price if we believe there is negotiability. Any lower than that and the sellers would have lowered the price themselves. Unlike resale properties, luxury new developments may offer greater opportunity for price negotiation. Depending on the sheer number of similar new development units that hit the market at once, what percent of units are currently in contract, and and how aspirational the sponsor was in pricing those units, there may be significant (20-30%) room to negotiate below the asking price. As always, if you’re looking to buy a property and want to know more about how much you should offer and any other steps in the process, feel free to reach out.

Buying an apartment also means buying into a building, and oftentimes the building itself will affect your quality of life much more than the appearance and comfort of your home. What are some things to consider? Monthly Costs When shopping for an apartment, keep in mind that maintenance or common charges may affect your pocket book much more directly than price. Buyers tend to be very sensitive to price, but consider that a $100,000 difference in price equates to roughly $500 each month in additional mortgage payments. By contrast, maintenance or common charges among comparable units can vary widely. When looking at monthly charges, be sure to consider the trend in the building: if the monthly charges are already on the high-side of the acceptable range, but there have been regular steep increases, it may not bode well for your monthly budget and for resale. Similarly, keep in mind what amenities you truly want or need; most buyers inquire about amenities, but few actually use the roof deck or gym. Owner Occupancy One of the best reasons to buy rather than rent is having neighbors who are likewise vested in the well-being of the building. When buying a condo, especially if you intend to live there, it is important to consider the mix of owner-occupied vs. rented apartments. Beyond losing a sense of community, a low rate of owner-occupancy may limit financing options. This is less of a concern with coops, which usually discourage -- or even outright prohibit -- sublets or pied-a-terres. Building Rules No matter your personal feelings about sublets or dogs, overly prohibitive building rules can inhibit you as your circumstances change and will limit the market for resale. I recommend making sure building policies are in-line with norms in the area -- some subletting should be permitted, alterations should be governed by a process (but a reasonable one), co-purchasing and guarantors should be permitted in certain cases ... Appearance Curb appeal is one of the most important factors in buying or selling a house, but less important for an apartment building (luckily for me and my 1960s postwar brick coop). For an apartment building, it is the interior spaces that matter -- for example, the lobby, hallways, and elevators. Again, balance is key. Over-the-top renovations, which unduly increase monthly costs for owners, are unnecessary and counterproductive, but common areas should definitely be neat, clean, bright, and maintained. Health of the building Many buildings have issues -- some may have ongoing litigation, facade issues, low reserves, a boiler past its prime -- but I don't recommend looking at any single factor as determinative. Keep in mind the big picture and your goals and circumstances. A building that has issues that are being actively resolved by a responsible Board may provide a value proposition with upside down the line.

Many buyers are intimidated at the prospect of competing against an all-cash buyer for a hot property -- but does cash always win? First off, the seller gets the same proceeds whether they are paid by the buyer or his lender. More importantly, all-cash buyers tend to grossly overestimate the value of their cash and their draw as an all-cash buyer, leading them to make noncompetitive offers. But an all-cash offer does have some value. Certainly it will tip the scales with all else being equal. And in some situations it might justify a modest discount on the sale price. The value to a seller of an all-cash offer is based on the following two advantages: 1. Faster Closing: In a typical deal, eliminating the mortgage application and underwriting process can cut anywhere from 10-25 days off the duration of the transaction. Buyers who are financing typically have between 30-45 days from contract signing to apply for their loan and obtain a commitment letter from the bank. 2. Eliminating Risk: To understand why and how cash reduces risk, it’s important to consider the three things on which financing hinges -- the buyer, the building, and the unit. By the time a seller accepts a buyer’s offer, they will feel pretty comfortable with the first two of these factors, so the only question mark is whether the unit will appraise at the contract price. While low appraisals are not common, even a $1 shortfall could jeopardize a financing-contingent deal where the buyer is putting down the standard 20% of the purchase price. It is important for all-cash buyers to be realistic about the value their all-cash status holds. Most often, the discount that it can entice is not worth tying up their capital or foregoing other benefits of cheap financing options.

