Licensed Real Estate Salesperson
Douglas Elliman Real Estate
774 Broadway NY, NY 10003
As I always try to keep my finger on the pulse of the market, I wanted hone in on various neighborhoods to see how the market was performing across different sectors. So here is a look at contract activity, inventory and market timing (days on market) for Chelsea, Greenwich Village and Flatiron.
Inventory remains very slim across all sectors of these markets. For those buyers looking under $600,000 -- well, you have a bit of waiting for some viable inventory! But for sellers in that particular price range, now is an absolute prime time to list. In comparing all three neighborhoods, Flatiron is certainly lacking the most, while Chelsea seems to have a bit more to choose from, overall. The $2-5M zone is clearly where the greatest inventory abounds at the moment within these neighborhoods. Let's take a look at contract activity from the same time period.
There has been a relatively good deal of contract activity across all sectors. The $1-5M zone has been experiencing the highest levels of activity while the $5-10M+ price points have slowed down quite a bit. (There has been much talk about a softening within the luxury market, and this data certainly points in that direction.) In my opinion, the >$600K sector and the $1-2M remain the biggest hot spots. Slim inventory and a lot of activity. A seller of mine recently experienced a strong offer on his apartment (under $600K). We were on the brink of accepting the offer, and another buyer swooped in and outbid it. Sellers certainly remain in the driver's seat for the time being.
AS OF 12/31/15
Please feel free to get in touch with any questions about the market -- or for any real estate guidance. I'm happy to provide a complimentary assessment of your apartment or assist you with your search.
Licensed Real Estate Salesperson
Douglas Elliman Real Estate
774 Broadway NY, NY 10003
*All data provided by Urban Digs (www.urbandigs.com)
Let's revisit one of my most popular blog posts from the past. I always advise my sellers and buyers to choose their legal representation early on in the process. It's always good to know what to ask a real estate attorney before hiring them.....so take a read!
You have found the perfect apartment, your offer has been accepted and it’s time to provide your attorney’s information. Who should you hire and what should you ask? I spoke with Jerry Feeney, New York City real estate attorney, who focused in on seven questions buyers should consider when choosing their legal representation. Here are his suggestions along with my afterthoughts.
#1) “How many transactions have you successfully closed?” You will want to make sure your attorney has the necessary experience to best represent you. Are they familiar with co-op transactions? Have they dealt with condominium deals? How long have they been practicing? Find out if they have experience with homes (or the building) similar to the one you are purchasing.
#2) “Do you practice in other areas or just real estate?” This is an excellent question. I often work with buyers who consider hiring a friend who is well-versed in a different field of law. This is an absolute ‘no-no’ in my book. A real estate attorney should practice just that – real estate. While they may practice (and have expertise) in other areas of law, simply be sure real estate is at the forefront. There are too many complications that can occur in the transaction process, and you will want to make sure there is an expert on your side. Don’t cut corners with the hiring of your attorney.
#3) “Will I be dealing with you, or do you pass me off to a paralegal?” Communication is key in any relationship. If problems arise or you have questions that need to be answered, find out who your point of communication will be. Paralegals can certainly be wonderful, but you don’t want to be in a situation where you are rarely able to speak with the person you have hired.
#4) “Will you communicate using my preferred method of communication? E.g. if I like to text, will you text back?” Are you someone who prefers a phone call to exchange information? Perhaps email is the easiest way to get to you? Whatever your desire, make sure your attorney is on the same page. It also might help to find out if your calls, texts or emails will be returned within a twenty-four hour period.
#5) “Do you have time to take on this transaction?” A busy attorney can be a good attorney. One who is missing in action, however, is not. Ask what the office’s current workload is and whether they truly have the time to best represent you.
#6) “What is your due diligence program?” Plain and simple, inquire as to how your representation performs a thorough investigation of your purchase --- the building, the financials, the board minutes, the apartment, etc… The due diligence process should take about 1-2 weeks at the most.
#7) “What do you charge if the deal does not close?” Of course, first ask what the attorney’s rate is. Some charge by the hour while others will offer a flat fee for their services. As New York City deals can be quite complicated, prepare yourself by inquiring about what charges you will be responsible for if the transaction falls through. Nobody wants to experience a co-op board turndown or a mortgage denial, but these things do happen so make sure you are a step ahead, just in case.
Aligning yourself with a knowledgeable, trustworthy attorney is an extremely important aspect of purchasing an apartment in New York City. Ask the right questions, be clear about your needs, and if possible, decide on your representation before you place an offer so you’re ready to go when it’s accepted!
Need help with purchasing or selling an apartment? Feel free to shoot me an email with any questions - or call me at 917-929-5545.
