What can I do to prepare myself for purchasing an apartment?
Purchasing an apartment is an incredibly rewarding experience. First thing is to figure out what type of apartment you want. Make a list of priorities including price range, apartment size, location, style and amenities (doorman, gym, etc). Understand your budget, you may want to speak with your accountant - consider how much you can put as a down payment, as well as your monthly payment which can include mortgage, maintenance, real estate tax. Your real estate transaction needs three professionals: find the right real estate agent, speak with a financing expert to obtain a preapproval letter and have a seasoned real estate attorney for the close.
Should I get pre-approved for a mortgage?
Yes! There are a number of benifits to speaking the your financing expert prior to looking for an apartment. First, by speaking your mortgage broker you will learn about the mortgage process, ask questions and know what price range you can purchase. Being pre-qualified will make your offers more attractive to sellers, as the seller will know that you will be able to purchase the apartment when submitting an offer. To become pre-approved, meet with your mortgage broker with information about your background, work history. You will receive a letter from your lender stating the amount of your loan - this letter is good for about 60 days.
What are the differences between a Condo and a Coop?
Purchasing in a Coop you are purchasing shares in the building corporation which allow you to become a shareholder. Ownership comes in a the form of a proprietary lease. Shareholders pay a maintenance to the corporation with covers building maintenance, real estate taxes and the underlying mortgage. To purchase, the buyer must submit a board package which is reviewed by the "Board of Directors" and . There is also an interview which the board will require.
Purchasing in a Condominium, the buyer is purchasing real property and is given a deed. As an owner of a Condominium you also own a small share of the common spaces (lobby, hallways, etc). Each apartment pays a monthly common charge to cover the cost of building maintenance. Each apartment receives a separate tax bill from the city.
How long will the apartment take to close once I submit an offer?
The timeline for closing can take anywhere from 60-90 depending on whether you are buying a coop or condo. This is a step by step of the buying process.
Prepare the Offer: 1 day
Negotiate the Offer & Acceptance: 2-5 days
Contract Review / Due Diligence, Loan Application & Appraisal, Loan Approval and Commitment Letter, Sign Contract/Escrow Deposit: 2-4 weeks
Condo Application / Co-op Board Package & Interview: 4-6 weeks
Bank & Attorney Prep Closing: 1-2 weeks
Final Walk Through: Day of Closing
Transaction Closing: 3 hour
What are closing costs?
When purchasing a Coop or Condominium, it is important to be aware of closing costs associated with the purchase. These are typical closing cost associated with purchasing in New York: Buyer’s Attorney: Consult your attorney, Bank Fees: $350-$750, Application & Processing Fee: $700 (different depending on building), Appraisal Fee: $300-$1,500 (approximate - depending on sales price), Mansion Tax: 1% of entire purchase price where price is $1,000,000 or more., Miscellaneous Co-op Charges: Vary by building, Recognition Agreement Fee: $200+, Maintenance Adjustment: Pro-rated for the month of closing, Short Term Interest: Equal to interest for balance of month in which you close.