Gea Elika's Blog, page 97

Understanding the Foreclosure Process

Conceptually, the foreclosure process is easy to understand. However, in practice, it is anything but simple. Buyers need to know there are pitfalls to purchasing a home in foreclosure. With the housing market slowing and concerns the economy will follow, it is useful for not only for potential buyers but also existing homeowners to understand how and why a bank forecloses on a home.

A foreclosure

Many people think the bank owns the home until you pay off the mortgage, or refinance, which pays off the existing loan with a new one, possibly passing it along to a new lender. Actually, the bank merely holds the deed to the house as collateral to secure the loan.

When a buyer falls behind on his or her mortgage payments, the bank will send notices. Eventually, it starts the foreclosure process.

New York

Each municipality has its own laws and ways to deal with a foreclosure. New York State’s Department of Financial Services (DFS) lays out a general timeline. Once you miss your payment, the lender quickly sends out a late charge notice. After one to two months, the bank may send you pre-foreclosure notice. The law states it must do so within 90 days of starting the foreclosure. During this period of time, you have the opportunity to work with the lender to find alternative solutions. The notice has to state how much you need to pay in order to bring your loan up to date and provide a minimum of five non-profit housing counseling agencies.

Within that 90 day time frame, the lender will send you a letter stating you are in breach of the loan’s terms and provide you 30 days to repay what you owe along with any late charges and penalties.  

After 90 days, the lender can bring legal action. This involves a lot of steps, including filing a formal notice of foreclosure with the court and serving you notice. The buyer has to respond. Otherwise, the court can automatically rule against you and order a foreclosure sale. Within 60 days, there is a court-mandated settlement conference. 

The process is not quick, which is part of the reason why lenders do not like foreclosing on a home. Assuming the foreclosure proceeds, the court proceeding can take many months, and after a court rules against the buyers, a sale can take several more months. 

In New York, foreclosure sales are conducted via public auction where the court sells it to the highest bidder. 

Can you get a bargain?

A homeowner in distress may look to sell quickly. If the loan balance is below the home’s equity, he or she may provide a discount in order to raise the funds quickly and pay off the loan. This is not the typical scenario, however. 

Alternatively, the owners may have worked out a deal with the lenders under a short sale arrangement. You could obtain a good deal under these circumstances, but it typically takes a long time to complete the transaction. You are negotiating with the sellers and lenders.

Since banks do not want to own real estate, you might obtain a bargain on foreclosed or even pre-foreclosed homes. However, it is important to keep in mind that you are competing with savvy investors. You might also find the home is not in great shape and you have to incur significant construction costs. 

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What to look for When Choosing an Architect

Whether you’re a new homeowner or have already been settled in for a while nothing is more exciting than putting your home through a renovation. If you really want to change things up in your NYC home and make it something unique to your tastes and style, then hiring an architect should be first on the agenda. These professionals will take your project ideas from inspiration to the drawing board and beyond. They’ll be able to create a design specially tailored to your needs and help foresee all obstacles along the way. Your chosen architect will be someone you’ll be working very closely with for many months, so it’s vital that you hire someone you can trust. So how do you choose one that will match both your vision and budget? Here’s what to look for when choosing an architect for your NYC home.

Finding an Architect

Every architect has their own style, approach to design and methods of work. When choosing an architect, it’s important that you find one who understands your needs. If there’s a design in your community that you liked, find out who the architect was. Get recommendations from family, friends, and acquaintances who have worked with architects. Once you have some names, check to see if they’re a member of the American Institute of Architects (AIA). Being a member of the AIA means they adhere to a professional code of ethics and have a range of professional and technical resources to call on.

Call each firm to request details and describe your project to see if they would be willing to take it on. Try to narrow your list down to three or four architects which you will interview. Below are the main qualities you should be looking for.

Likeability and easy to communicate with

The right architect should be willing to listen to you and translate those words into the design. This will be a very close working relationship so it’s important that you can get along well together. You may like a person’s design style but if their attitude doesn’t gel with yours then miscommunication and conflict could be inevitable. Right from the start, they should remain your direct contact throughout the whole process. A direct relationship will be vital in ensuring consistency in communications. When discussing your needs, it’s great to have an architect that can suggest other ideas you might not have thought of. But don’t let them get carried away and lose sight of those elements that are important to you.

