As a first time buyer in NYC, it is important to know the real price tag on your purchase and create a realistic budget that will help narrow your search to properties you can afford and ensure you are able to make a competitive offer when you find "the one." 1. Downpayment Most coops will require that buyers put down at least 20% of the purchase price as a downpayment (some may have higher requirements of 25%, 40%, or 50%). Condos have a lower threshold -- usually 10% -- but financing more than 80% will involve a surplus on the monthly mortgage payments so will amount to a costlier purchase. Especially in a tight market, buyers will be encouraged to put down at least 25% which decreases the risks of the deal falling through due to a lower-than-expected appraisal - it also difficult to be competitive in any kind of bidding war with an offer that includes less than a 20% downpayment. 2. Closing Costs Closing costs vary based on whether you are buying a coop or a condo, and whether the purchase exceeds $1 million. Your attorney or real estate agent can provide you with detailed information on closing costs for your specific purchase, however, the most basic takeaway is that closing costs for coops up to $1 million is around $8000-$8500 regardless of their cost or amount financed. Condo closing costs are significantly higher, especially if you are financing (about 2% of the financed amount is due as a mortgage tax). Purchases over $1 million in both coops and condos are subject to a 1% mansion tax. 3. Reserves Most coop boards will require buyers have some liquid funds remaining after closing, with the amount varying from 6 months to 2 years. This means that coop buyers must show that after deducting downpayment and closing costs, they have 6- to 24-months’ worth of their mortgage and maintenance remaining in their bank accounts. Condo boards have no reserve requirements though bear in mind that most lenders will require some reserves although they differ on whether those reserves can be liquid or illiquid (i.e. retirement accounts). 4. Monthly Carrying Costs In addition to your monthly mortgage, you will be paying maintenance for a coop (includes your share of real estate taxes and common charges) or separately common charges and real estate taxes for a condo. In Manhattan, $2/square foot is considered a reasonable monthly total for these fees, in Brooklyn, monthlies tend to be lower. While these costs can fluctuate based on amenities, some smaller buildings have surprisingly high monthly charges since basic costs are shared by a smaller number of residents. If these costs price you out of your desired area, I often advise my buyers to think outside the box and look at adjacent neighborhoods or areas that have the same look and feel as their ideal neighborhood. It's almost always better to opt for a larger apartment in a transitioning area rather than a smaller one in an established neighborhood. For Brooklyn buyers, this might mean Windsor Terrace or Greenwood Heights in lieu of Park Slope, Clinton Hill or Crown Heights rather than Fort Greene, or Prospect Park South or Kensington instead of Ditmas Park. In Manhattan, the East Side has a lot of value: Midtown East, Murray Hill, and the far East reaches of the Upper East Side and Lower East Side provide great entry level apartments with room to grow. But for those with their heart set on the West Side, I suggest buyers look North: the West Side is beautiful all the way up the Hudson River, from Manhattan Valley through Hudson Heights. Check out my quotes and ideas from my colleagues in this article in Brooklyn Underground to advise new buyers on which neighborhoods offer them the most opportunity, both in terms of price per square foot and return on investment in resale value after less than 10 years of ownership. #FAQ #FAQBuyer

Have you ever noticed that almost every condo lists the square footage but coops rarely do? Many potential buyers will want to know the square footage of an apartment, so why is it only sometimes included and is it really all that meaningful? Square Footage in Condos vs. Co-ops: Condos are required to include a description in their offering plan of the methodology used to calculate the square footage of all units. Legally, when selling a condo unit, the developer or sponsor must state the specific square footage of the property being sold because the buyer is literally purchasing that exact space. Because of this, almost all condo listings, including resales, report the exact square footage of the apartment as outlined in the offering plan. In co-ops, as we have discussed before, a buyer is purchasing shares in the corporation that owns the building; they are simply being given a proprietary lease to reside in a particular unit. Therefore, there is typically no official historical or legal record that lists the exact square footage of each apartment and how it was derived. Because of this, many brokers will decide not specify the square footage when listing a co-op apartment, since any number they use will only be an approximation and may vary greatly depending on the methodologies used by the person commissioned to diagram or measure the space. All Square Feet Not Equal: Even if measured properly, square footage can vary widely depending on the methodology. Some measure from the outside of the outer walls in (meaning all walls of the apartment add to the square footage even though you can't live inside the concrete/brick), some measure the space within the inside of the exterior walls (so all interior wall space is counted, though not the exterior walls), others measure livable space by adding the dimensions of the floorspace, which seems the most useful but even then the figures can vary depending on whether the measurements go only to the window sill or include the sill all the way to the window. Because many different professionals vary on their standard of measurement, there is not one right number. We always recommend people look at the actual usable space, and place less emphasis on total square footage. Beyond that, even with identical layouts, two apartments can feel vastly different depending on ceiling height and size/number of windows. #FAQ #FAQFindingaHome

