Gea Elika's Blog, page 120

Questions to Ask Building Management before Buying a Condo or Co-op

If you have decided co-op or condo living is for you, New York City, with its plethora, is an excellent choice. However, you need to find out how much you will enjoy living in a particular building. Co-op boards are notoriously strict, but condo associations also have their own house rules.

While it is important to investigate the neighborhood, you should not overlook investigating the building itself since you want to enjoy living there and yield a profit when you sell, particularly given the city’s high prices. Whether you are working alone or with an exclusive buyer’s agent, in order to help you, we compiled a comprehensive list of questions to ask the management company, through the listing agent.

 

Is the balance sheet strong?

You should ask the management company to send you the latest financial statements. Your broker and lawyer should check these, too. While you are perusing the financials, good follow-up questions for the management company is their view on the balance sheet’s strength and whether they believe in holding a reserve. If so, how much do they typically keep in the “rainy day fund”? If it is a small amount, you can expect to pay special assessments when the building needs a major repair.

What is the plan for assessments?

Rather than keep a reserve fund, some boards charge assessments when there are major repairs or planned upgrades. They typically spread the payments over time. But, you obviously need to know if there are ongoing assessments that you will inherit or any planned assessments since this affects your monthly payment.

What are the building’s improvements?

You need to know which improvements the management company oversaw. You should also ask when the work was completed since you could face a large assessment down the road if the updates and repairs were not done recently. Large ticket items are particularly relevant to ask about, including the elevator and roof.

What is the percentage of owners versus renters?

This is generally applicable to potential condo owners since these are easier to rent. A substantial amount of investor-owned apartments rented out is a potential red flag. Investors typically sell before individuals during market corrections. If sold at a discount, this could put pressure on other unit prices since the building’s comps reflect lower prices.

Owners also have a different economic incentive than renters. Therefore, you want to live in a building that has a large portion of unit owners.

How many units are in the building? 

There is no right or wrong answer to this question since it frequently comes down to personal taste. A smaller number of units typically means more privacy. While there is a potential higher cost should the board impose assessments, there is also less competition when you are ready to sell your unit, and many buyers are attracted to smaller, boutique-style buildings. There is a scarcity value attached to it since the city is full of skyscrapers, and, if it is a desirable building, there a greater chance it will outperform a larger one, using history as a guide. If you are an investor that plans on renting out your unit, there is also less competition.

What do the maintenance or common charges cover?

This question may seem unnecessary, but co-op and condo boards use these monthly fees for a wide range of items. Common charges are typically for shared services and amenities. These include management fees and the building’s operating expenses. Sometimes, it includes utilities, and items such as decorations for the common areas, a storage room, and a gym. A co-op’s maintenance fees also cover real estate taxes, insurance, and the building’s mortgage payments. Finding out what is included in your monthly fee helps you make an apples-to-apples comparison between various buildings’ charges. It also prevents misunderstandings once you move in. 

What rate has maintenance/common charges increased?

Although you can afford the monthly payments now, you need to factor in how quickly these have increased. Ask for the figures over the last few years since it will give you a complete picture. If there were any large jumps, you can ask why that is the case.

How restrictive is the board?

Some boards, particularly in a co-op, have very strict rules. House rules govern the residents’ everyday behavior. Since you are going to live there, you need to know if you can live within them.

Is subletting allowed?

This is more applicable to co-ops. Many do not allow subletting, so if you were planning to earn extra income this way, you need to choose a condo building or a co-op with liberal house rules. However, other boards allow subletting, but with restrictions. If this is the case, ask how the long the term you can sublet your apartment, and if the board charges fees for this right.

Have unit buyers had problems obtaining financing?