In order to purchase a co-op apartment in New York City, you must submit a complete purchase application (otherwise referred to as the “board package”) to the building’s board of directors and hope to be called in for an interview. Depending on the building’s application requirements, this package can include such items as: one to three years of tax returns; one to three months of all bank, brokerage and retirement statements; personal and professional letters of reference; landlord letter of reference; etc…. Remember that the organization and presentation of the purchase application is your chance to make a good first impression.
Here are 5 preparation tips that may help guide you towards getting that interview!
1) Include an “Introduction Letter to the Board”
Start your application off by letting the board know a bit about you. Add a cover letter that expresses your gratitude for the opportunity to purchase in the building. Briefly explain why you love the apartment, the neighborhood and the building, and give the board a short summary on your employment history and financial background. Always compliment the building where you can!
Request a sample “Introduction Letter to the Board”.
2) Create a “Table of Contents” and category dividers
A Table of Contents is always helpful. First, it allows both management and the board to be assured that all of the requested application materials are in the package. It also makes your application much easier to navigate. Go the extra mile and include colored category dividers.
3) TYPE the board package!
Nobody wants to read an application and attempt to decipher illegible handwriting. If you make board members work harder than they need to in figuring out your financial information, well….that’s not a good start. Take the time to type the package in its entirety. Presentation counts!
4) Use current bank statements only.
Save yourself from being asked for more financial materials by including the most recent month’s statements in your board package. If you’re on the cusp of a mere couple days cross over when you submit the application, don’t stress about it. If you are submitting financial documents from 2 months ago – think again. Say your current account balance happens to be higher than what is reflected on your most recent month’s statement; ask a teller at your bank for a reference letter that shows your current totals. Include the bank reference letter WITH the most recent statement so the board can view the larger, up to date balance.
5) Include a resume.
If you are a first-time buyer without long-term employment history, it may help to include a resume with your application. Your resume should hopefully demonstrate a bit of history in your field and show how your career growth thus far. If you don’t have much to include in this regard, it may then be best to leave your resume out.
6) Spend time on your reference letters.
Your reference letters are among the most important documents in the board package. They allow the board to get to know you a bit and how you might fare as a neighbor. Be sure that these letters are addressed properly and contain substantial content – three to four paragraphs is a good gauge. Make sure your references include phone numbers just in case the board chooses to contact them.
Request sample reference letters.
Putting together a board package is no simple feat. Take the time to assemble the required materials and always go back and double check your math! Simple mistakes can cost you an interview……..and thus, a purchase.
Licensed Real Estate SalespersonRutenberg Realty
Brad Malow has over 11 years of experience with successful co-op purchases. Need assistance with your apartment search?
Photo credit: Christian Schnettelker - http://www.manoftaste.de
Affordability - What not to do when buying that dream home. I recently had the privilege of being the guest expert on YahooTV's 'Destination Home'. Lauren Lyster, host of the show, invited me onboard to discuss some of the mistakes people make with home purchases.
It is always important to me to get as much information out to you buyers and sellers as possible. Please make particular note that while discussing debt to income ratios, my figures are simply in alignment with current FHA loan requirements. If you find yourself very close to or on the cusp of these requirements, chances are your are over-leveraging yourself. I always use formulas for NYC co-ops as a prime (stricter) example when it comes to finances: A gross debt to income ratio that does not exceed 25-30%.
Take a read of the entire article pasted below or check out the video HERE.
Buying a house may be the American Dream, but what mistakes do you need to avoid when buying your dream home?
In this episode of Destination Home, Rutenberg Realty agent and founder of BuyingNYC.com Brad Malow details how people can figure out if they can afford their dream home, and he addresses common mistakes homebuyers make in the process.
He says stretching the budget is one of the biggest mistakes homebuyers can make. The financial crisis pretty clearly set the precedent for how well that works out (horribly!).
“If we look at what happened a few years back before the housing market crashed, people were taking short-term mortgages, buying dream homes, and ending up in foreclosure and losing their shirts,” Malow tells Destination Home.
Home affordability is more complicated than most think, and Malow lays out what you need to consider in terms of your income, debt and lifestyle. He encourages people to remember that banks don’t ask how much you shop or vacation when you're applying for a mortgage.
If you’ve crunched the numbers and the affordability of owning versus renting is very close, this might be one instance where Malow would give you the green light to stretch your budget and buy — but only stretch a little. Check out the video to hear his advice.
Another common mistake for those in their 20s and 30s is busting the budget to buy a starter home, thinking you have not yet reached your peak earning potential. According to Malow, do not assume your income will increase in the future. In fact, when calculating affordability you should base your math on your lowest annual salary.
Yet another mistake he sees this demographic of buyers make is pouring money into renovations. Wait, don’t you want to improve your home's value? Maybe not as much as you’d think. Check out the video to find out why and learn when it's a good time to invest in turning your fixer-upper into your dream home.