Can manage budgets

Extensive renovations can be costly. As such, it’s important that your architect can manage your budget and clearly explain how any variables will affect design and cost. It’s almost a guarantee that you’ll go over budget, so you’ll need some flexibility in your budget and timeline. The key thing is that your architect can explain any variables early on, so you know what to expect. It’s important that right from the start you set a limit and to be sure your architect can work within these constraints.

They’re a team player

Designing a home is a team endeavor between you, the architect and other professionals that will have to be brought on over time. It’s important that your architect is a team player who can coordinate everyone and foster a cooperative atmosphere. Working through a creative challenge can be satisfying and exciting but it will also mean a lot of work. You should be able to discuss any concerns you have with the architect. They shouldn’t be allowed to control the project to the point where the home is no longer yours. But you also don’t want to restrict them so much that creativity suffers.

Have a good reputation

As with hiring any professional, their reputation will count for a lot. Ask for references not just from previous clients but also builders, interior designers and other professionals they’ve worked with. From these references, you should be able to judge their competency for the job. You can also look into their past projects and personal history. This will give you an idea of who you’ll be working with.

The architect will be providing you with a professional service, not a product. Unlike buying a car or new appliance you won’t be able to see the final product and test it out. Knowing the right architect to hire really comes down to finding someone you trust, and feel is right for the job. Different projects require different skills so make sure you know what you’re looking for before you start looking.

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Best Indoor Plants to Purify the Air In Your Apartment

You might not think it, but your home could have very poor air quality. Air pollution from the outside world often seeps into your home, and when allowed to build up it can become a severe health risk. This can lead to a variety of health problems such as asthma, cancer, and even heart disease. But thankfully there is an easy way to mitigate these risks, and it’s all thanks to NASA. Back in 1989, they did a study on how to improve the air quality in their space shuttles. They found that some houseplants each had a unique was of naturally cleansing the air from toxins. Bringing potted plants into a living space to liven it up is a trick that’s often used by interior designers. Now you have a health motivation for doing it as well. 

How Do Indoor Plants Clean the Air?

So how does it work? Plants absorb air-polluting organic and inorganic chemicals and break them down into compounds that the plant can use for energy. Microorganisms that are present in the soil are also responsible for much of the cleaning effect.  All that’s needed on our part is to make sure the plants receive enough water and sunlight for survival. Just imagine the cost of some of those fancy air filtration systems out there. It’s a bit surprising that more of us don’t just purchase some plants instead. So if you’d like to cleanse your air, bring some beauty to your home and improve your mental well-being, here are some plants you should start looking for.

Peace Lily

These plants are known for their beauty and are easy to take care of. They require very little water to stay healthy which is a great thing for those who lack a green thumb. The research by NASA found that Peace Lillie’s are the most effective at removing airborne compounds such as formaldehyde, trichloroethylene, and benzene. Place them in a shaded area as direct sunlight can turn the leaves brown. They only require watering once a week, but you should regularly spray the leaves with water vapor to keep it in top health. Their only downside is that if ingested they can be toxic to humans and pets. This is something consider if you have children.

Snake plant

Snake plant or mother-in-law’s tongue (really, could they have thought of a better nickname?) is a prevalent houseplant that can be used outdoors in areas without direct sunlight. It was found to be one of the best at absorbing formaldehyde, nitrogen oxide, benzene, xylene, and trichloroethylene. For best health keep it in bright light and be and careful not to overwater it. If ingested it can also be toxic so keep it away from children and animals.

Gerbera Daisy

Gorgeous Gerbera daisies not only cheer up your home but do it some good too. Gerbera daisies are rare plants in that they also release oxygen during the night, so keep them in the bedroom for restful sleep. They need sun and water as soon as the dirt in the pot dries out, so they require a bit of maintenance. Gerbera daisies rid the air of benzene, formaldehyde, and trichloroethylene.

