Gea Elika's Blog, page 160

10 Questions for Your Mortgage Broker and or Lender

Most buyers prequalify with their chosen lender before making an offer on a property. Once your offer is accepted and the contract is signed, it’s time to complete your mortgage application package and choose the right home financing product. These questions will help you make an informed decision about your mortgage.

1. What mortgage products do you offer? Since the real estate crisis, most lenders offer three main types of mortgages: Fixed rate mortgages of 15, 20, and 30-year terms, adjustable-rate mortgages, or ARMs, where the interest rate fluctuates over the life of the loan or hybrids that combine a period of fixed rate mortgage, typically from three to ten years, with the remaining years at an adjustable rate.

2. Which mortgage product do you recommend for me? Ask your lender to discuss the advantages and disadvantages of available mortgage loans.

 

                                                                             Image by Pictures of Money / Flickr

 

3. Are rates, terms, fees, and closing costs negotiable? Can I use discount points to buy down my interest rate? A point costs 1% of the mortgage amount, paid upfront, in exchange for a reduction of the interest rate over the life of the loan. In some cases, buying down your interest rate can save tens of thousands of dollars over the life of your loan.

4. What is your policy regarding private mortgage insurance (PMI), and how much does it cost? PMI is usually required if your mortgage amount is more than 80% of the value of the home. Most lenders will let you drop PMI once you’ve built up enough equity, but be sure to ask your lender’s policy.

5. Will you service the mortgage yourself, or is it contracted out to a third party?

6. What are the escrow requirements for my loan? Most lenders pay your property taxes and homeowner’s insurance premiums using money collected each month in addition to the principal and interest payments and held in an escrow account until the tax and insurance payments are due.

7. How long is the lock-in period? Will my rate go down if interest rates drop during that time? During the lock-in period, the lender will honor the quoted interest rate even if rates go up.

8. How much is the penalty if I should need to extend the rate lock?

9. Do you charge a penalty if I prepay the loan? If you plan to sell your home in three or four years, it’s important to understand the lender’s prepayment policy.

10. How long will the loan process take? What is your average time to close a loan?

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How to find the ideal neighborhood

Your dream home may turn into a nightmare if it’s in the wrong neighborhood. Begin by thinking about the activities that are most important in your daily life: place of worship, clubs, yoga class, the theater, favorite shops, and markets, for example. As you look at various neighborhoods, consider how a move would affect your participation in the activities you enjoy the most.

If you have — or plan to have — children, you should look carefully at the local school district. The website InsideSchools.org offers a comprehensive and independent look at city schools. Even if you don’t use the local public school, choosing a home in a good school district may improve your home’s value if you decide to sell at a later date. If your children are enrolled in a private school, consider how your move will impact their daily commute.

 

Photo by Al Diggidi / Flickr

 

Talk to your buyer’s agent about average home prices,  vacant properties, the average length of time properties remain on the market, and whether price trends are increasing and declining in the neighborhoods, you are considering. This will help you identify desirable locations that will enhance and protect your home investment.

Research crime statistics in neighborhoods you like. Look at both the number and type of crimes that are reported, and whether the numbers are increasing or decreasing. Try to determine if crimes are clustered in a specific area, such as a retail outlet.

Stop by the local city economic development office and get statistics on average income and property values for your desired neighborhoods, and if they have increased or decreased over time. Find out how many properties are owner-occupied versus rental units. As a general rule, areas with a higher ratio of owner-occupied homes will have higher property values.

 

Photo by Marcia O’Connor / Flickr

 

Once you’ve selected a few neighborhoods, plan a visit to walk—not drive—around. Are the homes well maintained? Are the streets clean and quiet? Consider striking up a conversation with a potential neighbor working or playing outside, and ask her how she likes the neighborhood.

Try to visit the property at night and take a walk to a nearby restaurant and back again, as if you were living in the home.

In many cases, the ideal neighborhood will just “feel” right when you visit, and having all the relevant statistics and information will support your decision.

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The Worst Renovations to do Before you Sell

Last week we talked about easy and cost effective ways to add value to your apartment before you sell. So I thought it’d be worthwhile covering off a few of things that are almost never worth changing before you go to market.

1. Switching your sink and your toilet

Bathrooms are great spaces to maximise your renovations dollars before you sell. However, tread carefully! Some changes can lead to big renovation bills that are impossible to recoup when you sell.