Most present and future apartment-owners in New York City are aware that the process of buying and selling a home is anything but simple. Co-ops in particular have gotten a less than winning reputation; many buyers are nervous of the ever ominous "Co-op Board Interview". The greatest fear, for co-op sellers and buyers alike, is that after negotiations, mortgage applications, lawyers fees, and countless hours of preparation, the buildings co-op board could simply choose to not approve a prospective buyer and both parties would be back to square one. What is less well understood, however, is that virtually all condo boards can ALSO exert some measure of control over who becomes an owner in the building. This ability is given to them within their ''right of first refusal'' -- a legal clause used widely, that when applied to real estate, gives the condo board the right to, should they not like or approve of a specific buyer, have a chance to buy the condo unit from the owner by matching the prospective buyers offer (same price, terms, timeline, etc.) Like most differences between condos and coops, the distinction between approval vs. right of first refusal lies in the differing forms of ownership. Since a co-op is a corporation, the co-op board (like the board in any company) has the final say on the rules and functions of the corporation and thus can control who is allowed to become a shareholder and thus a proprietary leaseholder. As long as the co-op does not violate federal, state or local laws against discrimination, the board is free to approve or deny prospective purchasers for any reason - and in fact does not need to offer any reason at all. With a condo, the apartment itself is considered to be real property. By U.S. property law it is not permissible to impose an ''absolute restraint on alienation'' when transferring ownership of real estate to someone else. In more simple terms, a condo owner is not limited in selling their property to whomever they want for whatever terms they want. But a condo board may require an application to find out more about prospective tenants, and has a right to buy the property from the seller by exercising its right of first refusal if they want to block the sale. So different from a coop, a condo board may only block a sale by buying the apartment itself. Condo boards vary widely in terms of what information they request from a prospective purchaser. Some coops simply require that they be informed the buyer's name, and they issue their waiver without a single thought. At the other end of the spectrum, a condo board may require the full panoply of bank statements, tax returns, reference letters, etc. While it is tedious to pull together, there is comfort in the fact that the board will almost invariably grant the waiver provided the application is complete. Get more insight from the The New York Times... #FAQ #BlogPosts

Many of NYC's most iconic structures, including the Chrysler Building, the Empire State Building, and Rockefeller Center, are prime examples of Art Deco architecture and imbue Manhattan with a sense of optimism about the future and mankind's ingenuity. Art Deco was the predominant style in the 1920's through the 1940's; it is simple yet opulent, striking yet tasteful. Art Deco is top of mind for me as I've been busy with my team's two newest listings, both of which are beautiful examples of Art Deco style, featuring sunken living rooms, arched doorways, and corner casement windows. Regardless of your home's architectural style, you can bring Art Deco style into your home by incorporating these four defining features: 1.) Geometry Geometric shapes -- both angular and arches -- are staples of Art Deco design. Geometry can be found in the shape of the items or in repeating patterns and textures (popular patterns include trellis, checkerboard, stripes, and fans). Symmetry is another geometric feature used in Art Deco design, for example in the arrangement of items on mantles and consoles. 2.) Shiny Surfaces Shiny surfaces scream Art Deco -- think lacquer, polished wood, metal, or mirrors. You can go all-out with high-gloss lacquered walls, or simply add a lacquered table or a beveled mirror. I also love Jonathan Adler pottery in high-gloss gold or chrome, which brings an unexpected pop to traditional ceramics. 3.) Animal Prints From subtle shagreen to over-the-top leopard, real and faux animal prints are common in Art Deco design. The right dose of animal prints can bring a hint of exotic glamour. Just don't overdo it. 4.) Black and White My personal favorite element is the use of black and white. This high contrast, graphic look is striking when paired with geometric shapes. Some examples include checkerboard tiles, striped rugs, a gallery wall using black frames with crisp white matting, or subway tiles in a bathroom with black trim pieces creating a chair rail or outline around the room. #BlogPosts

While coop apartments are not entirely unique to NYC, there is no other place where they make up a majority of the housing stock as they do here. The crux of the distinction is that a coop apartment itself is actually not real estate, rather the apartment's owner is a shareholder in the corporation which owns the building and has a lease to reside in the specific apartment. So what does this mean? It means you still "own" an apartment, but there are some strings attached. Since a potential buyer of a coop apartment is seeking membership in a private corporation rather than purchasing real property, the corporation can pick and choose to whom to extend membership. Thus the dreaded coop board packages and even more dreaded coop interviews. While the corporation can't base its decision to reject a potential shareholder based on membership in a protected class, boards do not articulate the underlying reasons for a rejection which has in the past resulted in the exclusion of minorities. Now it means that a coop board can require disclosure of all financial details and any personal information that will aid in their decision whether to approve a potential buyer. There are some scary boards out there, but most just want to make sure that the purchase is financially stable and will not default on their obligations. Your real estate agent can advise you as specific requirements and will help you prepare a board package. In addition to the power to approve or reject potential new shareholders, the board can set rules curtailing certain ownership rights. For example, many coop boards restrict the right of an owner to rent out (technically, sublease) their apartments. Others may require that the apartment is used as a primary residence and not as a pied-a-terre. Other differences exist, but are less significant. For example, individual owners of a coop apartment are not subject to property tax -- again since they don't own any actual real