Bamboo palm

 

The bamboo palm is another popular purifying houseplant due to its tropical look and insect-repelling quality. Known also as the “reed palm,” Bamboo Palms prefer bright indirect light and a temperature of 60-70 F. they tend to lose some of their foliage as they adapt to indoor conditions, but this is normal. Remove the dead fronds but don’t pinch out the tip of new stalks because this will slow or eliminate new growth. This plant also packs a big punch when it comes to purifying the air. The bamboo palm can remove substances like benzene, formaldehyde, chloroform, carbon monoxide, and xylene.

Aloe Vera

These plants are great for being easy to take care of and providing a handy remedy for a wound or burn-healing emergencies. The gel within each leaf contains a mixture of amino acids, vitamins, and enzymes with anti-bacterial, anti-inflammatory and soothing benefits. It loves being in the sun so keep it by the window. They’re great for purifying the air of formaldehyde and benzene that is found in varnishes, floor finishes, and detergents.

Weeping Fig

Not only will you love the sweet and plentiful fruit yielded from a healthy ficus benjamina (or weeping fig) the plant needs infrequent watering and indirect sunlight. For someone that doesn’t have the time for heavy caring, this is perfect. Bring it inside during the colder months to decrease pollutants like formaldehyde, xylene, and toluene. Move it outside in the warmer months where it will thrive and grow to heights of up to 6-feet. Keep it somewhere that’s bright with indirect sunlight. The soil should be thoroughly dry before you water it otherwise the roots could rot. It can be highly toxic if ingested and produce symptoms such as vomiting, salivation, and oral irritation. Seek help from a veterinarian immediately if your pet happens to take a bite.

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Co-op Sellers: Choose a Buyer that your Board will Approve

The process for selling residential real estate in NYC doesn’t differ much from one building type to another. Except if the property is in a co-op building. After the contract of sale is agreed to, due diligence conducted, and the mortgage is approved, there remains the co-op board interview. One of the most vexing things about NYC real estate is that co-op boards can reject a buyer for any reason or no reason at all. For sellers, this can present a lot of uncertainty in what sort of buyer they should choose. Get it wrong, and you’ll have lost the deal, valuable time and have to start the process all over again. This is why it’s so important to recognize a qualified buyer when you see one. Follow these steps to ensure you choose the right one.

Talk to your co-op board

You may not personally know the board president or other board members, but that doesn’t matter. As a shareholder and member of the cooperative, you are entitled to communicate with the board members. Before finding a real estate broker or even listing your property for sale talk to members of the board and let them know you are planning to sell. Try to get a list of potential interview questions they would ask any applicant. Once you’ve found an interested buyer have them go over these questions to see if there could be any problems. Also, ask the board about any upcoming assessments or house rule changes that you might not be aware of. While co-op boards are mostly concerned with the financial statement of any potential buyer, you should ask them about any major red flags.

Go over their letters of recommendation

Letters of recommendation are part and parcel of the co-op application process. These are how any potential buyers ‘ sell’ themselves to the co-op board. Many co-ops require five reference letters per applicant so for a couple that makes ten. The buyer’s broker will be responsible for ensuring that each of these is perfect regarding spelling, punctuation, and grammar. But it’s the seller’s broker that is responsible for choosing only the best candidates that meet the financial criteria. Financials are important in determining the worth of a recommendation letter but also how the candidate is presented. Letters from people with prestigious titles and long years of friendship with the candidate will measure the highest. What the board is looking for is credibility and trust.

Ask for the board application early

While talking to your board, request a copy of the purchase application package. Go over this extensively with your broker before you list the property. In its first few pages, it lays out all requirements for application and approval. It will mention the building’s house rules, flip taxes, buildings fees and application fees. If it’s not clear whether a fee applies to the buyer or seller then now is the time to find out. Having a full understanding of the board’s requirements will help you to weed out those buyers that don’t match it and find those that will.

Ask about their occupation

These days many people work from home and depending on the job this could be a red flag for some boards. By the city’s zoning codes some professions are forbidden from operating out of residential buildings such as barbershops, beauty salons, pharmacies or insurance companies. When talking with your board ask them what occupations are a red flag. For instance. If someone is a freelancer, then what kind of financial criteria do they need to have to be considered? Some occupations will be preferred. For example, potential applicants who are away often on business trips are generally preferred — the idea being that a resident who’s not there often causes less noise and traffic in the building.