Switching your sink and toilet is a prime example.

For small bathrooms, this can seem like a great idea. However, did you know that this relatively minor change can quickly top $10,000? It’s a surprisingly complicated task, and while it might make you like your apartment more, it’s unlikely to make your apartment worth more. When you’re spending in the bathroom (and you should be) focus on simple, aesthetic changes like fresh paint, re-grouted or caulked tiles, and a new sink.

2. Granite counter tops

Granite is undeniably a fantastic material for kitchen counter – heat proof, rugged, hardwearing. However, it’s a polarising material regarding aesthetics, and it’s costly to put in and take out. If you’re replacing your cabinets and counters, I recommend a lighter, more neutral material that will lighten the space and be a blank canvas for the lucky new owners.

 

Image source: Flickr/Jer Thorp

 

3. Paint in non-neutral tones or dark colours

You might love that pop of yellow – but not everyone will. Stick to soft whites and other light, neutral colours that people can easily adapt to suit them or paint over themselves.

4. Artisanal building materials

It might be cool to you to know that your backsplash tiles came from a small tile manufacturer in the foothills of the Dolomites, but 9/10 people are not going to care. Stick with quality, no-nonsense materials – you’ll almost never get a return on investment for something fancier.

5. Designer lighting fixtures

Good lighting is essential to putting your house in well, in a good light. However, be wary of assigning too much value to a light fixture. It’s easy to blow through your renovation budget on fancy lights when a staging company can rent you standing lights to achieve a similar effect. Updating your lighting is a good idea – just tread cautiously!

 

Image source: Unsplash/ Patrick Tomasso

 

6. Ripping out your tub

Ripping out and replacing your tub is usually something that owners ‘always wanted to do’. Right before you sell is not the time to be indulging. Sure, there’s value in a beautiful new tub that costs $1,200. But before you commit, look into the cost of refinishing your existing tub. A refinish can do wonders to spruce up a bathroom.

7. Built in home entertainment systems

There is almost no way that these will pay off. First, they only appeal to some people. Second, of those people who these would be a selling point for, some of them are likely to have already audio solutions that they like (and might be better than yours) and can bring with them. Lastly, these add no function. A nicer kitchen adds value because it’s a more useful space – new appliances don’t break, new counters are easier to clean. Home buyers know this. Built-in speakers don’t do anything that normal speaker don’t do, and most people have speakers.

8. Office remodelling

Built in bookcases, desks, specific lighting fixtures, surge protected sockets – you can drop a lot of cash on turning a room into a home office. The thing is, these benefits are going to be lost on a lot of potential buyers. Some don’t want an office at all and would rather it be another bedroom or living space. Plus, those who do want to work at home are usually just as happy with a comfy wheelie chair and a decent desk – two items they probably already have. Leave your office aspirations for your new place.

9. Removing a bedroom

Regardless of how nice you think your new bachelor pad is going to be, it’s rarely worthwhile removing a bedroom for additional living space or to give your place an open, lofty feel. The market is just bigger for two and even three bedroom apartments, so by knocking out walls, you’re knocking a big chunk of buyers out of the running. With less demand, you get less generous offers and thus, you end up selling for less money and getting a lower ROI. Even an exceptional one bedroom is just not going to be as valuable as a two bedroom.

10. Replacing old carpet

If you’re going to put any money into your floors, carpet is not the way to go. Even new carpet dates quickly and doesn’t add much (if any) resale value. Hardwood appeals to a broad range of potential buyers and can be a real selling point (especially for smaller apartments, where it tends to make a space feel bigger). So if you’re going down the floor route, go with hardwood.

Wrap up

Renovations are prone to spinning out of control, and before you sell you need to be more diligent than ever to make sure you get a return on investment. Needlessly high-end materials, obscure improvements that only appeal to a small subgroup of buyers, and improvements that people simply won’t see are all renovations to avoid.

Focus on high-value, low-cost renovations that improve the aesthetics of an apartment and before you know it you’ll have a line out the door.

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How Much Home is Too Much?

Everyone dreams of their perfect home with expansive space, perfect upgrades, and stellar styling. But, most times, the ideal home of your dreams with everything you’ve ever wanted will also come with a hefty price tag. Use the guidelines below to ensure you eyes are not bigger than your wallet when it comes to your house hunt.

