Q: WHY SHOULD I WORK WITH A BROKER?              

A: FOR THE SAME REASON YOU SHOULD NOT WALK INTO A COURT ROOM WITHOUT AN ATTORNEY

Buying your home will probably end up being your most important financial commitment in your life so you want to make sure you are partnering with a licensed professional you trust and that has the experience & knowledge to help you make the right decision.

The broker will save you time & money narrowing down your best apartments (including some off-market properties if your criteria match) and will provide his objective professional opinion on each property because it is simply impossible to commit on a new home without having an external - rational - point of view.

In other terms, he will help neutralizing that emotional component that comes with a residential purchase and which can potentially lead to making a wrong decision.

He will also negotiate on your behalf to get the best possible terms, will advise on any required paperwork & will assist you in putting together the often overwhelming board package for a smooth board approval.

Moreover, he will be there to answer myriad of questions you will have throughout the whole process. And if needed, he will also refer you to great third party professionals (counsels, mortgage experts, contractors, etc) that you will need to complete the transaction.

Last but not least, he is a resource you can use for free: yes, the commission is entirely covered by the seller.

 

Q: WILL I NOT GET A BETTER DEAL IF I WORK DIRECTLY WITH THE LISTING BROKER?

A: NO, YOU LIKELY WON'T - IN FACT, YOU WANT TO AVOID A DUAL AGENCY SITUATION

Some first time buyers sometimes make the mistake of choosing to work without a buyer broker, hoping this might reduce commission, thus get a better deal from the seller. This is a mistake that can potentially cost you a lot.

In a residential transaction in New York, the seller will pay the same amount of commission from the proceeds of the sale regardless of whether there is one of two brokers involved. So it is really the nature of the offer and how strong it is (buyer brokers will help harnessing buyers' purchasing power) that makes the difference on a deal.

Plus, buyers should never EVER forget that the listing agent is here to represent the best interests of the seller and him / her ONLY. Therefore, in order to reduce the awkwardness as well as the confusion that a dual agency situation will create, buyers will want to work with representation.

And it's free so you really have no downsides here !    


Q: WHAT CAN I AFFORD TO BUY?

A: IT REALLY DEPENDS ON YOUR FINANCIALS

We will introduce you to our preferred mortgage professional who will start the pre-approval process and walk you through the whole process. 

Affordability is determined by the following:

   1. credit history

   2. income & assets

   3. your down payment

   4. interest rates


Q: WHAT ARE THE DIFFERENCES BETWEEN CONDOS & COOPS ?

A: OWNERSHIP STRUCTURE & FLEXIBILITY AND PRICE 

A significant number of people make the mistake of focusing solely on coops - that are typically less expensive than condos - without a good understanding of the differences in each ownership structure. This lack of knowledge could potentially result eventually in financial hardship.

With that said, both forms of ownership provide different costs & advantages to the client, some of which can be found down below.

COOPS: 

- Purchaser owns shares of the corporation that owns the real estate. 

- Shares entitle to a proprietary lease allowing for occupation of the premises.

- Shareholder pays monthly maintenance, of which a portion is deductible.

Advantages:

- Price: because supply represents approximately 70% of the city's inventory, properties are typically 20% - 30% less expensive than for a similar sized condo. 

- Lower closing costs (2% - 4% of purchase price).

- Higher owner-occupancy and greater sense of community in the building. 

Drawbacks:

- Flexibility: absolutely none. Not owning the actual real property makes the shareholder entirely dependent on the board's decisions for selling and buying.

- Renting the property out may in some buildings be allowed but rarely more than twice every five years.

- Definitely not investor friendly.

- Those restrictions make coop ownership an asset class that appreciates less in value than condos over time.

CONDOS: 

- You actually own real estate and are given a deed of the property, just like you would for any house in the suburbs.

- You pay common charges & real estate taxes - for which you receive a separate tax bill from the city.

Advantages:

- Flexibility: no board interview makes it easy to buy, sell and rent to whomever you want want and for as long as it is necessary.

- Investor friendly, much more liquid.

- Tends to appreciate more over time. 

Drawbacks:

- Condos in New York City represent only a fraction of the total inventory (app. 30%) making it more expensive than for a similar sized coop.

- Higher closing costs

- Lower owner-occupancy.

Ideal For:

- Local investors

- Foreign buyers looking for pied-à-terre or investment properties

- Parents purchasing for their children 


Q: WHEN SHOULD I START LOOKING?

A: AS SOON AS YOU ARE PRE-APPROVED (IF YOU ARE USING A MORTGAGE)

We advise against starting your home search before getting a pre-approval because no serious seller will consider a financed offer without a pre-approval letter.

Our mortgage professional will pre-approve you in less than 30min and will gladly answer any questions you have about the process.

We will start the search process right after.


Q: WHAT IS THE POINT OF BUYING WHEN I CAN RENT?

A: BECAUSE IT JUST MAKES SENSE

Several reasons: 

   1. Real estate is a relatively safe asset class - compared to other asset types such as stock markets - which over the years in New York has offered strong returns.  

   2. By paying rent you basically allow your landlord to pay off his mortgage and to accumulate his own wealth at your expense.

   3. By taking into account deductions of interest payments & RE taxes, owing potentially becomes even less expensive than renting. We are happy to walk you through the financial analysis so you see with your own eyes. 