Check their overall appearance

In most cases, the seller will have to trust the opinion of their listing broker for this one. Usually, the seller won’t meet the buyer until the closing day. Candidates who don’t dress appropriately for the board interview could cause an issue. This can be something as simple as dressing too casual for the Upper East Side or too showy for certain Brooklyn neighborhoods. If they have a specific health issue that affects their appearance, then make sure the board knows this ahead of time.

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How to Donate and Volunteer in NYC this Holiday Season

The holiday season is upon us once again. It’s a time for families and friends to enjoy delicious meals, exchange gifts and celebrate another year gone by. The coming month is sure to be a busy one for everyone. But in your haste to get everything organized, try not to overlook another important part of the holidays. For the less fortunate this can be a difficult time. If you love your neighborhood and can spare a little time, why not work to make it a better place for everyone. This can also be an ideal time to teach children what the true spirit of the season is about. Here we’ve collected some great ways you can help others through the holiday season.

Donate

New York Cares coat drive – No one likes to go without a coat over winter and for the homeless, this is an especially hard time. Do you have an old, gently used coat that you no longer need? New York Cares organizes a collection to distribute coats among the five boroughs. Just take any coats you can spare to any of their drop-off locations. If you haven’t got a coat you can still help by texting COAT to 41444 to make a $20 donation. Enough, the organization says, to purchase one coat.
Operation Santa – Launching this year on December 3rd, Operation Santa has for a long time allowed people to play St. Nick by fulfilling the wishes of needy children. In previous years the program worked by going directly to the James A. Farley Post Office at 421 Eighth Avenue at 32nd There you would choose a “Dear Santa” letter, shop for the gift, and return to the post office with the wrapped gifts and pay the postage so it gets mailed to the author. The program is supported by Be an Elf, a nonprofit Christmas children’s charity.
The Robin Hood Foundation – Robin Hood prides itself on being the largest poverty-fighting organization in New York. All donations go to fund its different programs. These include job training, early childhood education and providing meals to those in need.

Volunteer

Citymeals on Wheels – One of the best-known organizations which for 35 years has been providing meals to the elderly and housebound. As a volunteer, you’ll not only be providing meals but also companionship. They also run other programs throughout the year such as writing letters and spending time with seniors.
The Grand Central Food Program – Sponsored by the Coalition for the Homeless, the Grand Central Food Program started out in 1985 after a homeless woman had died of starvation in Grand Central Terminal. It’s now the largest mobile soup kitchen in New York. What makes it different from other soup kitchens is that it brings the goods directly to those in need. They run throughout the year and encourage people to commit beyond the holiday season.
The Actors Theater Workshop Holiday Program – Every year since 1995, the Actors Theater Workshop has been providing the cities homeless children with a unique and life-changing experience through their 12-week theater and education program. This year they’re looking for volunteers for December 11th and 12th to help over 100 children living in temporary housing. Volunteers can help with decorating the theater, cooking up a holiday feat and looking after the children.
The Bowery Mission – Since 1879, the Bowery Mission has worked tirelessly to bring food, shelter and medical care to the city’s homeless, hungry and poor. Although best known for supporting the Lower East Side, they now reach other communities such as Harlem and the South Bronx. They’re always looking for help throughout the year and will accept whatever you can give. Be it your time as a volunteer, a cash donation or work as a fundraiser.

There are dozens of other helpful organizations throughout the city. This is where NYC Service really comes in handy. Through it, you can narrow your search by zip code to find those in need right in your neighborhood. Also, don’t complain about the dearth of mom-and-pop shops in NYC if you don’t shop at the ones that remain. Support your local independent business and help your neighbors through the holiday season.

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What is a Short Sale Property and How Does it Work?