Is there enough space for you to grow into?

One of the most important factors when searching for a new home is finding a space you can grow into. It should be comfortable in size for your current lifestyle, but also be able to adapt and function for any changes that occur over the next several years. Consider how your life may change in the future – maybe you will get married or have children, or maybe you would like to renovate the space eventually. Make sure to take into consideration how you can change and grow within your new space so that it will suit both your current and future wants and desires while still falling within your budget.

 

by homestello / Flickr

 

How much will you put towards the down payment?

Experts recommend putting at least 20 percent down for the down payment on your new home. Doing this prevents the buyer from needing private mortgage insurance and will result in only paying the monthly payment instead of additional fees. If you don’t have the 20 percent saved up, there are alternate options to consider, but ensure you are not purchasing outside of your price range.

Are you spending more than 25-30 percent of your income on the mortgage?

Financial experts recommend not spending more than 30 percent of your taxed income on your housing, whether it is rent or a mortgage. Spending more puts you in jeopardy of financial strain on things like other bills, food allowances, and extra spending money.

 

by Dee / Flickr

Are there additional housing fees like maintenance fees, a homeowners association or utilities?

Make sure you have considered all of the costs associated with your new home. Often, buying a home comes with unforeseen expenses. For example, monthly taxes, interest on the mortgage and homeowner’s insurance are all additional costs on top of the mortgage itself. Factor them into your monthly budget to make sure there are no surprise costs and that you are comfortable with the new total for all of your payments and expenses.

Will the cost of the home limit your lifestyle?

No one likes to give up any of his or her guilty pleasures and conveniences. Even with a new mortgage payment, ensure you can maintain your current lifestyle without causing overspending unless you are willing to sacrifice certain indulgences. If you are willing to give up things like dining out or regular shopping, you can contribute more to your mortgage. But if not, ensure your payment and additional costs will be affordable your current income.

Whatever size home you decide on, you will be able to make space your own with personal touches and added flair. With these tips and strategies, strike the perfect balance between your wish list and your budget—ensure that every home on your list is well within your price range to maintain your current lifestyle while still finding the perfect new home for you and your family to grow into.

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The impact of the presidential election on the housing market

The 2016 presidential election is coming to a close, with less than three weeks to go. While the latest polls show Hillary Clinton has opened up a large lead, it is worthwhile to examine the economic proposals of each candidate in order to determine the impact on the housing market.

Hillary Clinton’s proposals

In keeping with her reputation as a policy wonk, Secretary Clinton has outlined her proposals on various economic issues, such as taxes, jobs, and housing. Her previous record in the Senate also provides some insight into her priorities.

Her policies are designed to stimulate economic growth in a budget neutral manner. In general, she is calling for higher taxes on high earners, while cutting taxes on small businesses. Clinton also supports a plan to invest in infrastructure, manufacturing, research and technology, clean energy, and small businesses. The Democratic nominee is also proposing students from families making below a certain level having the opportunity to go to a four-year public college or university tuition-free.

 

 

On the housing front, she is calling for expanding the supply of affordable rental housing units, and removing barriers to obtain home ownership (including matching a $10,000 down payment for working families, updating underwriting tools, and clarifying rules for lending requirements).

Overall, we think her policies support a moderate pace of economic growth, which should be beneficial for the overall economy and the housing market. Although she will not support the laissez faire policies espoused by previous Republican administrations, she will likely be a voice of moderation, advocating a degree of regulation in order to have a level playing field and keep the economy functioning. Back in May, during the primaries, a panel of more than 100 housing experts put together by Zillow stated they believed a Clinton Administration would have a positive impact on housing prices

Donald Trump’s positions

It is more difficult to ascertain which policies a Trump presidency would pursue, given his penchant for making outlandish and inconsistent statements, along with his lack of political experience. These would be negative for the economy and stock market, given the uncertainty surrounding his presidency. Ultimately, this likely translates into a weaker housing market. A weaker stock market has a direct impact on the New York City housing market given it is a major money center.

The policies he has laid out are vague, lacking many specifics. He is calling for efforts to boost the GDP growth to 3.5%, and possibly 4%. This is well above the current rate, which was under 2% in the second quarter of 2016. He has called for reducing marginal tax rates, and reducing the tax brackets to three, down from seven. The top tax rate would be 33% compared to over 39%. The same economists mentioned previously believe a Trump presidency would hurt home prices.