estate. Instead, the whole corporation incurs real estate taxes for the building, and each unit holder pays their share as part of the monthly maintenance charges. Thus there is a single "maintenance" for coop apartments (on listings the "% tax deductible" figure represents what portion goes to taxes), whereas condo or other real estate owners get separate bills for common charges and real estate taxes. In either case, the real estate taxes are tax deductible for individual unit holders and the total monthly charges are roughly equal all other things being the same. Another example, a "mortgage" on a coop apartment is not actually a mortgage -- the collateral is not the apartment as it would be in a coop or other real property, but rather a lien on the shares in the corporation. For most intents and purposes, the loan is treated the same as a traditional mortgage, at least when dealing with lenders familiar with the NYC market (out-of-area lenders may be unfamiliar with NYC coops and not able to complete the transaction). Beware, however, that a mortgage recording tax of 1.8% (or 1.925% for loans over $500,000) will apply to loans on condos but not coops. Some distinctions that work in favor of coop ownership? If the buyer is planning to finance part of the purchase price, coops have much lower closing costs as they are not subject to the mortgage recording tax (since it's not really a mortgage...). Now that we've covered the difference between Coops and Condos, time for the practical part: What does this distinction mean in terms of inventory and pricing in NYC, and why should a buyer choose one over the other? First some numbers: There are about 175,000 owner-occupied housing units in Manhattan in TOTAL! Manhattan is a very small island and mostly rentals—625,000. Of the 175,000 total owner-occupied units, 155,000 are coops and condos, and 70-75% of those are coops. Not only are condos fewer in number, they are generally about 30% more expensive on average than a comparable coop. Brooklyn is a bit less lopsided: though the resale market is still dominated by coops, the price difference is less pronounced, with coops about 10% less expensive than comparable resale condos. In terms of available inventory, the number of new listings for condos has been growing while the coop market has been shrinking. The uptick in the condo supply is due mostly to the proliferation of high-end luxury development, which is pushing the relative prices even further apart with condos now about 44% more expensive on average than coops. With coops generally more abundant and so much cheaper, why pay more for a comparable condo? First, some purchasers simply may not qualify for or afford a coop. While they are more expensive, condos often require a lower minimum down payment amount so a liquidity-challenged purchaser may not be able to cough up the 20%+ down payment required by most coops. Even if a purchaser can afford the down payment, they may not qualify to purchase under a coop board's financial requirements. Coop boards may set rules on minimum financial requirements or may more informally deny applicants who they do not view as financially viable. The two biggest financial considerations for the coop board are debt-to-income ratio (usually 25%) and post-closing reserves (usually at least a year's worth of mortgage and maintenance payments after closing costs). This means that if a purchaser has limited savings or a relatively low salary, they might not qualify for a coop, or their budget for a coop might be much be much smaller than their budget for a condo, which has no such financial requirements. Second, a purchaser might want to pay extra for certain freedoms. Like the freedom of not disclosing detailed financial and personal information to the coop board as part of the application process. Or the freedom to sell their apartment to whomever they choose rather than choosing a most qualified applicant and wondering if the board will approve or reject the purchase. Beyond curtailing certain freedoms during the purchase/sale process, the coop board can also set rules regarding the use of the apartment. Most coops limit owner's ability to rent out their apartments (for example, may rent 2 out of 5 years, may rent for one year with the possibility of extension, may never rent...) whereas condos have no such controls. Some coops may require that the apartment be used as a primary residence and not a pied-a-terre. There are many other factors that go into the determination of what sort of ownership is right for a particular purchaser, and many purchasers may fall into a gray area: Some coops might work while others won't, and comparable condos might be out of reach financially, so the trick is finding the right apartment based on individual circumstances and goals. Never fear, real estate agents are there to help sort through these considerations and find you the right home or investment property. For any questions regarding the NYC home-buying process or residential real estate market, please reach out. #FAQ #FAQFindingaHome

Just when you think you’ve got your place decorated, you are faced with the greatest design challenge of all: baby’s arrival. Making a home baby-friendly is not just about installing cabinet locks and wall anchors. It also means reassessing your existing furniture choices (prioritizing safety) while incorporating your new baby stuff in a way that doesn’t make your living room feel like the inside of a preschool. Of course, I’ve made a few unstylish choices for the sake of our comfort or convenience (hello: jumperoo in my living room). Ceding some territory to your baby is unavoidable, but here are some of my favorite baby-friendly options for the style conscious: Rethinking the Layout Many New Yorkers do not have the option of turning a spare bedroom into a nursery. In some larger one bedroom apartments, a dedicated baby space can be temporarily and inexpensively carved out, usually without the need for extensive building approvals. Temporary wall companies can install a pressurized wall and your choice of door in a matter of hours. These are just like ordinary walls -- drywall attached to wood studs/frame -- but the frame is held in place using pressure against the floor and ceiling rather than screws and nails. Most buildings will not consider this to be an alteration -- in those buildings, as long as you use a company that is reputable and insured, you simply inform management and then schedule the installation. If you’re in a rental, you should always check with your