Most coop boards will only schedule an interview if they have already vetted your application and determined you've meet their basic requirements. Keep in mind a few of these helpful tips to get a swift board approval: 1) Being invited to the interview is a good sign. The interview is the board’s opportunity to meet you and ask specific questions about your application. The style of the interview can range from an informal gathering of board members in an apartment to a formal interview with board members lined up at a table with you in the hot seat. 2) Dress up and be prompt. 3) Prepare for a lack of privacy. The board has great latitude in the kinds of questions it can ask, be prepared for this and do not avoid answers to personal questions, or be angered by this intrusion. 4) Don't get defensive. As a further point to number 3, do not get defensive to any intrusive questions or remarks that may seem off-putting. The board is made up of people with quirks, and some may not correctly remember details of your application and their questions may seem off. 5) Know your application. You should be able to quickly and concisely answer any questions asked regarding your application, preferably without having to look at your application. 6) Couples should decide in advance who will answer what types of questions. 7) Unlike a job interview, do not try to sell yourself. Only answer questions asked and let the board run the show. Boards rarely turn down applications for being too boring. 8) Never volunteer information or engage in unsolicited conversations except for basic cordial remarks and greetings. 9) Do not ask questions. Questions can often unintentionally convey negative information to the board. 10) A short interview is better than a long one. While there are no hard and fast rules, a short cordial interview with a few board questions and remarks is often the best co-op board interview. 11) Do not expect an answer at the end of the meeting. Most boards do not give their decision until a day or two after the meeting. 12) Do not discuss renovations. Don't volunteer information about renovation plans. If they ask if you intend to renovate, say something short and non-committal like the unit may need some updating, but you have no concrete plans at this point.

You've seen the perfect apartment, made an offer, and, eek, it's accepted! Break out the balloons and start plotting where to put your couch... or rather, not yet. Almost everywhere outside of NYC, an offer to purchase is accompanied by a "binder" -- good faith money which practically speaking binds the parties to each other if the seller accepts the offer. But NYC has no binder system, which means an accepted offer is not binding on either party. In fact, the period from accepted offer to fully-executed contract may be the most stressful part of the whole process. So what happens when an offer is accepted in NYC? The short answer is the attorneys take over: They negotiate a contract, and the buyer's side completes due diligence. The mechanics of this may vary, but essentially, once the seller accepts an offer, the brokers put together a deal sheet which is sent to the attorneys for both sides specifying the negotiated terms and the process is triggered. This process of due diligence and contract negotiations usually takes 3-14 days. When the contract is finalized, it is first signed by the buyer who provides a 10% deposit to be kept in escrow, then it is signed by the seller and returned to the buyer's attorney. The contract is not fully executed until it is received by the buyer's attorney.

What will banks consider in reviewing my file? Banks will review your Credit, Income, and Assets. No one factor is determinative, rather the entire financial profile, as well as the condition of the building, is taken into account in determining whether a buyer qualifies for a mortgage and/or what type of loan program is available to him or her. Credit: It goes without saying that bankruptcy or foreclosures will make it very difficult to obtain financing. Other credit snafus will also negatively impact financing such as carrying a high percentage of debt or having a history of delinquencies. Income: Income is the denominator that can limit the amount of financing. Banks consider an applicant's debt-to-income ratio in determining how much debt they can take on through financing. Debt-to-income ratio is the measure of total debt obligations (the monthly carrying costs of the purchase including mortgage and monthly maintenance/common charges and taxes on the property along with any other mortgages, student loans, outstanding credit card debt) divided by verifiable income. Assets: Most banks will want to see some post-closing reserves (mortgage + monthly carrying costs) -- this could be a year's worth, or or 2 months', or 6 months' worth.

Pros of New Development 1. Floor Plans Designed for Modern Living New developments are designed with today’s buyer in mind, often featuring open layouts, large kitchens, walk-in closets, en suite bathrooms, and efficient use of space. 2. Quality of Finishes Developers invest in high-end finishes and appliances to attract buyers, including premium countertops, custom cabinetry, hardwood flooring, and luxury fixtures. 3. Amenities Many new developments offer amenities such as central air, in-unit laundry, fitness centers, roof decks, lounges, doormen, storage, parking, and pet-friendly spaces. 4. No Renovation Costs or Headaches New developments offer a true move-in ready experience, minimizing the need for immediate repairs or renovations. 5. That Feeling of Being the First For many buyers, part of the appeal is being the first person to live in the home and enjoy everything brand new. Cons of New Development 1. Higher Closing Costs Developers often shift certain closing costs to buyers, including transfer taxes, attorney fees, and administrative charges. 2. Higher Monthly Carrying Charges New development condos often have higher common charges and taxes due to extensive amenities and newly assessed property taxes. 3. Unpredictable Timeline Closing dates and amenity completion timelines can shift, especially in buildings still under construction. 4. New Construction Concerns Even with warranties, new buildings often experience minor issues as the property settles over time. 5. Price New developments typically come at a significant premium compared to resale properties, often trading at substantially higher prices for comparable space.