His tax plan could provide a short-term economic boost due to the expansionary tax cuts. However, experts, including the non-partisan Congressional Budget Office (CBO), believe this would cause the deficit to soar. This could cause interest rates to increase down the road, raising mortgage rates, which would suppress housing demand, and ultimately prices.

Conclusion

The election season naturally breeds uncertainty, and this is a more unusual one than in recent memory. While we will have a new president next year, the fate of Congress, and whether control will switch parties to the Democrats, is up in the air. With all of the unknowns, any policies currently discussed in their campaigns should be taken with a grain of salt. It is a long road from discussing a policy as a candidate to the passage of a law.

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10 Signs You’re Ready to Buy a Home

Think you’re ready to quit the rental market and get on the property ladder? Here are ten signs to make sure.

1. You’ve got a good debt to income ratio

This is how much money you pay in monthly debt divided by your gross monthly income. It’s a measure of how healthy you are financially and is usually the indicator banks use to decide how much (and at what rate) to lend you money.  If your debt to income ratio is too high, you’re unlikely to get the loan you want. Better to wait and get your debt under control before you move to buy.

2. You’ve evaluated and understood the New York City housing market

There’s constant demand for apartments in NYC, but even within this market, there are peaks and troughs. If you know the occupancy rate, the average price per neighbourhood, and the three-year market trend of the top of your head, it might be time to get off the fence and into an apartment of your own.

 

Image source: Unsplash/Dorothee Hübner

3. You’re in love with a neighbourhood (possibly your own)

If you’re absolutely in love with the neighbourhood and you spend all your time there, you might be ready to buy. Buying is a huge commitment both emotionally and financially so you need to be sure you love where you’re going to be living.

4. You know the NYC property tax code by heart

Taxes are a huge part of buying property and are usually the thing that will tip browsers to buyers. If you know the property code for condos, co-ops, and apartments and know the tax map like you know subway lines, you either need to go into tax law or purchase an apartment.

5. You’ve been at your job for a while

And you’re pretty sure it’s not going anywhere.  If you’re looking at taking on the level of debt needed to buy an apartment, you should be relatively stable in your job and your industry to avoid a financial disaster down the line.

6. You hate your rental

Kitchens that don’t quite work, showers that don’t have any pressure, old paint – if these things about your rental niggle away at you, you might want to take a look at your finances and see if buying is in the cards. Sure, there will be problems with your new place – but when it’s your own, you’re in a much stronger position to fix them.

7. You know what you can afford – and you’re ok with that

Controlling expectations is the first step towards actual apartment ownership. There’s no sense in thinking that you want to buy an apartment, but only if you can buy a beautiful penthouse loft in Tribeca, that’s three times what you can afford. If you’ve taken a hard look at your finances and are ok with what the numbers are telling you, it’s a good sign to start seriously looking at property.

8. Your industry is stable

This is a hard one to evaluate since there’s always a risk of disruptive technology closing a whole industry. But in general, does your industry provide a service that is hard or impossible for someone/something else to do? Second, does your industry feel like it’s in a bubble? Are companies like yours vastly over-valued? If so, it might pay to hold off until you’re more stable position.

9. You have the money for a down payment

A down payment is usually 10-20% of the value of your loan. What’s more, a larger down payment will make your bid more competitive (especially relevant for co-ops). If you have or are planning on having that money available, then you might be ready to buy.

 

Image source: StockSnap/ Oliver Klein

10. You constantly browse for property online

Do you constantly look for property online, ‘just to see what’s out there?’ Then yes, it’s time to make a move.

Buying property is a huge step – both financially and emotionally. But if most of these describe you, it might be time to get out of your rental and take the plunge.

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Tracing buying real estate for the past 100 years in New York City

With the current state of real estate in New York and the potential growing bubble on Wall Street, more and more people are looking to diversify investments into real estate and particularly in New York City.

Let us look at the history of New York real estate prices for the past 100 years:

1910’s  – The surge in demand for housing, World War I
 – Sale: $8 PPSF, Rent: $40/Mo.

1920’s – The “Roaring Twenties” 
- Sale: $15 PPSF, Rent: $60/Mo.

1930’s – The 1929 Stock Market Crash and “The Great Depression”
 – Sale: $5 PPSF, Rent: $45/Mo.