landlord beforehand to be safe. The Nursery I wanted a nursery that was suitable for a newborn as well as a toddler or older kid. For visual impact we installed a wallpaper mural -- ours looks like a scene right out of “Where the Wild Things Are.” Wallpaper murals can be cartoon-y but some vendors -- like Rebel Walls (which we used), Society 6, Anewal, and Anthropologie -- offer some great options that are more artistic. For only a few hundred dollars, we styled Teddy’s nursery with a beautiful wall mural, whereas a custom wall painting would have cost us thousands of dollars. For flooring, carpet is king. Wall-to-wall carpeting has come a long way from the 80s rec room, but it can be costly. For a more budget-friendly option, Flor floor tiles can be cut to fit the space and are easy to install and customize. A big benefit to these is that each tile can be washed, or in the case of more serious stains, cheaply replaced. We ended up going for an even more cost-effective option as our room is almost exactly the size of a standard 8x10 rug -- a thick (¾” rug pad) topped with a stain-resistant rug from Overstock. For a dresser/changing table, we went with the Keekaroo Peanut Changer, which can be wiped down rather than washed in the laundry. We keep the Changer atop a dresser we already owned instead of buying a dedicated changing table. was hesitant at first, but the final piece of our nursery which we couldn’t live without is the glider/recliner. There are sleeker options out there, but comfort should take precedence over style here. The Rest of the House Pre-baby, we had a sleek Platner coffee table, but a thick glass sheet on top of a crown of spikes is not exactly baby-friendly. After searching for a safer table that was affordable, stylish enough to work for a few years, I decided to go in a different direction and just get an activity table. We chose this unobtrusive black and birch table with a chalkboard surface. Its rounded edges are great for Teddy, and it doesn’t scream “kid’s table.” In our dining room, we opted for the Stokke Tripp Trapp high chair in a neutral gray-wash, which looks modern and tucks under the table like a regular chair. While much of baby-proofing (like outlet covers and corner protectors) is not terribly fun or exciting, overall I’ve enjoyed adapting my home. If you have any other ideas or suggestions that you’ve found worked for you, please share them! I’m always looking for innovative design ideas that evolve with our changing lives. #BlogPosts

While New York City is recognized around the world for its 20th century skyscraper-filled skyline, it is predominantly a 19th century city, architecturally speaking. Much of New York’s architectural distinction derives from its rowhouses. Often referred to as "brownstones," NYC's rowhouses are, in fact, widely varied and include countless different styles. These standard, narrow, three-to-five story residences which were constructed to house an expanding middle class population more than a century ago. These distinctive residences are the dominant building type in the majority of the City’s historic districts, and their care and maintenance have a substantial impact on each neighborhood's unique character. There currently are more than 100 historic districts throughout New York City, all of which are as diverse as the owners and residents who live in them. They encompass a variety of styles, from the simple brick buildings of Ridgewood North Historic District, Queens to the elegant Beaux-Arts limestone maisonettes of the Upper East Side and the ornate Queen Anne and Romanesque Revival style 19th-century mansions and rowhouses of Crown Heights North in Brooklyn. In NYC, The Landmarks Preservation Commission (LPC) is the Mayoral agency charged with designating and regulating these districts, as well as stand-alone landmarks. In order to protect these special properties, the Landmarks Law requires their owners to apply to LPC to obtain permits for certain types of exterior work before the work begins. The decision to issue a permit rests on whether the proposed work is “appropriate” to the character of a building and/or the surrounding district. Specifically, the LPC must give advance approval to any alteration, reconstruction or demolition affecting a landmarked property. Approval by the LPC is required for any exterior work, except for routine maintenance or repairs, such as replacing a broken window pane or removing small amounts of graffiti. Interior work to a landmarked property generally does not require LPC approval except when: (i) the work will affect the exterior of the property; (ii) the interior of the property has been landmarked; or (iii) the work affecting the interior of the landmarked property requires a building permit. Examples include changing exterior paint color, porch style, door and window frames and treatments, and much more - specific info can be found on the LPC's website, where manuals based on property types and locations are available. #FAQ #FAQNYLiving

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. #FAQ #FAQFindingaHome

HDFC Co-ops (Housing Development Fund Corporation) are something most New Yorkers are aware of but few fully understand. The idea of Co-op ownership alone can be complicated and the added restrictions most people know HDFCs have for potential buyers and owners can make many unsure exactly what and how they function, and who they are for. First, let's take a look at the official NYC HPD (Housing & Preservation Department) definition and description... Part of the confusion surrounding HDFCs stems from the fact that not all use the same income restrictions. As stated by the HPD above, co-ops can have an income restriction of anywhere between 80% AMI and 120% AMI. HDFCs have a cap on the taxable value of the units that, in most cases, significantly lowers real estate takes on the property. This exemption is effective only as long as the project is owned and operated by an HDFC that is in conformity with the laws that govern them. The HPD Is authorized to revoke this tax exemption if it determines that the HDFC is not in compliance. Almost all HDFC cooperatives require owner occupancy and limit subletting. Although short-term subletting with board permission is acceptable where the shareholder intends to return to the apartment, long-term sublets are not permissible in any circumstance. Generally, subletting is limited to no more than 18 months in any 5-year period. In addition, it is not acceptable for shareholders to charge subtenants more