   4. A significant number of stunning new condo developments have recently come to the market and represent great acquisition opportunities. 

   5. Instead of being exposed to and dealing with relentlessly rising rents, you can actually fix payments into the future.  

   6. Because you have always wanted to your own home and now is the time to do it.


Q. WHAT CLOSING COSTS WILL I HAVE TO PAY AT THE CLOSING TABLE

A: BETWEEN 2% AND 5% DEPENDING ON WHAT YOU BUY AND HOW YOU BUY IT

See info below for closing costs breakdown.

It depends on what you buy (condo, coop, new development, resale) how you buy it (financed, all cash).

Your attorney will give you a more accurate estimation but it ranges from 2% to 5% depending on the above parameters.


Q: WHAT KIND OF APARTMENTS DO YOU HAVE ACCESS TO?

A: VIRTUALLY EVERYTHING FOR SALE IN NEW YORK CITY

As a member of the Real Estate Board of New York (REBNY), Prime Realty shares the same pool of listed properties with all other 16,000 REBNY managers & brokers of the New York City real estate community. As such, we have access and work with virtually every condo buildings & new developments, thousands of townhouses, co-ops and condops.

 

OVERVIEW OF THE BUYING PROCESS

 

 

PHASE 2 - STEPS TO CLOSING

1a. Loan Application: buyer works with the mortgage representative (either the banker or the mortgage broker) to submit all required paperwork as fast as possible. Typically buyers have 30 days to obtain loan commitment.

1b. Board Package: buyer works simultaneously with the broker to put together the documents required by the board, as fast as possible. (app. 10-15 days). Board then gives approval within 2-3 weeks. If property is a coop, we then get invited for a board interview.

2. Closing: Once we get the board approval, attorneys schedule closing date, usually within 2 weeks from approval.

Checks & keys are exchanged.

Buyer should expect 60-90 days from the time he/she has an accepted offer until closing, assuming there is financing involved (less time if no financing).

 

 

Congratulations, you have a home!

 

PHASE 1 - STEPS TO CONTRACT

1. Get pre-approved (if financing involved): we introduce clients to mortgage professionals who can give pre-approvals in less than an hour, advise on affordability and address any mortgage related questions.    (app. less than 1 hour)

Then, client discusses with the broker any specifics on budget, neighborhood, size etc.    (15 minutes)

2. Showings: Broker puts together a number of properties fitting the criteria and lines up the showings with the seller’ representatives. Client sees as many apartments as needed. (3 - 6 weeks)

3. Offer: once we find the right property, we negotiate & submit a written offer to purchase. (app. 2-5 days)

4. Contract Negotiation: Once the offer is accepted, a term sheet is circulated (listing terms and contingencies of the transaction) amongst brokers and attorneys. Attorneys take over and negotiate the contract drafted by seller’s attorney. Buyer attorney conducts due diligence on building, reviews board minutes, buildings financials, etc.   (app. 2 weeks) 

5. Deposit: Once all parties agree on contract terms, buyer puts 10% deposit down (which Seller's attorney holds in escrow until closing) and signs contract. 

Once the seller countersigns, congratulations - you are officially in contract !

 

 

 

CLOSING COSTS

 

The below closing costs are only designed to provide general cost estimations in relation with the sale or purchase of a cooperative, condominium. These are estimates ONLY and any potential sellers or buyers MUST consult their real estate attorney for specifics. 

CONDOS 

Purchaser Related

- Attorney: $1,800 - $3,500+ (for units upto $4M)

- Management Application / Processing Fees: $500 - $1,000

- Credit Report: $50 - $100 (per applicant)

- Move-in Deposit: $500 - $1,000

- Mansion Tax: 1% of purchase price if
$1 million and over

Mortgage Related

- Mortgage Application, Credits: $500+

- Appraisal: $300 - $500

- Mortgage Recording Tax:

   1.8% of mortgage amount if $500,000 or less
   1.925% of mortgage amount if over $500,000

- Fee Title Insurance: 0.45%

- Mortgage Title Insurance: 0.13%

- Municipal Search: $300 - $500

If Purchasing Directly From Sponsor (New Construction)

- New York City (NYC) Real Property Transfer Tax:

   1% of purchase price if $500,000 or less;
   1.425% of purchase price if over $500,000

- New York State Transfer Tax: 0.4% of purchase price

- Sponsor's Real Estate Attorney Fees: $1,500 - 4,000

- Reserve Fund Contribution: 2+ months of common charges

 

 

COOPS 

Purchaser Related

- Attorney: $1,800 - $3,500+ (for units upto $4M)

- Management Application Fees: $500 - $1,000

- Credit Report: $50 - $100 (per applicant)

- Move-in Deposit: $500 - $1,000

- Mansion Tax: 1% of purchase price if
$1 million and over

Mortgage Related

- Mortgage Application, Credits: $500 - $1,000+

- Appraisal: $350 - $600

- Recognition Agreement: $150 - $300

- Lien Search Fee: $250 - $500

- UCC-1 Filing: $75

- Misc.: Lead paint disclosure fee, maintenance adjustment, coop charges

 

 

 

FOR ANY QUESTIONS CONTACT US AT:

INFO@PRIMEREALTYNYC.COM