In your search for a home in NYC, you might come across the term “short sale.” This is when a homeowner sells their property for less than the amount they owe on the loan. The owner is “short” the cash to keep up with their mortgage payments and to avoid foreclosure they elect to sell. The bank or lender must agree to this as they stand to take a loss. But they may still prefer it to a foreclosure and having to take over the property. Completing a short sale usually takes far longer than a typical sale. Both the seller and interested buyer will need a lot of patience and there’s always the chance that the bank will refuse the sale. Here’s what you need to know about short sales.

What is a short sale

Let’s imagine that Mr. and Mrs. Smith borrowed $400,000 to purchase a home some years ago. At the time of the purchase, the home was appraised for $400,000. At some point, Mr. Smith loses his job and they begin to fall behind on their mortgage payments. Upon doing a comparative market analysis, the Smiths learned that the value of their home has dropped to $310,000. Still owing $385,000 on their loan, they decide to sell and seek permission from their bank to sell for $310,000. The bank will take a loss on this for which they won’t be happy. But that may still be better than having to repossess the home in foreclosure which is expensive and time-consuming. For the seller, a short sale allows them to avoid a foreclosure along with the loss in credit and possible bankruptcy that it entails.

How long does a short sale take?

Short sales usually take much longer than regular re-sale transactions. The average time between missing your first payment and foreclosure is four to six months. If the owner tries to sell after missing their first payment that’s how long it can be expected to take. The reason it takes so long is that banks won’t sign off on a short sale until they have a signed contract from a buyer. Any potential buyer will be cautious about signing a contract when they don’t even know if the bank will approve the sale. This catch-22 is usually resolved when the buyer agrees to sign a contract with a contingency that states the sale must be approved by a certain date.

What is the process of a short-sale?

Most short sales take place once the owner has missed their mortgage payment for the first time. Their choices are now looking very grim. They can choose to make a late payment plus fees, try to refinance or decide to sell. If the property’s value is now less than the loan amount then refinancing will be very difficult. Unless they can come up with enough money to pay the mortgage plus late fees, a short-sale may be their only option.

Once they choose to sell, the next step will be finding a broker that has experience with short sales and foreclosures. Working on their behalf, the broker will try to find the right person at the mortgage lender to approve the short sale. This can take some time as banks are typically overwhelmed and will have little time to deal with a short sale. Once the broker finds the right person they will ask for the bank’s short sale application. This will require the borrower to once again provide all their financial details. They must be able to prove that they are no longer capable of keeping up with payments and have no assets that would allow them to make their payments.

Once you submit your short sale application the most likely response is complete silence. The bank will not take it seriously until you have a signed buyer. Your only response is to have your broker list the property and do everything to secure a buyer as soon as possible. At this point, the process is no different from a regular sale. The present buyer’s market in NYC means that the average time on the market is now over 100 days. Once you have a signed contract it will then take another 30 to 90 days to close. This will depend on whether the buyer is paying all-cash or financing.

Any short sale will mean longer contract negotiations. Buyers won’t want to sign a contract or hand over a deposit if they can’t be sure the deal will even take place. The way around this is to negotiate for a smaller down payment and a set of conditions by which the contract will be canceled if not approved by a certain date. The due diligence period can also take longer if the title report finds a lot of issues. The sellers may owe money to multiple sources meaning potential liens and violations on the property. Should this happen, any debt holders with liens on the property will also have to agree to the short sale.

Buyer beware

If you choose to buy a short-sale property be ready for a long waiting game. Banks are notorious for taking as much as several months to approve short sales. A deadline in the contract may spur them into action but it’s no guarantee. The bank may even prefer a foreclosure if they think they can get more money out of it. If you’re seeking financing for the purchase, make sure your lender is fine with a short sale property. You may even have to increase your offering price to get the bank to agree to the sale. The seller has no real authority on the sales price. Only the bank does, and they may make a counteroffer. You’ll also be buying the property in an as-is condition, so you need to consider any possible repairs.

Final thoughts

Short sales can be beneficial to all parties. Sellers get to avoid foreclosure, buyers may be able to buy at reduced prices and lenders can avoid lengthy and costly foreclosures. The process is a long one and there’s no guarantee of it going ahead. Buyers should exercise caution and perform their own comparative market analysis on the home. Should you make it to escrow, do not skip the home inspection.