1940’s – World War II
 – Sale: $8 PPSF, Rent: $50/Mo.

1950’s – The post-World War II Housing Boom 
- Sale: $12 PPSF, Rent: $60/Mo.

1960’s – First condo building, World’s Fair, Building Boom 
- Sale: $25 PPSF, Rent: $200/Mo.

1970’s – World Trade Center Completed, Near Bankruptcy, Finishes Stronger 
- Sale: $45 PPSF, Rent: $335/Mo.

1980’s – Co-op Conversion Boom, “Black Monday” Stock Market Crash 
- Sale: $250 PPSF, Rent: $1,700/Mo.

1990’s – From Recession to Lofts and the “Silicon Alley” Dot-Com Boom 
- Sale: $590 PPSF, Rent: $3,200/Mo.

2000’s – 9/11 to Housing Boom to Lehman
 – Sale: $1,200 PPSF, Rent: $3,800/Mo.

2010’s – Quick Rebound, Tax Credit and Housing Seasons 
- Sale: $1,070 PPSF, Rent: $3,500/Mo.


(source: New York Times & Jonathan Miller)

This clearly shows that for the past 100 years, real estate prices have continued to rise and have actually appreciated by almost 1,000 times with every decade. The prices doubled from the 50’s to the 60’s and almost doubled from the 60’s to the 70’s. Once New York City came out of bankruptcy in the late 70’s, international buyers started to take notice of the New York real estate. Prices went up almost 6 times in the 80’s and more than double again in the 90’s. The average price for sale now in 2016 is $1,470 PPSF while average rent in Manhattan today is $4,374.

 

by Bernd Thaller / Flickr

 

There are many reasons to be optimistic about the future of New York real estate: the local economy and its diverse industries that employ New Yorker’s and attract new highly skilled professionals from around the country as well as internationally. In addition, the city’s myriad of cultural activities, universities, restaurants, museums, theater, among many others, create a very special and unique lifestyle. New York today is truly a cultural capital of the world that is up and running 24/7.

It fits well with today’s millennials, generation X and baby boomers who are moving back to the city from their “empty nests” in suburbia. New York’s rich history, location, political stability lifestyle and its industries attract investors and foreign buyers alike. Never in the city’s history has it experienced such a great inflow of foreign capital and an interest of foreign nationals to live in New York City either full or part time.

 

by Marcela / Flickr

 

The U.S. Census Bureau has estimated New York City’s population at 8,550,405 as of July 2015. This represented an increase of 375,300 residents (or 4.6 percent) from April 2010. The population will grow to 9 million by 2020.

Housing remains and will continue to remain in great demand for many years to come. The notion that the prices are too high does not take into consideration global demand, the population as well as income growth in New York City.

By Marcela / Flickr

The local economy no longer solely depends on the economic conditions of New York City, New York State or the United States. Today’s New York industries cater to the world. Finance, entertainment, law, shipping, and technology are just a few of the major contributors to the world economies.

As the saying goes: “Just buy it and forget it.” You won’t be disappointed.New York City’s population

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How to Avoid Home Buyer’s Remorse in NYC

As someone who searched for more than one year before I purchased my Upper West Side apartment, I can relate to the overwhelming and tedious process of finding the right home to buy in New York City. I have lived in my apartment for more than seven years, and I have experienced no buyer’s remorse, but others aren’t so lucky.

Buying real estate in New York is unlike buying real estate in other cities. Yes, the market moves at the speed of light. But the minutia of co-op vs. condo, Manhattan vs. Brooklyn, not to mention the feat of choosing a neighborhood that’s best suited to an individual lifestyle, can be paralyzing. The last thing any homeowner wants to experience is buyer’s remorse. Heed this tips before you make any offers, so in the end, you’re happy with your new home in NYC.

 

By Jurgen Leckie on Flickr

Educate yourself about the market.

Before you’re ready to buy, do your homework. Look at various neighborhoods, and try to get an idea of where you’d like to live. Narrow down the section of town, and, if possible, to less than three or four neighborhoods. New York is a huge city, and you will run yourself ragged trying to explore all of Manhattan and Brooklyn. If you didn’t already know, you’ll quickly learn which areas of town would be within your budget. Once you’ve established that budget range and figured out the areas of the city you prefer, you have done the hardest part of the legwork. Now, move on to the hunt.

Find a buyer’s agent you trust.