than 10% above the monthly maintenance. Any subtenant must also meet the applicable income standard of the cooperative. It is important when looking at HDFC apartments to make sure you are not falsely lured by the low price tag. The system is structured for you to not make a profit on a resale, and most HDFC Co-ops have higher than normal flip taxes that sellers must pay back to the co-op on any profits made in a resale. It is also important to have a good and savvy real estate attorney on your side who will ensure all of your due dilligence materials during contract are accurate and complete. Since a co-ops financials are managed by the Board and there is always room for mismanagement, error, and even fraud where discounted taxes are involved, especially in a system built on real estate in a market like NYC where prices are only rising. That said, HDFCs do provide an amazing option for hardworking New Yorkers to own a piece of the city they help build every day. They can be an amazing option for those that meet the requirements - if you fit within the criteria below, please feel free to reach out with questions or for more information! Household Size 120% AMI Income Limits (2015/2016) 1 $72,600 2 $82,920 3 $93,240 4 $103,560 5 $111,960 6 $120,240 #FAQ #FAQNYLiving

Interior design is highly personal - everyone has a slightly different idea of what a "beautiful" home looks like. However, when listing your home for sale, it’s important to make design choices that are as widely appealing as possible, to ensure that prospective buyers feel comfortable and at home in the space. While a major renovation for the sake of appealing to more buyers is usually not a sensible investments, small tweaks can mean the difference between multiple offers and hoping for the buyer who can see past your personal choices. When trying to connect with a larger audience, it’s best to stick with décor that is clean, modern, minimal, and cohesive. I often rely on mass-market brands like West Elm and CB2, who make a business of appealing to a wide and urban audience, for design ideas and inspiration. Here are my top five strategies for tweaking an apartment from niche to "nice" for the most people. 1. Use Cool Paint Colors: Cool tones (blues, greys, greens) create a space that feels calm and quiet. Lighter shades in these family are also the best at reflecting (thus maximizing) light. Darker shades in these tones make for interesting accent walls or a great wall to make strange nooks look purposeful. ​ 2. Furniture to Scale: Make sure your furniture is scaled to your home. This doesn't necessarily mean physically small items work better, it's all about the amount of visual space items take up relative to the amount of space. A tailored sectional is much larger than any single armchair, but an oversized, cushy armchair will dwarf most small spaces. I find this to be especially true with dining chairs. Even sleek chairs can take up visual space and appear like blocks, but sleek items, particularly those that are wire, caned, or acrylic recede from view. 3. Pinterest Worthy Vignettes Use specific furniture and accent items to highlight the best features of each room – if you have a large corner window, or a particularly beautiful kitchen island, create a vignette that will to draw people’s attention to it. My go-to vignette is a tall item (vase or candlesticks) next to a stack of design books, with an interesting object. 4. Decluttering Make sure there is “white space” in every room – clear surfaces, open space on shelves, etc. A room rarely looks good with every square inch filled. Bookshelves over-flowing with books, piles of paper, collections of random décor items – unnecessary clutter often makes your home appear overwhelming, and thus unappealing, to prospective buyers. 5. Impactful Minimal Décor: Rather than filling every inch of wall space with random art, thing about wall decor as vignettes. Whether it is an oversized painting or a cohesive gallery wall, your art work should create an impact. These small improvements can make a big difference, but there are more than just simple design and decor items that affect a home's price. To see how we value a home's physical space, read about our top factors here. Investing in physical improvements of a home can increase its sale price dramatically, but can be costly depending on the service. With the Compass Concierge Program, Compass will pay the upfront cost of select services that can increase a home's value. From deep-cleaning to cosmetic renovations, we'll elevate your home's appeal and create a tailored plan to maximize its potential on the market. When your home sells, the cost (and nothing more) will be added to the commission. This apartment was cleaned, staged, and painted with funds from Compass Concierge. These services, supplemented with decor and styling by the Isil Yildiz Team, gave this Park Slope brownstone a fresh, modern update to maximize its appeal. #FAQ #FAQSeller #BlogPosts

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. What is a good credit score is changes with the times... above 700 used to be considered excellent, but now many consider that benchmark to be 740. In any event, the importance of good or excellent credit cannot be overstated. 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. Debt is pretty easy to calculate though it varies from property to property that the buyer is considering. Verifiable income is easy if the applicant(s) have a salaried job, but can be much trickier with self-employed applicant(s). In fact, each bank might have different standards for determining income in these trickier cases, so an applicant's ratio may vary between different lenders. Different lenders and programs vary in the ratio they require: In most cases, on jumbo loans (loans over $625,500), banks will want ratio of 43% or below, but some use expanded criteria and will lend a higher amount. Loans under $625,500 can be obtained with a debt-to-income ratio of up to even 50 percent. There's no magic number, so it's important to consult with your mortgage professional when considering different properties. 