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Amazon Long Island City, but Opportunity is Elsewhere

Tech giant Amazon.com recently announced it would place its newest headquarters in New York City’s Long Island City. There are undoubtedly economic benefits to having the company in the city, although it is not without controversy. Both the state and New York City provided Amazon with generous benefits to lure the company to the area. These totaled $1.7 billion from the state plus several hundred million from the city.

While there has already been a positive impact on the neighborhood’s condo market, we have a different approach for buyers. We think the tried-and-true Upper East Side neighborhood is the better way to go.

Long Island City neighborhood

Once primarily an industrial area, Long Island City had already been transforming into a mixed-use neighborhood with office towers, residential buildings, retail stores, and homes.

There was heavy residential construction this year. Approximately 3,000 apartments were completed in the first half of this year, accounting for about 25% of the city’s new construction, according to one estimate.

Immediate reaction

Buying activity and interest exploded in Long Island City’s condo market when news leaked out that Amazon was seriously considering the neighborhood for one of its headquarters.

Interest remains strong amongst condo buyers and investors looking to take advantage of the “Amazon effect.” They believe the neighborhood and real estate market will benefit from having Amazon in the area due to increased stature and amenities.

Open house traffic has spiked earlier this month after the finalized deal was announced. Developers are increasing prices, which is particularly unusual this time of year as we head into the year-end holidays. The increased demand is also coming from overseas investors looking at Long Island City properties.

A better place

At Elika Associates, we think the Upper East Side remains the better place to purchase an apartment. With Long Island City, you are hoping the neighborhood continues to improve. Amazon has agreed to invest in infrastructure and green space, along with an investment in job training and internship programs. It will also make room in its space for a new school and tech start-up incubator, among other things. However, the deal with Amazon may halt residential construction in place of the large office buildings.

Meanwhile, the Upper East Side is already an established neighborhood. A globally recognized neighborhood, it attracts both international and domestic buyers. Granted it has some of the city’s priciest real estate. But, it features quiet streets, great schools, and a vibrant community. There is easy access to Central Park and a host of museums. It is also a nice and easy commute to other parts of the city. This is particularly true with the recent addition of the Second Avenue subway line.

It is also a simple and quick commute from the Upper East Side to Long Island City. There are several options, too. You can take the number 6 train to Grand Central and then transfer for the number 7 train, which you only take for one stop. It is an estimated 15-minute ride. If you prefer to ride your bike, the three or four miles should take about 30 minutes. For those willing to spend a little more money, or if you are in a pinch, you can take an Uber or Lyft ride, which should only take a few minutes, but this depends on traffic.

The upshot is that Long Island City is a hot neighborhood now, but whether it remains so is uncertain. The Upper East Side is a venerable, known commodity. While not immune to the real estate cycle’s ups and downs, you can rest assured that your home investment is secure due to the neighborhood’s many attractive features.

Final Thoughts

For those that do not care for the Upper East Side, we think Brooklyn’s Greenpoint neighborhood is another excellent alternative. Located about 10 minutes from Long Island City, the borough’s northernmost area was previously known as a working-class neighborhood. However, it has undergone a renaissance over the last 15 years. A 2005 rezoning is adding residential and retail space, taking away industrial space. With great shopping and retail stores, this is another worthy consideration.

The post Amazon Long Island City, but Opportunity is Elsewhere appeared first on ELIKA Real Estate.

Amazon’s Big Splash in LIC, but Opportunity is Elsewhere

Tech giant Amazon.com recently announced it would place its newest headquarters in New York City’s Long Island City. There are undoubtedly economic benefits to having the company in the city, although it is not without controversy. Both the state and New York City provided Amazon with generous benefits to lure the company to the area. These totaled $1.7 billion from the state plus several hundred million from the city.

While there has already been a positive impact on the neighborhood’s condo market, we have a different approach for buyers. We think the tried-and-true Upper East Side neighborhood is the better way to go.

Long Island City neighborhood

Once primarily an industrial area, Long Island City had already been transforming into a mixed-use neighborhood with office towers, residential buildings, retail stores, and homes.