When you are applying for a mortgage, not only do you have to qualify, but the lender also does due diligence on the building. In essence, you and the building need the bank’s approval. Learning whether people have had more trouble obtaining a mortgage when purchasing a unit than under typical circumstances can tell you a lot of about the building. Lenders are hesitant to extend financing for a variety of reasons, which could make you think twice about making a purchase since they know quite a bit about the building and its history. For instance, if there is a lawsuit pending against the building, lenders are extremely reluctant to extend you a mortgage, unless you are willing to pony up a significant amount of cash. A sponsor owning more than 50% can also cause problems.

Does the building have an ongoing litigation matter?

As mentioned previously, if a building is being sued, it is extremely difficult for you to obtain financing. If the building is suing the developer, obtaining financing is challenging, but still possible, depending on the litigation details. Under these circumstances, you should protect yourself with a mortgage contingency.

Additionally, the answer may also help you understand the board’s quality. For instance, if shareholders or condo owners are suing the building, you can delve deeper into the issues to see if you want to live there. Perhaps contractors are suing the board for non-payment, which could hint at stinginess, greed, or financial trouble. 

What is the elevator situation?

You should find out if the building’s elevators are sufficient to support the number of residents. Not only should there be enough, these should run efficiently. After all, no one wants to wait a long time to get home or go out. You also do not want your guests, particularly the elderly or ill, to have a long delay.

How is the building heated and cooled?

You are trying to find out the building’s system. If there is central air and heat, this could be more expensive and you are reliant on the board to switch over from one to the other. The management company can tell you when this typically occurs. Natural gas is generally cheaper than oil, with the latter’s prices generally more volatile.

How do the amenities work?

Some buildings include a lot of perquisites, such as a gym and a room you can use for parties. Others charge extra for these items. Depending on your usage, you may prefer one over the other.

Is there a weight restriction on pets?

While this is a less obvious question for most people, it is an important question for you to ask prior to submitting an offer. It is not unheard of for boards to only allow small pets in the building. If you have a large pet, such as a dog, or plan on getting one, you do not want to even to progress to the point where you submit a bid.

How do I get deliveries?

It sounds minor, but some buildings only allow drop-offs in the lobby, while others permit the delivery personnel to come to your apartment. You may like the convenience of delivering to your apartment. If you are tired, you may not feel like going downstairs to pick up your pizza. This is weighed against the building’s security needs. This also means fewer people roaming the hallways, and less wear on tear on the common facilities, such as the carpet.

 

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HDFC Affordable housing Co-op’s and How to Get One

Affordable housing in NYC is something everyone wants but few find. It’s especially so for buyers as most of the cities affordable housing options are geared towards renters. However, there are a few options, one of which is HDFC co-ops. These types of co-ops sell for well below the market rate but they’re in short supply and come with some restrictions that make them difficult to pick up. Below is our guide to them, what they are and how you can grab one for yourself.

What is an HDFC co-op?

Housing Fund Development Corporation (HDFC) buildings can be found all across the city. The first of them went up a few decades ago when tenants in buildings with derelict landlords were allowed to form cooperatives and take over their buildings. Prices have steadily risen since those early days, but HDFC’s can be found on the market for a few hundred thousand dollars apiece.

They function much like typical co-ops but have a different financial structure. Through tax breaks and state subsidies they can keep operating, and, hence, maintenance costs at a minimum. These tax breaks mean that they only pay about a third of the taxes they would otherwise.

What’s the catch?

As with most good things, there is a catch. Buyers must meet strict income caps, tied either to their area median income (AMI) or a formula based on the unit’s maintenance fees and utilities. Also, they come with significant flip taxes when you want to sell. The exact amount varies from one building to another but usually hovers around 70/30. Meaning you’ll be forgoing 30% of your profits on a sale. This makes them more geared for families in for the long haul rather than speculators.

The problem facing most buyers is how to come up with the large down payment while still earning less than the buildings income cap. Because of this, HDFC units are favored towards those with low(ish) incomes but significant assets. Those with a trust fund, an inheritance or young buyers whose parents are helping them out will be in the best position to scoop one up.

So how can I buy one?