You hear it all the time during a housing search - 'debt to income ratio'. A bank won't grant you a mortgage unless you fall within specific ratios, and you certainly won't get passed an NYC co-op board if you're wallowing in too much debt. So how do you figure out where you fall.
Take this simple formula to figure out what your current gross debt to income ratio is:
1) What is your gross annual salary?
2) Divide that number by 12. (This will be your monthly gross income.) Remember this number.
3) What are you currently paying in monthly debt? (Credit cards, auto loans, student loans, mortgages, insurance, property taxes, etc...).
4) Take your current monthly debt payments (#3) and divide that number by your current monthly income (#2). This is your current debt to income ratio.
If you're interested in seeing how that debt to income ratio changes after your home purchase, add your projected mortgage and maintenance payments to #3 above and continue on to step #4. This will be your projected debt to income ratio after your transaction.
Lenders will have thresholds that you will not be able to exceed with regards to obtaining a mortgage. Remember that co-ops are stricter than banks here in NYC and that their financial requirements vary from building to building. If a co-op purchase is in your future, be sure to work with an experienced agent who is familiar with those requirements.
Until then, happy hunting --- and keep those debt to income ratios as low as possible!
Image courtesy of FreeDigitalPhotos.net
I hope everyone is having a wonderful summer.....and I hope it gets just a bit cooler soon! Stay tuned for some upcoming blog posts on strategies for selling and buying a co-op. I will also be starting a new series in the upcoming months that will focus on apartment renovations (Yes, I am about to embark on one myself.) I'll document first-hand the best ways to: Choose a contractor, budget for your project, navigate a co-op's alteration agreement process, and more.
For you sellers that are contemplating listing your home, NOW is the time to start planning. Get in touch with a trusted real estate agent, have a comparative market analysis done of your home and spend the next month prepping to 'get in the market'. Take advantage of what might be an extremely busy fall market.
If you're looking to buy, now is a great time to do a rent vs. purchase financial comparison. Take advantage of low mortgage rates, and understand how to navigate a 'multiple offer' market.
Stay cool and know that I am here to be your #1 resource when it comes to all things real estate!
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There have been some recent changes to the condo and co-op tax abatement program. Neil B. Garfinkel, REBNY Residential Counsel Partner-in-charge of real estate and banking practices at Abrams Garfinkel Margolis Bergson, LLP weighs in on the issues below:
1. Question: What is the co-op and condo tax abatement program?
Answer: The NYC co-op and condo tax abatement program (the “Abatement Program”) was enacted in 1996 and provides partial property tax relief to owners of residential condominiums and cooperatives to offset the disparity in property taxation with single-, two- and three-family homeowners. Prior to the Abatement Program, co-op and condo owners were taxed at rates several times greater than the tax rate for one-, two- and three-family homeowners.
2. Question: How has the Abatement Program recently changed?
Answer: The new law, which is retroactively effective for the current 2012/2013 tax year, only allows owners to claim the tax abatement on a primary residence. Apartments held solely in a trust or by an LLC (even if used as a primary residence), or those used as a pied-a-terre, are no longer eligible for the Abatement Program and the abatement will be phased out for such owners. There is currently pending legislation that would allow apartments owned by trusts to be eligible if the trust’s sole beneficiary is the occupant and the apartment is the occupant’s primary residence.
3. Question: How will the new law affect condo owners?
Answer: Condo owners pay their property taxes directly to New York City, so if a condo owner is no longer eligible for the Abatement Program due to the change in the law, the condo owner’s property tax bill will increase.
4. Question: How will the new law affect co-op owners?
Answer: In co-ops, the property taxes are paid by the co-op corporation rather than directly by the individual owners. Co-op corporations receive the money for the abatement due to individual co-op owners as a lump sum from New York State. Instead of distributing the money to the co-op owners, however, co-op corporations frequently issue an assessment which reclaims the abatement money for the co-op corporation’s operating expenses.
If the new law disqualifies a significant number of co-op owners in a co-op building from being eligible for the abatement, co-op corporations may experience a significant drop in income. Also, because the change in law is retroactive, co-op corporations may have to pay more for previous tax periods. To cover the shortfall, there is a chance that such co-op corporations will have to raise more money from co-op owners or lenders.
Important Tip: Consumers who have questions about this should consult their own attorney or accountant. The information above is for general informational purposes only and is not to be construed as the rendering of legal or tax advice. Real estate licensees are not permitted to provide legal or tax advice.
The spring market is in full force and that means moving time for many buyers, sellers, and renters too. So pack up your belongings, get rid of those items you haven’t used for years, and most important, save yourself some backache and hire the right movers! I turned to two industry experts – David Donen from Oz Moving and Dana Bitton from Arthur Werner to provide us with some helpful questions to ask in choosing the right moving company.