There was heavy residential construction this year. Approximately 3,000 apartments were completed in the first half of this year, accounting for about 25% of the city’s new construction, according to one estimate.

Immediate reaction

Buying activity and interest exploded in Long Island City’s condo market when news leaked out that Amazon was seriously considering the neighborhood for one of its headquarters.

Interest remains strong amongst condo buyers and investors looking to take advantage of the “Amazon effect.” They believe the neighborhood and real estate market will benefit from having Amazon in the area due to increased stature and amenities.

Open house traffic has spiked earlier this month after the finalized deal was announced. Developers are increasing prices, which is particularly unusual this time of year as we head into the year-end holidays. The increased demand is also coming from overseas investors looking at Long Island City properties.

A better place

At Elika Associates, we think the Upper East Side remains the better place to purchase an apartment. With Long Island City, you are hoping the neighborhood continues to improve. Amazon has agreed to invest in infrastructure and green space, along with an investment in job training and internship programs. It will also make room in its space for a new school and tech start-up incubator, among other things. However, the deal with Amazon may halt residential construction in place of the large office buildings.

Meanwhile, the Upper East Side is already an established neighborhood. A globally recognized neighborhood, it attracts both international and domestic buyers. Granted it has some of the city’s priciest real estate. But, it features quiet streets, great schools, and a vibrant community. There is easy access to Central Park and a host of museums. It is also a nice and easy commute to other parts of the city. This is particularly true with the recent addition of the Second Avenue subway line.

It is also a simple and quick commute from the Upper East Side to Long Island City. There are several options, too. You can take the number 6 train to Grand Central and then transfer for the number 7 train, which you only take for one stop. It is an estimated 15-minute ride. If you prefer to ride your bike, the three or four miles should take about 30 minutes. For those willing to spend a little more money, or if you are in a pinch, you can take an Uber or Lyft ride, which should only take a few minutes, but this depends on traffic.

The upshot is that Long Island City is a hot neighborhood now, but whether it remains so is uncertain. The Upper East Side is a venerable, known commodity. While not immune to the real estate cycle’s ups and downs, you can rest assured that your home investment is secure due to the neighborhood’s many attractive features.

Final Thoughts

For those that do not care for the Upper East Side, we think Brooklyn’s Greenpoint neighborhood is another excellent alternative. Located about 10 minutes from Long Island City, the borough’s northernmost area was previously known as a working-class neighborhood. However, it has undergone a renaissance over the last 15 years. A 2005 rezoning is adding residential and retail space, taking away industrial space. With great shopping and retail stores, this is another worthy consideration.

The post Amazon’s Big Splash in LIC, but Opportunity is Elsewhere appeared first on ELIKA Real Estate.

What is an All-Cash Offer to Buy Real Estate?

When it comes time to submit an offer on an NYC apartment, how much cash you can put down can make a big difference in how your offer is perceived. Those who can submit an all-cash offer immediately gain an advantage over those who are financing the purchase. This can be very valuable in a hot market where there is a lot of competition. All-cash offers are good for sellers as it means the deal is a sure thing and they can close a lot quicker. For buyers, they have greater leverage in negotiations and stand to get a lower sales price. But how much you can save depends on each listing and some sellers will still prefer a higher sales price from a financed buyer rather than a quicker and lower risk deal from a cash buyer. Here’s what you need to know about making all-cash offers in NYC.

What is an all-cash offer?

An all-cash offer is when a buyer has the funds available to make a home purchase without the support of a mortgage from a lender or bank.

What are the advantages of all-cash offers

Cash is king in real estate, and when it comes to competing against other buyers, it’s hard to do better than an all-cash offer. What makes all cash offers so attractive for sellers is that they don’t need to worry about any mortgage contingencies and approval. They know the deal is going to close with the least amount of risk to them in money and in a shorter time as there is no third-party involved. The risk that comes with a mortgage-backed buyer is that should the property be appraised for less than the purchase price then the buyers may be forced to make up the difference. If they can’t do that they may demand that they pay only the appraised value or walk away. The mortgage contingency in the sales contract will allow them to do this and without fear of losing their deposit.