Co-op boards, in general, are known for being strict on applications, but with HDFC co-ops it’s taken to a new extreme. Because HDFC apartments sell for well below the market rate they attract a lot of interested buyers, many of which fail to meet the financial requirements. You’ll need to meet the usual requirements when putting together your co-op board package such as having references and being financially sound enough to make your monthly maintenance charges.

Make sure you provide all the required information and carefully proofread your board package for any errors before you send it in. Any mistakes or missing information could jeopardize the whole purchase or, at the least, cause significant delays.

If you need financing, some credit unions like the Lower East Side People Federal Credit Union provide packages specifically for HDFC buyers. Keep in mind though that if you do need a mortgage, finding a lender that will approve an HDFC building can be difficult. Should a foreclosure occur, the bank will also be bound by the same resale and income restrictions as the shareholder. Something which is very unappealing to most financers.

At the end of the day, the purchase process for an HDFC co-op apartment is much the same as any co-op purchase, with the addition of extra paperwork and financial requirements. Each building will be different so approach it like you would any co-op purchase.

 

HDFC Co-op Fact Sheet

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Navigating the Current Buyer’s Market in NYC as a Seller

Manhattan apartment sales have seen a dramatic drop in the first quarter of this year, as much as 25% compared with the first quarter last year. The causes being adjustments to the federal tax law, swings in the stock market and a glut of luxury condos that went up last year. All this is leading to more buyers deciding to sit on the sidelines. For seller’s, a price drop of 8% is not something to inspire confidence, which is why they now need to take extra steps if they’re to come out with the best deal possible. Employ these strategies to help you sell your home in the current NYC buyer’s market.

 

 

Find out more about the buyer’s

Knowledge is power and knowing just a little bit about the interested buyers can give you an edge in negotiations. If it’s a first-time buyer, throwing in some extras such as furniture or custom lighting fixtures could help sweeten the deal. Depending on their needs and interests, it may not even be money they’re looking for. If they have children, they may be in a hurry to close before the school session starts, if so offer to get them settled in time.

Get a home inspection done

A home inspection should already be part and parcel of any deal but getting it done before you even list can be a major selling point. If you find any issues have them cleared up, and you’ll have removed a potential roadblock to negotiations and attract buyers who want a smooth sale.

Stage your home

Home staging might seem like an unnecessary risk, but it’s one of the best ways of getting immediate offers. It might even be worth hiring a professional staging company to ensure you get the right look. A good open house gives potential buyers the chance to view your home and get a sense of what living there would be like. Your listing agent will be able to meet buyers directly and answer any questions they might have. When done right, home staging can lead to receiving multiple offers.

Offer to cover the closing costs

Just because it’s a buyer’s market doesn’t mean they hold all the cards. If they don’t have the full amount to cover the costs, offer to pay some of the closing costs. This is better than reducing the price as it gives the buyer a large chunk of money upfront rather than a tiny reduction in mortgage payments over a 30-year period. Also, when setting your price to be very careful about not overpricing, no matter how tempting it may be. Listing a price above its value will only drive buyers towards your competitors. Have your seller’s agent conduct a comparative market analysis to find the right price. The agent should not just use historical comps based on the past 12 months but also factor in real-time current inventory levels, pricing, and trends.

Don’t be too quick to walk away

In a market like this, sellers have to be ready for some tough negotiations. This is where having a competent and experienced seller’s agent by your side can pay off. There will be a lot of back and forth as you move towards signing a purchase contract but don’t allow emotions to cloud your judgment. Stay flexible and only walk away from offers that are insulting. By keeping negotiations open and civil, you have a better chance of securing a deal that leaves both parties satisfied.

The coming months and years will be about price discovery, as sellers look to find the sweet spot to attract the right buyers. With the current housing market in NYC still in a state of flux the recent trends can be expected to continue.