Don’t attempt to tackle the search yourself. Find an experienced and recommended licensed buyer’s agent to work with you. Interview multiple agents until you find “the one.” The right broker will be knowledgeable, patient, and guide you through the process, as well as advise you on which property is the best investment and appropriately priced as compared to others on the market.

 

by Jurgen Leckie on Flickr

 

Don’t make a snap decision.

Give yourself enough time to look at apartments. Ten might be not enough, and 100 might be too many, but the number is different for each buyer. Make your wishlist and search until you find a home that meets 80 percent of the what’s on your list. You won’t find a single property that has everything you desire, so you will have to compromise. Don’t rush your decision –– you don’t want to have regrets.

 

by Wicker Paradise on Flickr

Don’t buy too much.

Spending more than your original budget might encourage remorse later on. Yes, you’ll be able to get that chef’s kitchen if you spend $200K more, or a better view of the park for the apartment on a higher floor (also higher maintenance charges) but, you might not sleep at night because you’ll be stressing over making that monthly payment. Buying the right home is key, and will lower any anxiety that could creep up on you after the closing. Plus, buying within your budget will ensure that you won’t have to sell before you’re ready. Don’t bite off more than you can chew, but rather, what you can afford.

Be in it for the long haul.

You’ll want to commit to living in your New York home for a minimum of seven years. Yes, seven years may sound like a long time, but in the real estate world, it can often take that long or longer to turn a profit. Selling a property in less than two years from the purchase date could subject you to a capital gains tax. Staying in your home will provide a sense of security and ensure that you’ll make a good profit when you eventually sell.

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How to add value to your apartment before selling

Everyone selling a New York City apartment wants to get the best deal possible. The hard part is figuring out what renovations are going to appeal to a broad range of buyers with minimal investment on your part.

Here are my top 8 tricks to boost your apartment value without breaking the bank.

1. New hardwood floors

If you’ve got carpet with hardwood underneath it, rip up that old stuff and refinish the hidden glory. Hardwood floors look amazing, especially when they’re new. Carpet might be more useful on those cold winter mornings, but your target audience is house hunting with their shoes firmly on.

 

Source: Flickr / Vassilis

 

If you’re laying down new hardwood floors, I’d suggest you spend for the real stuff. Intimidation wood never looks as good and can cheapen the whole apartment (and we’re going for chic, not cheap.)

2. Replace your old fridge with stainless steel

Stainless steel screams new. It looks great, usually has good energy ratings, and is a relatively small investment for you; you can get a new fridge/freezer and a range/oven for under a thousand if you shop around a little. It will make your kitchen look far more sleek and modern, and is an easy way to tip a maybe into a yes.

3. Replace kitchen counters and cabinets

 

Source: Flickr / Ashley

 

New kitchen cabinets and counters can totally change a space, not to mention getting rid of all that everyday wear and tear. Go for a quality, neutral material (e.g. not granite) that’s easy to match to. Remember: your taste is not necessarily the taste of your buyers, so something versatile is essential.

4. Repaint

If these walls could talk… they’d say please paint us!

Repainting (especially is you do it yourself) is the single most cost effective way to brighten up your space.

First, new paint is a bit like new car smell – your walls lose their ‘fresh’ look pretty fast. So if you’ve lived in your apartment for any length of time, it’ll likely pay off.

Second, you can use paint to portray your apartment as a blank canvas for new owners. They’ll see a new space, full of possibility – ready for them to make their own mark in.

5. Talk to an interior designer

A quick one or two hour consultation with an expert for how to style your house can do wonders. It’ll help you position your own stuff just so as well as identify weak areas you can tidy up quickly (and cheaply). Plus, it’s always good to get a third party with a bit of distance to check out the place before you get potential buyers in (e.g., does that nude of your Great Aunt Myrtle really need to be on display?)

6. Tidy up your bathroom

We’re not talking a full retrofitting, but a new sink, recaulking and a paint job do wonders to freshen the whole place.

7. Upgrade your doors

Doors often get neglected but they’re critical to setting the tone of your apartment to potential buyers (the front door in particular). Either refurbishing the ones you have (for example, getting repainted or re-dipped if they’re natural wood) or getting new ones will lift the entire feel of your place.

8. Remodel your storage spaces

 

Source: Pexels / Daian Gan

 

This is another area where a chat with a professional might come in handy. Getting a custom closet solution or expanding any storage space you have is an inexpensive way to build value.