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. Some programs may accept retirement assets toward reserves, while other lenders may require the reserves to be liquid to qualify for their lowest rates. What does all of this mean? There are a huge number of lenders and even more loan programs out there, and even if you are not an ideal candidate, there will likely be a right program out there for you. If one factor is lacking (like income), banks will place greater emphasis on the other factors. It's all a sliding scale, and different lenders and loan programs require different benchmarks. There might even be special circumstances that would justify a loan where the lender's standard analysis would normally result in a rejection (like for example, if you held a great deal of assets in the bank or getting a co-signer). What do you need to know about your credit score? Once you've decided to buy a home, or better yet, well-before start thinking about your credit. The earlier you begin monitoring your credit, the more of a positive impact you can make. 1. Not all credit reports are created equal. Not to dissuade anyone from using any of the free credit report services online, but the best way to check your credit is to obtain a credit report from a mortgage professional. Not all reports are the same, and your score may vary among different agencies. The FICO Risk Score is most likely to be used by lenders and has the most strict criteria. Having a mortgage professional run your credit ensures not only that you are looking at the right report, but they can help you interpret the results and identify any quick fixes that may maximize your score. 2. Evaluate (and change) your spending habits. To have a good credit score, you have to take on credit. Notwithstanding delinquencies, the longer you've had credit, and the more credit, the better. A few concrete tips: Don't close out credit cards without a good reason (like avoiding an annual fee) and keep credit card balances at or below 30% of the limit. This might mean spending on less on several cards rather than carrying a large balance on a single card, even if you pay it all off each month. 3. Glitches and Fixes. Reviewing the report also provides an opportunity to correct minor glitches, like a doctor's bill that was eventually paid but was reported to agencies and never remove. Some more major issues may be rehabilitated by engaging a credit repair company, while other major issues (like bankruptcy) may haunt you for up to 10 years. A collection account, even for a very low amount, can reduce your How to maximize your credit score/worthiness? Per our expert, Zack Tolmie, Home Lending Officer at Citi Bank, here are tips on maximizing your credit score. Click here to reach Zack with any questions. The difference between a 699 and a 700 credit score could mean the difference between getting approved or denied for a mortgage, or the difference of .25% on your mortgage rate. On a $500,000 loan, that’s a difference of over $25,000 in thirty years. Credit scores are critical when it comes to qualifying and getting the best interest rate on a mortgage, so if you’re thinking about buying a home in the future, there are things you should be doing now to ensure your score is the best it can be. The first step is obtaining your free credit report at www.annualcreditreport.com. Do not worry about or pay for your credit score because the scores available to consumers are completely different than the scores that lenders look at, so the score you see on a consumer report has no value to you or a bank. You can also ask your mortgage banker to pull your credit report. He can pull your report for free and let you know the exact score that lenders would see. You should go through the information in the report and make sure that it does not include any credit accounts that don’t belong to you (identity theft). If there are, call the credit reporting agencies to report this identity theft and have them remove the fraudulent reporting. Also identify all creditors to whom you owe money. Long-forgotten and outstanding medical bills, parking tickets, or even overdue library late-fees can be sent to collection agencies and reported to your credit report, and can drop your score by upwards of 100 points. Your report will show if the collection account has been paid or not, will tell you which company now owns the debt, and how to contact them. However, once it is on your report, it has done its damage. Paying off the debt will not improve your credit score. What CAN affect the score, though, is if you get it removed. Sometimes, collection agencies will agree to remove the record of your collection if you pay the balance in full (called “pay for delete”). Be sure to get this promise in writing. Whatever you do, DO NOT settle the account for less than is due. This will be an additional tumble to your score. If the company will not remove the record from your report, you may want to contact a credit repair company. These services are expensive, but may be worth it if it can lower your interest rate. Ask your real estate agent or mortgage banker for a recommendation of someone they trust. Once you’ve fixed any past blunders or mistakes, focus on your account balances. Your debt-utilization-ratio is the percentage of how much credit you use compared to how much you have available to you. To maximize your credit score, you should be using 10% or less of your available credit. This means that if you have a $10,000 credit card limit, you should never have a balance of more than $1,000 on your card. If you have some credit cards that you do not use, do not close them. These unused cards will help offset some of your higher utilized credit cards. If you’re worried you are using too much of available balance, asking for an increase to your credit line may increase your credit score in the long run. However, opening new accounts will hurt your score in the short-term. Do not apply for any credit cards, line increases, personal loans, or car loans in the three-month period leading up to a mortgage transaction. Obtaining new debt, and even applying for new debt, will hurt your score temporarily. The credit score algorithm takes into consideration that borrowers will call several banks when shopping for a mortgage rate, so you can feel free to call as many banks as you’d like. However, keep these inquiries to a period of a few weeks. Do not call Bank A in July, Bank B in September, and then Bank C in November. The final determinant of your credit score is the most obvious, and it has a bigger effect on your score than anything else: pay your bills on time. It accounts for 35% of your score. Set-up automatic bill payments online if you’re the type to forget to make payments. Neither the credit reporting model nor banks care that you have a bank account filled with money if you can’t move some of that money once a month to pay your bills. Pay credit card bills once a week if you have to. It will make sure you’re never late, and it will also keep your debt-utilization-ratio low. Credit scores can be confusing, but in the end, they are intuitive. Keep track of your debt. Don’t max out your debt. Don’t apply for too much debt. Pay your debt. Creditors update their reports to credit reporting agencies once a month, so making any of these improvements might only take a few weeks to improve your score. Common Mortgage Misconceptions Debunked by our Mortgage Expert, Zack Tolmie 1) I have a lot of student debt. That means I can't qualify for a mortgage, right? Interestingly, banks aren’t concerned about the amount of debt you have. We care instead about your monthly debt payments. As long as you can afford to make your mortgage payment and your student loan payments, the amount of your student debt shouldn’t impact your ability to qualify. 