 

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How To Throw A Moving Away Party

Jumping into the next adventure in your life might require you to pick up and move your entire life somewhere else. Moving can be both heart-wrenching and exciting all at once. It’s hard to leave old friends behind sometimes, but on the contrary, it’s exciting to have a fresh start in a new place! But instead of dwelling on the sadness of leaving, instead, you should celebrate with a moving away party! Here are our top tips for throwing an unforgettable moving away party.

 

 

Plan & Organize

First thing’s first: you need to figure out where exactly you’re going to have your going-away bash! If you’ve got a nice backyard and the weather is favorable, holding it at your place might be the way to go. Cheap and easy! Or if you live in a neighborhood and you want to get the whole street involved, you could throw an old school block party. Just be sure to check with your city’s laws and regulations ahead of time to make sure your party doesn’t get interrupted and shut down by the police. 

If you are going to throw your party at a venue other than your own house or apartment, be sure to book it with them well in advance to make sure the date you want is available. You’ll also want to make sure you get in contact with a reliable person from the venue you’re booking with to address any planning issues in a relevant manner during the time leading up to the party.

Invite People

A crucial piece of organizing a party is getting the invites out and letting everyone know about it! To do this effectively and efficiently, you should consider registering your party on an event management platform. Services like these are useful for helping to send out invites, track RSVPs, and give everyone who’s invited a way to find information and updates about the party. Many event management platforms also make it easy to share your party on social media platforms and email as well.

Food, Drinks & Supplies

One of the reasons you want to have a reliable contact with your venue is to help coordinate any food, drinks, and supplies you may need for your party. Get in touch with your party spot and figure out what kind of party accommodations they offer. If they offer, or partner with, a catering service, it might just be easier to book your food and drink arrangements through them. While that very well may be the easiest option, keep in mind that you’re often going to pay for convenience. If you want to organize the catering and supplies yourself, make sure you book your catering orders well in advance. For supplies, you might want to check out your local dollar store where you’ll likely be able to find paper plates, eating utensils, tablecloths, and other cheesy decorations that truly make a party a party!

If you’re having the party at your house or somewhere other than an actual event venue, then you’re going to need to coordinate all the food, drinks, and supplies yourself. Figure out how many people you’re going to be having and then decide if you want to hire a catering service or man the whole food and drink operation yourself. However, a better option might be just asking everyone you invite to bring a dish to pass! And of course, they may be bringing their own assortment of drinks as well!

From keeping track of all your RSVPs to knowing how much food you need to have, there’s certainly a lot of moving parts when it comes to planning a part. Like with anything else that has a lot of moving parts, things are bound to break down every once in a while, so make sure you start planning your party with plenty of lead time! That way when you do run into a party-planning hiccup, you’ll be able to remedy the situation without being under the gun of an imminent deadline!

 

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Can’t Find a Guarantor for Your NYC Rental? Consider these Alternatives

The search for your first apartment to rent in NYC can be a long one, and even if you do find that dream apartment, you’ll still need to prove that you can pay for it. For a lot of young people, especially students burdened with debt, meeting the strict criteria from landlords in NYC is not an easy affair. Most landlords want to see a high credit score or a salary that equals 40-45 times the monthly payment. Something which is beyond the means of many New Yorker’s, both newbies and natives alike. A co-signer usually steps in during these situations, but that presents another set of difficulties and won’t be a viable option for everyone.

 

What is a Co-signer?

A co-signer, or guarantor, is someone who co-signs your lease and agrees to pay the rent if you can’t. The typical requirements for a co-signer is a credit score of at least 700 or, if you don’t have that, an annual income of 90 times the monthly rent and, more often than not, residence in the tri-state area.

Most people first look to family to serve as guarantors, but if they don’t meet the criteria, this can be a serious roadblock. Fortunately, there are some ways around this.