From the second buyers walk into an apartment, they’re already thinking about what a space is going to look like with their stuff. The easier you make it to build that vision, (e.g. look at these amazing shoe cubbies! That’s where I’ll keep my off-season footwear!) the more likely you are to get the offer you want.

Wrap up

Renovations before a sale are always a delicate balancing act of investment and return. The key is to identify areas that are important to buyers, and pick things that you can do to inexpensively improve those rooms. Kitchens and bathrooms are ripe for improvement, and no matter what choose you do stick to quality materials and simple colour schemes.  With those guiding principles you can’t go wrong.

Remember – your buyers already want to buy your place – all you’re doing is helping them see it in the best possible way.

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New York City Co-Ops – Everything You Need to Know

New York City co-ops are unique hybrids that combine features of both public and private ownership. Living in a co-op presents many distinct challenges. When you’re looking into New York City co-ops, it’s important to consider how life here will differ from what you’re used to.

As we’ve already mentioned, co-op owners are not permitted to sell their units without board approval and paying a flip tax, so you cannot flip a co-op property the way you could a house or condo. There are restrictions on subletting or altering the unit as well. Co-op residents may face very strict rules governing the appearance of the building, such as limits on the percentage of the unit that is carpeted.

New York City co-ops are controlled by a board of directors. The board determines how shares are sold and who can buy them. Co-op boards enjoy sweeping authority to accept or reject applicants, and can turn down individuals for anything other than sexual, religious, or racial discrimination. Rejections are often baffling, as the board isn’t required to provide a reason if they turn you down.

Co-op boards also have broad control of the running of the building. Their decisions are nearly impossible to overturn, so long as they can argue that they’re operating in the building’s best interest.

 

by Wally Gobetz on Flickr

 

What You Need to Get Into a Co-Op

You must supply detailed personal and financial information to get approval from the co-op’s board of directors. Applicants must fill out a “board package” that includes two years of tax returns with W-2 forms, 1099s, and K-1 forms delineating all partnership income. You must also provide a detailed financial statement and list of your assets.

If you have any investments, the co-op board will need documentation for each one. For example, you would need to provide a market analysis and copy of the lease for any rental property you own. A comprehensive board package will also include a commitment from a lender for any proposed financing. An accountant or financial expert can help you assemble this part of your package.

In addition to your financial information, your board package usually will require a minimum of three letters of personal reference. After submitting your completed package, you must submit to an interview with the co-op board’s selection committee. Families are often asked to bring children along so the board can meet all the prospective residents. These interviews can include both personal and financial questions.

While sales of New York City co-ops slowed during the collapse of subprime loans and the global financial crisis they have since roared back, many co-op boards have become increasingly stringent with their financial requirements for prospective owners. Experts believe this is because boards would rather protect their current residents than make potentially risky real estate sales.

 

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The Advantages and Disadvantages of Owning a Co-op

Though the application process is rigorous, there are many advantages to owning a co-op. Co-op boards are very strict about choosing buyers who will be considerate neighbors and take care of their maintenance issues promptly. This creates a high-quality living environment for everyone in the building.

Unfortunately, the same rules that keep your neighbors in line can feel very controlling if you want to make certain cosmetic changes to your living space. If you bristle at the idea of having restrictions on your paint colors or balcony decorations, co-op living may not be for you.

Disagreements between co-op neighbors typically center on the spending of monies and what decorations are allowed. Experts say there’s usually a division between owners who want to keep costs down and those who are willing to pay more to ensure quality.

The laws that govern co-op issues are always evolving. Most recently, courts have ruled that a co-op board’s decision cannot be questioned in court, that it does not have to provide a reason for turning down prospective owners, and that it can evict disruptive neighbors. Co-op boards may also enforce “flip taxes” on the sale of a unit if permitted by the co-op’s bylaws.

Since the end of 2009, the co-op market in Manhattan has rebounded from the sluggish economy of 2007 and 2008. In the second quarter of 2014, Manhattan co-ops saw average price gains (17%) and increases in the average price per square foot (16%). The average price per square foot rose to $1,019 — for the first time surpassing $1,000 per square foot. The quarter median price also rose 8% over the previous year.

 

Related Post: The NYC Co-op Board Interview: Expect These Questions

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