To be clear, an all-cash offer doesn’t mean the buyers will be showing up on closing day with a suitcase full of Ben Franklins. It just means they don’t need the assistance of a bank or lender. Speed is the biggest thing a cash buyer can advertise. This allows the sellers to sell more closely on their terms. There’s no need for an appraisal and home inspections while still done (and recommended) can be skipped. The sale can take place as fast as the title company can get the paperwork together. All-cash offers will also not include a mortgage contingency in the sales contract. That means that should the buyer fail to show up on closing day with the money; the seller gets to keep the buyer’s 10% contract deposit.

How likely a seller is to accept an all-cash offer depends on their circumstances. For instance, if the seller has an imminent job transfer to another city and needs to sell ASAP, they’re more likely to accept a lower offer price if it means a sure and quick sale. However, if the seller is not in any rush to sell and wants to make a gain on the sale, then they’re more likely to prefer a larger offer that is financed.

What are the disadvantages of all-cash offers

The main drawback to all-cash offers is that you’ll have less leverage once the sale is closed. The high price of real estate in NYC means you’ll need a large amount for an all-cash offer which leaves less post-closing to spend on renovations and other things compared to if you had taken out a loan. You’ll also want to factor in buyer closing costs when deciding whether an all-cash offer is a correct choice.

Are all-cash offers non-contingent?

Not necessarily. While there won’t be a mortgage contingency there can still be a Hubbard contingency. This is a contingency which requires you to sell another property before you can close on this one. If your all-cash offer has a contingency, then it is far less beneficial to the seller. The only benefit they get is quick closing time, so they may be less likely to accept a lower offer

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Debt-to-Income Ratio when Applying for a Mortgage

The debt-to-income ratio, which is expressed as a percentage, is one of the most important numbers banks examine when deciding how large a loan to extend to you. As the number increases, banks’ assessment of your credit risk also rises.

It is seemingly a straightforward calculation. But, it is decidedly more complicated, particularly in New York City. Nonetheless, it is essential to get a handle on the number so that you can understand your housing budget.

What is debt-to-income?

Lenders break out the debt-to-income ratio further into front-end and back-end ratios. Typically, the ratio uses your monthly debt payments and income. Therefore, the denominator is your monthly income. The bank calculates the ratios based on your gross monthly income or before your employer takes out any payroll or other deductions. It also includes other income, such as interest.

The numerator depends on whether you are calculating the front-end or back-end ratio. A bank’s front-end ratio adds your housing expenses. This includes your monthly mortgage payment, taxes, homeowner’s insurance, and maintenance fees/common charges. The back-end ratio is more extensive. This is everything the front-end ratio includes plus your other monthly debt. So, monthly payments for items such as student loans, car loans, credit cards, and alimony are also added. Payments for items such as utilities, food, and healthcare are not part of the calculation.

However, while you and your lenders know your existing debt payments, this is not the case for your housing expenses, which are estimated. This is not as challenging as it appears, though. You can use any free online mortgage calculator to figure out your mortgage payment, including principal, interest, taxes, and insurance. Generally, homeowner’s insurance is $1,000 to $2,000 per year, and you can figure the property taxes based on several buildings that you are interested in. You can do the same thing for maintenance fees or common charges.

Strict New York City co-op boards

Many New York City lenders are looking for a back-end ratio that does not exceed 43%, although traditionally it had been 36%. This allows you to qualify for a conforming mortgage. Early in the home buying process, you should ask various lenders what about its requirements. If your ratio exceeds what lenders allow, you may need to rethink your housing budget. You can also take steps to lower your ratio, such as repaying debt. It is advisable to formulate a budget to help you achieve your goal.

However, in New York City, co-op boards may require a lower ratio. In some instances, they will not approve your application if your ratio is greater than 25% to 30%. The more conservative approach is designed to protect the building’s financial interests. Condo boards are less strict.

A mortgage lender

After you have done your calculation, it is advisable to work with a lender. He or she can pre-approve your loan, which also helps support your bid. Remember, this is the maximum amount you can borrow, but you need to feel comfortable with your mortgage loan. Also, your agent can tell you what a building’s co-op board acceptable debt-to-income is to ensure you are within the range.

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