Alternative 1: Offer extra cash up front

With some landlords, you can get around the requirements by offering more money upfront. Depending on how much security the landlord requires you may want to put up a year’s worth of rent. Other landlords may prefer a large security deposit rather than paying many months in advance. When it’s time to renew, and you’ve been a responsible tenant you may be able to negotiate a “burndown” on the deposit where you would get a month or two back.

Alternative 2: Hire a guarantor

This is a common route for foreign buyers with no U.S credit history. A company like Insurent can do this for you. More often than not the guarantor needs to be in-state which is what makes this option so useful. For U.S citizens with credit history, the rates are usually 75-80% of a month’s rent. For foreign renters with no credit history, it can be 100-110%. For students with debt, you may pay more than 85%. However, if you have a steady job with a large company, you may pay less.

Alternative 3: Sublet or become a roomie

If you can’t meet the requirements or offer any extra cash upfront, you can always opt for a sublet. No one likes to stay in a place where their name is not on the lease but considering you can avoid the financial requirements this way it may be your only option. It’s very easy to find sublets these days through sites like Lease break and Flip. You can also find a roomie through sites such as Symbi and Diggz.

Alternative 4: Build your credit

Even with these workarounds, it’s good to take time to improve your credit score so you can avoid this problem in the future. With better credit comes better interest rates and more secure financing the next time you need a loan.

Start by getting a secured credit card or installment plan. With a secured credit card, you will typically make a cash deposit to the credit card issuer to serve as collateral. Your credit limit is either equal to or a percentage of your deposit. Keep your credit card balance as low as possible, say, 30% or less. Don’t close old accounts that are no longer in use as your credit history is essential in determining your credit score. When possible, pay more than the minimum monthly payment on the rent. Paying just the minimum amount each month can be a red flag to lenders and damage your credit score.

 

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Home Buyer’s Beware: Saying something positive could be used against you.

Our Principal Broker Gea Elika was interviewed by Sharon Crowley for Fox 5 NY on a great piece about ‘Spying’ on potential home buyers. Home Buyer’s Beware: Saying something positive could be used against you. The interview held at the divine 84 Bedford Street, Apt 2S a One Bedroom (Conv 2) One Bath to be priced at $1,735,000 by Carlton Residential. Interior design provided by Interior Marketing Group.  To inquire about Apt 2S before it is listed on market contact Katia at kk@carltonresidential.com.

 

 

COMING SOON FOR SALE

84 Bedford Street, Apt 2S

1 Bed (Conv2) / 1 Bath

Price: $1,735,000

Contact: Carlton Residential

 

Exclusive convertible corner 2 Bed / 1 Bath Condo in a masterfully restored historic 1780’s landmark building, converted into a condominium in 2011. 84 Bedford is located on one most divine tree-lined cobblestone blocks in the heart of West Village.

This elegant apartment approx. 696 sq ft currently laid out as a one bedroom with an en-suite study offers you triple South-East-Western exposures with an abundance of natural sunlight.

Upon entering this delightful residence, you are greeted with a sun-drenched open living and dining room with three wooden double-pained Marvin windows, deep double-doored coat closet, newly refinished solid whitewashed American walnut floors, video intercom, independently controlled central heating and AC and gas burning fireplace. This gracious area is ideal for entertaining or simply enjoying the authentic luxurious west village lifestyle.

The open kitchen is beautifully appointed with a seamless countertop, up-to ceiling light grey Fieldstone custom cabinets finished with a pearl-tinted varnish and smart storage space, Liebherr refrigerator, Bosch microwave and dishwasher, stainless steel sink with garbage disposal and Bertazzoni 5 burner gas range.

Down the hall is the spa-like Master Bath accentuated with a full-size window, ocean travertine stone and glass tiles, soaking Kohler bathtub with glass enclosure, Cifial solid brass hardware in polished chrome and Duravit fixtures.

The oversized Master Bedroom greets you with beautifully refinished walnut floors, two windows, an oversized deep double-doored closest and a large walk-in closet. A separate study room with its own full-size window complements the Master Bedroom and can easily be converted into a second bedroom as shown on the Alternative Floor Plan.