2) I read that the Fed just raised/lowered rates, this means that mortgage rates are going to go up/down, right? Not necessarily. The Fed forecasts well in advance when they expect to change rates. Banks proactively update their rates based on these forecasts. By the time that the Fed finally makes the change, mortgage rates have already been updated well in advance. During the Fed rate decrease/increase announcement, banks are already thinking ahead to the next anticipated rate change by the Fed. 3) I heard that the housing crash in 2008 was because lots of people did adjustable rate and interest-only loans. These are never a good idea or responsible choice, so I should not consider them, right? An adjustable rate or an interest-only loan might be worth considering if you know you will not own the property for a long time, or if you know that you’ll pay off the mortgage very quickly. These kinds of loans have lower monthly payments for the first 5-10 years. After that, the payments could increase substantially. Prior to 2008, borrowers weren’t always aware that payments could jump. It ended in disaster when homeowner’s couldn’t afford their new payment. If you know you’ll be long gone by the time the payment adjusts, you might want to discuss one of these options. But if you think there is a good chance that you’ll have the mortgage for a long time, a fixed rate is definitely the safest bet. 4) I shouldn't rate shop or consult with multiple lenders (or go to a lender before I'm ready) because when they pull my credit, it will lower my credit score. I work for a bank, and I still called a dozen banks before locking my rate for my mortgage. I wanted the lowest rate possible. Having a mortgage lender check your credit has a negligible effect on your credit score (it’s having multiple banks pull your credit for a credit card application that really hurts your score). If you call several mortgage lenders within a short period of time and have them pull your credit, it will only affect your credit score as if one single lender made a credit inquiry. So, get your rate shopping done in the same calendar month. But don’t avoid shopping for the best rate. 5) Do most loans have a prepayment penalty? What happens if I prepay part of my principal at some point? No, prepayment penalties are incredibly rare. If you make a prepayment (for most loans), your mortgage payment won’t go down. Instead, you’ll pay off the loan faster and shorten the term of the loan. For example, instead of having a payment of $2,000/month for 30 years, you’ll have the same $2,000/month payment for just 20 years. By prepaying, more of your payment each month will be applied toward lowering your principal balance, and less will be spent on interest. You save in time and interest. Some banks give you an additional option to recast your loan. By recasting, your term stays the same, but your payment goes down. So instead of having the payment of $2,000 for 30 years, you’d have a payment of $1,500 for 30 years. In recasting, you save in cash flow and interest. 6) I already identified my property, put in an application, and got a loan commitment. But my commitment says it expires on X date. What happens if I can't close by then? Nothing to stress about here. Your paystubs, bank statements, and credit report have a “shelf life” of about four months. After four months, you’ll need to update your paystubs or bank statements, or have your credit pulled again. Once we’ve updated those items, we can update the commitment letter. Zack Tolmie is a home lending officer at CitiBank, previously vice president of mortgage lending at Guaranteed Rate. Thank you Zack for answering our questions this week! How can I make sure my mortgage is approved? 1. Keep your finances SIMPLE for 2-3 months prior to applying This seems obvious but might be more complicated than you think. When you first apply, the bank will look at you last 2-3 months of statements. Any large withdrawals, deposits, or “interesting” activity is cause for concern on their part – even if you just loaned a friend money, or went on an extravagant vacation. Any unusual spending patterns, no matter how explainable, can complicate the process. Other things, like applying for a new credit card or having your credit run, will affect your credit score for around 6 months. 2. Minimize your liabilities Did you cosign a loan for a friend or relative? Are you still on your old lease a year after moving in with your significant other because it was easier to just let your roommates cousin move in unofficially and sublet your room? Did you apply for a new credit card and buy all your Christmas gifts on Amazon to get frequent flier miles for that awesome trip to Aruba in January, but plan to pay it all off next month? Is your name still on that joint credit account with your sister that your parents set up when you were in college, where she has now racked up to $6,000 of debt? These things may sound trivial, and are not expenses you actually expect to have to pay, but in the calculating eyes of an underwriter, any debts, notes, or accounts you have a legal obligation to, whether or not you are the one paying them in practice, will be considered a liability and can ultimately bring down the size of loan you can qualify for. This includes and leases, loans, credit cards, and any other accounts payable that your name is attached to. 3. Be BORING during underwriting Keep your finances as boring and steady as possible between the time you apply for a mortgage and the time you close on the loan. That sounds simple in theory, but it's sometimes difficult in practice. However, the reason behind it is simple: when you apply for the mortgage, the lender looks at your credit report and your credit score. Then, shortly before closing, the lender will survey your credit again. If there's a substantial change of any kind, the lender might have to delay your mortgage closing. Which brings us to #4… 4. Don’t apply for a new credit card or loan Mortgage lenders always caution mortgage applicants to avoid getting new credit cards or auto loans while home loans are in underwriting. Remember that your credit debt (liabilities), not just your credit score, are used to determine what monthly loan payments you are able to qualify for – the more debt you have, the higher your expected monthly expenses become. Assume that everything you do will be examined up until the minute of underwriting and spend/behave accordingly. 