#1) “Before hiring a moving company, you should be aware that there are agencies that regulate the moving industry.” says Donen. For local moves, that agency is the Department of Transportation of the particular state where the move is taking place. If your move is crossing state lines, be sure the mover you are using is adhering to the correct regulations required. Thus, Donen suggests asking: “Are you licensed to perform the type of move I require?” Donen notes that you can ask the mover for their DOT number and call the appropriate DOT to make sure it is a registered and insured moving company.
#2) “Am I speaking with the company I will be using or are you a broker aiding in connecting me to movers?” “Due to the internet today,” Bitton explains, “it’s important to ask if the people you are talking to are the actual moving company.” Brokers often handle deals where they hand off the job to another company. Simply be aware and don’t be afraid to ask.
#3) “May I have a couple references?” When asking for references, make sure that it is an objective entity such as the Department of Transportation, Better Business Bureau, Department of Consumer Affairs, etc… Bitton points out to remember that in providing you with other references, most companies will surely provide only happy customers. Feel free to reach out to friends, colleagues and trusted real estate agents for referrals as well.
#4) “What is included in my move?” Get this information before you secure your movers. “Make sure to have it in writing, in clear language, and check for small print!” Great advice from Donen. He also notes that moving companies rarely include full coverage insurance in their quote. “There is basic insurance coverage that is based on the weight of the shipment and covers very little but is required by law, usually any additional insurance will have to be purchased separately.” he says.
#5) “What is the size of your moving company and how many moves do you do annually?” Donen notes that there are positives and negatives to using a larger company but he believes that in most cases, a bigger company is a better choice. “A bigger company will have more experienced movers, a better training program, and sufficient insurance coverage as required by many real estate management companies. Bigger companies will have a claims department in case something goes wrong and will be able to offer additional services in case something arises during the move.”
#6) “How does the insurance of your company work with regards to my personal move?” Bitton says that In most cases, movers will be liable for either $.30 or $.60 cents per pound per article at no additional charge to the cost of your move. “Full replacement protection or depreciation protection will add to the cost of your move. Don’t forget to ask if there is any deductible,” she advises.
Do your homework and choose the moving company that is the best fit for you. Trust me when I tell you that having the ‘right’ company handle your move can alleviate a great deal of stress from the entire process. Good luck and stay tuned for an upcoming related post on “Mistakes People Make in Planning Their Move.” Happy spring……and happy moving!
Switching utility accounts always comes with a lot of questions. Neil B. Garfinkel, REBNY Residential Counsel Partner-in-charge of real estate and banking practices at Abrams Garfinkel Margolis Bergson, LLP, takes on a question below about how switches happen and who is responsible for what payments.
I have been asked by my purchaser of a condominium unit in New York City how to switch the electricity from the seller’s account to their own account? How is this done and is the purchaser responsible for the seller’s unpaid bills?
Once the closing date is established, the purchaser should contact Con Edison to inform them that the account should be switched to the purchaser’s name on the scheduled closing date. Con Edison may ask for documentation which will indicate that there will be a new owner of the unit. The purchaser will establish a new account with Con Edison and a final electric bill will be sent to the seller. The purchaser will not be responsible for the seller’s balance. It is also prudent for the seller to contact Con Edison so as to verify that the account was switched over to the purchaser’s name.
If gas is metered separately in the condominium, then the same procedure will apply for switching gas accounts. Depending on the location of the condominium unit, either Con Edison or National Grid (as the case may be) will need to be notified.
A succinct, clear-cut answer from Neil B. Garfinkel, REBNY Residential Counsel
Partner-in-charge of real estate and banking practices at Abrams Garfinkel Margolis Bergson, LLP.
It seems that real estate attorneys are asking for more and more “due diligence” materials when representing a prospective purchaser of a co-op or condominium apartment. What are the “customary” due diligence materials that an attorney will ask for?
Real estate attorneys conduct a due diligence investigation in order to give prospective purchasers of co-op and condominium apartments a better understanding of the overall condition of the property. This includes, for example, determining what capital projects will be undertaken by the co-op/condominium in the future, when maintenance/common charges will increase, whether there are any anticipated special assessments and if there are any “quality of life” issues in the building.
The customary due diligence materials that a purchaser’s attorney will request include the condominium or co-op’s: (i) board minutes (an attorney will generally schedule an appointment to review the board minutes with the building’s managing agent); (ii) offering plan and all of the amendments to the offering plan; (iii) house rules and bylaws; (iv) a building questionnaire; and (v) the two most recently audited financial statements.
Important Tip: Real estate brokers should anticipate that the purchaser’s attorney will request the above-referenced due diligence items. Accordingly, in order to expedite the transaction, real estate brokers should request the customary due diligence materials from the seller or managing agent as soon as possible.