Superbly staged by IMG and turn-key ready, this property presents an opportunity to purchase any or all furniture for a turnkey solution.

 

 

84 Bedford is a boutique luxury Condominium with only 9 apartments and also includes a furnished roof terrace with BBQ and stunning Village and city views. The building is located 4 short blocks from Hudson river park perfect for those that enjoy the great outdoors and minutes from the top restaurants featuring Saint Ambroeus, The Spotted Pig, Barbutto, Chumley’s, Little Owl, Takashi, Sushi Nakazawa, Blue Hill, Minetta Tavern and also Smalls Jazz Club.

 

 

Whitney Museum, Rubin Museum of Art, NYU, Parsons School of Design are in a close proximity.

Laundry and Dry cleaning is around the block and two parking garages are 3 blocks away. Drug stores, Gourmet Garage and Gristedes, Soul Cycle and Equinox, Magnolia Bakery, Big Gay Ice Cream, Starbucks are minutes away from the Condo.

Quick and easy commute with major subway lines 1, A, C, E, B, D, F, M within a short walk.

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Should You Buy a Home Before Paying off Your Student Debts? Here’s what to Consider

So you’re out of college and now embarking on the next phase of life. If you’re like most young Americans, you’ve probably got more than a bit of student debt. You might now be thinking of buying your first home in NYC but are also concerned about those debts. Should you pay off those debts first before purchasing a home? The answer, as with most financial questions is that it depends. Each situation is different and to help you decide here’s what you need to consider.

 

Image byAshland CTC (Flickr)

 

Red Light: When you should wait

If you check most of these boxes, it’s probably better to wait.

1. Your debt-to-income ratio is too high

To qualify for a mortgage, a lender will review what percentage of your monthly income is devoted to debt payments. This is done by adding all your monthly payments (student loans, car loans, credit cards, etc.) and dividing that by your monthly income. This is called your debt-to-income ratio (DIR). If it’s 36% or higher, you should probably put off that home purchase until you’ve paid off more of your debts.

2. You can’t cover the 20% down payment

For purchasing a home in NYC, it’s recommended that you have at least 20% of the homes purchase price for the down payment. Depending on where in New York you want to settle for the average down payment will vary. If you can’t cover the 20% down payment using this calculator to factor in variables such as interest rates, maintenance costs, inflations rates, etc. if the price differential between the cost of homeownership and renting is better then it’s a good reason to buy with a down payment of less than 20%.

3. You’re not sure where you want to be in 10 years

With renting comes flexibility if you don’t see yourself as changing careers or moving to other cities in a few years, it makes little sense to buy a home now. However, if you are committed to staying several years or more, then you can gain much more from buying, even with student debt.

4. Green Light: When you should buy

If you passed the above, you should be good to go but first make sure you have the following.

5. You have an emergency fund

Homeownership comes with some risks which can’t be predicted. Unforeseen maintenance, an economic downturn or illness can destroy your ability to keep up with payments. Aim to have an emergency fund set aside for at least 3 to 6 months to cover expenses should anything unforeseen emergencies strike.

6. You could get more for your money

Besides building equity, owning a home can get you more for your money than renting. For instance, in Manhattan’s East Village this is the case within four years. But just a few blocks away in SoHo it would take 31 years before buying would make financial sense.

6. You have a low-interest student loan

Compared to other types of debt, student loans are usually the least harmful. The interest rates tend to be lower and allow for an extended repayment period. Meaning you won’t risk losing any personal collateral if you need to stop paying for a while.

Summary

As seen, having student debts doesn’t necessarily put the brakes on buying a home. Each person situation differs so make your decision based on your long-term goals and finances.

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Buyer’s Agent: Duties and Responsibilities

The last few years have seen big changes in the real estate industry. Thanks to the internet and new technologies buyers have unprecedented access to listings and real estate information. This raises the question, are buyer’s agents still necessary? The short answer is yes and here’s why.