5. Don’t change jobs Getting a new job, or a new position with a different pay structure at your same employer, may jeopardize your mortgage. This is especially the case where your income from salary is decreased, even if you ultimately expect a bigger pay day with commission or bonuses. Finally, a disclaimer: I'm no mortgage expert, but I know a few. An experienced mortgage banker is the best (really, only) person to advise you properly on your specific financing options, and they should be on speed dial as soon as you decide to you want to buy a home. Once they review your mortgage application, run your credit, and verify the information via the underlying financial documents, such as tax returns, paystubs, bank/brokerage/retirement plan statements, canceled rent checks, any other proof of assets or explanation for recent large deposits, they will be able to advise you on how to finance your home. #FAQ #FAQBuyer

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. First, 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. For more information on what a coop is and other financial requirements they might impose, see our earlier post here. 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. A higher downpayment gives the seller more assurance that financing is not going to be an issue, either due to the borrower's qualifications or factors related to the building or specific unit. Thus, especially at lower price points (under $1.5M), we advise our buyers to be prepared to put 20% down, even if the building permits greater financing. Also note that in addition to downpayment, buyers should be prepared to have the liquidity for closing costs. We've outlined these costs here, but note that they are much higher when a buyer is financing a condo than a coop. That said, coops will have reserves requirements, so in either case, a buyer must be in a position to have additional cash beyond the downpayment to complete the purchase. The structure of your offer, not just the number, is important when buying a home in New York City. An experienced and knowledgable buyer's agent will advise you on what range of purchase prices you are most qualified for and how you can structure your offer to be the most competitive. Do I need to be all-cash to be competitive? In the last few years, we've all heard the news: All-cash buyers are flooding the market; unless you can buy outright, stay out of the market. Well, there was some truth to this until recently, but only really if you were looking at properties valued over $2 million. 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. A preapproval letter states that the lender's representative has reviewed the financials of the buyer/borrower, and that the potential borrower has met all conditions for lending up to X amount. In reaching this determination, the potential borrower has to fill out lengthy forms, submit to a credit check, and provide documentation of assets, salary, debts, etc. Gone are the days (at least for now) of the pre-meltdown "no-doc" loans with 2% down. The relationship with the mortgage professional is ongoing. The initial prequalification will state some approved amount. But what if the potential borrower/buyer sees a perfect property and wants to put an offer in that's higher than the initial preapproval amount? Well, based on certain apartment-specific factors (like if there is unusually low monthly maintenance), the pre-approval could be increased, and a subsequent letter issued. Similarly, if the potential borrower/buyer wants to place a bid that is significantly lower than the preapproval amount, a new letter for a lower approval amount might be better for negotiations so as not to tip off the seller that the offer could be increased. I've been using the term mortgage professionals because the relationship could be with a banker, a broker, or a broker/banker. The mortgage professsionals at major banks are mortgage bankers. They will approve the loan based on their bank's criteria and the bank will fund the loan. A broker will preapprove the individual based on their creditworthiness and later find an appropriate lender once a specific property is identified. A broker/banker can do both: They can tap into banks, other lenders, and could even have their own bank fund the loan. Depending on your circumstances, it might be appropriate to work with one of these individuals over the others. 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. Even if a property is truly overpriced, an offer that is perceived as a lowball -- no matter how fair or appropriate under the circumstances -- is unlikely to be the reason why a seller finally comes to their senses. In those cases, it’s usually better to make no offer on the property unless and until there’s a price cut. Of course, your strength as a buyer may have some effect on your ability to negotiate. An all-cash buyer may have a freer hand to make aggressive offers without alienating sellers, particularly in a slower market. Being all-cash is especially advantageous when a property is difficult (or even impossible) to finance -- but then again, most such properties are already priced to reflect these challenges. Generally speaking, the perceived advantages of being all-cash are frequently overblown or exaggerated. For example, in the more common scenario of a financeable property, the main advantage an all-cash buyer has over a financially qualified borrower is an earlier closing date. 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. Sponsors are also unlikely to be personally offended by low offers, compared to a seller who is more emotionally attached to their home they are selling. 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. #FAQ #FAQBuyer