 

 

They can guide you through the home buying process

All the information available on the internet might make it seem like buying a home is relatively straightforward but that’s rarely the case. The home buying process can be complex with many pitfalls. An experienced buyer’s agent knows all the ins and out of the industry and will be there to guide you through the whole process.

They’ll be able to take a look at your finances, understand what your needs are and set a realistic budget and goals. If you’re in need of pre-approval for a mortgage, they can refer you to plenty of efficient mortgage bankers. They’ll also help you with filling out your REBNY Financial Statement which you’ll need for making offers. If you’re buying a co-op or condo they’ll help you with putting together a Board Application Package that will give you the best chance of success. In short, buyer’s agents make the whole purchase process a lot less confusing and frustrating.

They can find the right listings and help with viewing properties

The online market might make it look easier to search for a home on your own, but few have the time to search properly. An experienced agent knows how to search and can devote themselves to it fulltime. They also have preferred access to other listings such as off-market properties and New Developments off the plan with schedule A pricing which you may not. An experienced buyer’s agent also peels back the noise and knows how to differentiate between a great property and a lemon.

When you attend open houses, you can leave your agents contact details on the sign in sheet, so you aren’t pestered by follow up calls and promotional emails from listing agents. If you come across a property you like but isn’t doing an open house you can have your agent call and schedule a personal viewing. Seller’s tend to take such requests more seriously if it comes from a buyer’s agent as it shows you’re serious about buying.

They can help overcome setbacks

If a home inspection or appraisal report brings attention to some issues your buyer’s agent can help you proceed. Negotiations in these moments can become quite heated. It’s much better knowing you have an experienced professional by your side that knows how to handle these moments.

They can help with bidding strategy and negotiations

Possibly the most useful duty of a buyer’s agent is their ability to estimate fair value and gather information on a listing to help you plan a bidding strategy. Knowing about the seller’s background, their expectations and previous offers give you a big advantage when it comes to offering the right price.

Once you have an offer accepted the agent can then handle negotiations with the listing agent as they iron out the specifics of the deal. Remember, NYC is largely a seller’s market. Submitting a signed purchase offer does not make an offer legally binding, at least not until the seller has counter-signed. There will probably be other offers with the seller free to choose the best one. Your agent will ensure you remain on the seller’s radar to give your offer the best chance of being accepted.

Buyer’s agents may not be the keyholders they once were but when it comes to understanding the market, evaluating properties and handling all the paperwork and usual setbacks they can still prove invaluable.

 

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Duties and Responsibilities of a Buyer’s Agent

The last few years have seen big changes in the real estate industry. Thanks to the internet and new technologies buyers have unprecedented access to listings and real estate information. This raises the question, are buyer’s agents still necessary? The short answer is yes and here’s why.

 

They can guide you through the home buying process

All the information available on the internet might make it seem like buying a home is relatively straightforward but that’s rarely the case. The home buying process can be complex with many pitfalls. An experienced buyer’s agent knows all the ins and out of the industry and will be there to guide you through the whole process.

They’ll be able to take a look at your finances, understand what your needs are and set a realistic budget and goals. If you’re in need of pre-approval for a mortgage, they can refer you to plenty of efficient mortgage bankers. They’ll also help you with filling out your REBNY Financial Statement which you’ll need for making offers. If you’re buying a co-op or condo they’ll help you with putting together a Board Application Package that will give you the best chance of success. In short, buyer’s agents make the whole purchase process a lot less confusing and frustrating.

They can find the right listings and help with viewing properties

The online market might make it look easier to search for a home on your own, but few have the time to search properly. An experienced agent knows how to search and can devote themselves to it fulltime. They also have preferred access to other listings such as off-market properties and New Developments off the plan with schedule A pricing which you may not. An experienced buyer’s agent also peels back the noise and knows how to differentiate between a great property and a lemon.

When you attend open houses, you can leave your agents contact details on the sign in sheet, so you aren’t pestered by follow up calls and promotional emails from listing agents. If you come across a property you like but isn’t doing an open house you can have your agent call and schedule a personal viewing. Seller’s tend to take such requests more seriously if it comes from a buyer’s agent as it shows you’re serious about buying.

They can help overcome setbacks

If a home inspection or appraisal report brings attention to some issues your buyer’s agent can help you proceed. Negotiations in these moments can become quite heated. It’s much better knowing you have an experienced professional by your side that knows how to handle these moments.

They can help with bidding strategy and negotiations

Possibly the most useful duty of a buyer’s agent is their ability to estimate fair value and gather information on a listing to help you plan a bidding strategy. Knowing about the seller’s background, their expectations and previous offers give you a big advantage when it comes to offering the right price.

Once you have an offer accepted the agent can then handle negotiations with the listing agent as they iron out the specifics of the deal. Remember, NYC is largely a seller’s market. Submitting a signed purchase offer does not make an offer legally binding, at least not until the seller has counter-signed. There will probably be other offers with the seller free to choose the best one. Your agent will ensure you remain on the seller’s radar to give your offer the best chance of being accepted.

Buyer’s agents may not be the keyholders they once were but when it comes to understanding the market, evaluating properties and handling all the paperwork and usual setbacks they can still prove invaluable.

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Negotiating Issues After A Home Inspection

We highly recommend a home inspection. There are various ways you can hire a highly qualified inspector, including through your exclusive buyer’s agent and finding one from the American Society of Home Inspectors. However, once you receive the report, the ball is in your court. There are various actions you can take, and we discuss your options.

 

 

Major problems

If your inspector uncovers major issues, such as faulty wiring, plumbing, HVAC, you have a few choices at your disposal. You have the same options when minor issues crop up, but the expense is a lot lower and presents fewer problems. You can walk away without a penalty since, in New York, you complete an inspection either before making your offer or not long after its acceptance. Either way, you do not have a signed contract, meaning you do not forfeit your deposit. If the needed work is extensive and the seller refuses to pony up enough funds to satisfy you, this might be your best option.

The second option is to allow the seller to either make the repairs or take money off the purchase price. Many people opt for this, and it is a good option, with a couple of caveats. First, make sure that there are no other problems that haven’t been uncovered. Second, you need to have a good estimate. Otherwise, you are not negotiating with the full amount of information. You may wish to bring in a contractor to make sure you receive satisfactory answers to these questions.

The third option is to eat the entire repair cost yourself. If you bought the property for an attractive price, you might decide it is worth it to pay the extra expense. Perhaps the seller knew there were problems and factored it into the price, particularly if it is an “as is” sale.

Lastly, you could agree to some combination of the second and third options. The seller may agree to take some money off the price, and you are responsible for the balance of the repair cost. As with the other options, the negotiation is conducted through your exclusive buyer’s agent and the seller’s agent.

Special issues

Condos and co-ops present unique circumstances. Dealing with a condo inspection is the more straightforward situation. Remember, you own the space inside the condo walls, and are responsible for this area. Therefore, if your home inspection brings up anything inside the unit, you negotiate with the sellers.

Co-ops are more confusing. You own shares in a corporation and live in one of the units. You pay monthly maintenance fees, which covers repairs for your unit and common areas. However, this does not mean you are in the clear and do not have to worry about an inspection. Major repairs to the common areas, such as the lobby, elevator, or roof, either get paid from the reserve fund or a special assessment. You want to have those areas inspected. You should also have the same inspection done inside the apartment as you would if it were a private home or condo. However, you may have to negotiate with the board over the repair cost.

New buildings

We also advise getting an inspection of a newly constructed building. Just because it is recently built does not mean there are no problems. Shoddy materials or poor installation could still present issues. In this case, you negotiate with the developers if issues arise, or you can simply walk away

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