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PART 1 - OPENING STAGES 13&1"3*/( '03 5)& 1301&35: 4&"3$) If yo are reading this, PRE APPROVAL *G ZPV BSF QMBOOJOH PO HFUUJOH B NPSUHBHF UP QVSDIBTF ZPVS IPNF PCUBJOJOH B QSF BQQSPWBM GSPN B CBOL JT POF PG UIF GJSTU TUFQT ZPV TIPVME UBLF " QSF BQQSPWBM JT B MFUUFS GSPN B MFOEFS UIBU TUBUFT IPX NVDI NPOFZ UIBU MFOEFS XJMM CF XJMMJOH UP MFOE UP ZPV PO B QVSDIBTF PG B IPNF 1SF BQQSPWBMT BSF VTFGVM GPS UIF GPMMPXJOH SFBTPOT 1 When yo are ready to sbmit offers, a pre-approval is sbmitted alongside an offer to give yor offer credibility. A seller will take an offer with an attached pre-approval more seriosly than one withot. 2 A pre-approval allows yo to nderstand what yo can actally afford. A lender will perform an extensive check on yor financial backgrond and credit to determine the specific mortgage amont yo are approved for. Using this information, yo can narrow down yor search to specific price points and prevent yorself from being caght off-gard later in the process. 3 Dring the pre-approval process, yo have the opportnity to shop arond at p different banks and determine which bank will give yo the most favorable terms for yor evental mortgage. It is generally advisable to have yor bank choice lined p before yo start sbmitting offers. We wold sggest talking to at least 3 different banks to determine the interest rates, mortgage amonts, and terms each wold be willing to offer and narrowing yor options down to one or two banks yo will be moving forward with. Tip: Banks shold not charge yo any fees dring the pre-approval process. If a bank is asking yo to pay a fee, ask them what the fee is for and whether it will be applied to yor closing costs at closing. Tip: Shold yo se a mortgage broker or not? A mortgage broker is sefl becase they can share yor information with their extensive network of banks to secre a loan with favorable terms for yo. This comes at a cost. Mortgage brokers generally charge 1% - 2% of the loan amont for their services. If yo are ncertain whether yo wold qalify for a loan de to a choppy job history, poor credit, or some other circmstance, it may be worthwhile to se a mortgage broker that can shop arond to actally get yo a loan. If yo are qalified and have no barriers holding yo from getting a loan, then a mortgage broker is sally not necessary. JU JT RVJUF MJLFMZ ZPV BSF JO UIF NBSLFU UP QVSDIBTF B IPNF PS BSF DPOTJEFSJOH FOUFSJOH UIF NBSLFU $POHSBUVMBUJPOT PO UIJT NBKPS EFDJTJPO 1VSDIBTJOH B QSPQFSUZ JT BO FYDJUJOH ZFU PęFOUJNFT TUSFTTGVM UJNF 8F IBWF EFTJHOFE UIJT QSFTFOUBUJPO UP IFMQ HVJEF ZPV UISPVHI UIF QSPDFTT PG QVSDIBTJOH B IPNF JO /FX :PSL 8F XPVME CF HMBE UP TJU EPXO XJUI ZPV UP BOTXFS BOZ RVFTUJPOT ZPV NBZ IBWF
Determine yor Search Criteria $PPQ PS $POEP EFUFSNJOJOH ZPVS OFJHICPSIPPE ZPVS CVEHFU XIJDI BNFOJUJFT ZPV BCTPMVUFMZ OFFE BQBSUNFOU TJ[FT BOE MBZPVUT ćftf BSF TPNF PG UIF NBOZ JUFNT ZPV XBOU DMBSJUZ PO XIFO ZPV BSF BCPVU UP TUBSU ZPVS BQBSUNFOU TFBSDI *G ZPV BSF XPSLJOH XJUI B )JHIMJOF "HFOU XF XJMM IBWF B TIPSU JOUSPEVDUPSZ NFFUJOH XJUI ZPV UP EFUFSNJOF UIF BOTXFST UP UIFTF RVFTUJPOT BOE BOZ PUIFS SFMFWBOU RVFTUJPOT )FSF BSF TPNF PG UIF UIJOHT ZPV TIPVME DPOTJEFS ASSET CLASSES $PPQ T $POEPT BOE )PVTFT UIFTF JODMVEF UPXOIPNFT CSPXOTUPOFT SPX IPNFT BOE GBNJMZ IPVTFT FUD BSF UIF UZQFT PG BTTFU DMBTTFT UZQJDBMMZ QVSDIBTFE JO /FX :PSL &BDI IBT JUT PXO QFDVMJBSJUJFT *O.BOIBUUBO $P PQT BSF UIF NPTU DPNNPO BTTFU DMBTT BWBJMBCMF GPS TBMF GPMMPXFE CZ DPOEPT BOE UIFO IPVTFT *O UIF PVUFS CPSPVHIT IPVTFT BSF UIF NPTU DPNNPO GPMMPXFE CZ DPPQT BOE GJOBMMZ DPOEPT " $P PQ TIPSU GPS DPPQFSBUJWF JT B CVJMEJOH UIBU JT PXOFE BOE NBOBHFE CZ B DPSQPSBUJPO *OEJWJEVBMT BOE TPNFUJNFT FOUJUJFT PXO TIBSFT JO UIF DPSQPSBUJPO BOE UIF TIBSFT BMMPX FBDI TIBSFIPMEFS UIF FYDMVTJWF SJHIU UP PDDVQZ B TQFDJGJD VOJU JO UIF DPPQFSBUJWF CVJMEJOH Advantages in bying a Co-op: Co-ops are generally cheaper than condos and hoses on a price per sqare foot basis. No mortgage recording tax. When yo prchase a co-op apartment, yo are bying shares in a corporation, and even if yo finance the prchase of these shares yo do not need to pay the New York Mortgage Recording Tax, which is generally the largest closing cost for any byer and ranges between 2% and 2.2% of the loan amont. This can amont to thosands of dollars of savings. Co-ops typically have stringent sbletting policies, so if yo prefer to live in a bilding which is primarily owner occpied rather than occpied by rental tenants, this wold be an advantage for yo. Disadvantages in bying a Co-op: Strict approval process involves comprehensive board approval and board interview. Coops have financing reqirements (many will only accept a maximm of 80% financing) and will not approve low down payment financing options. Stringent sbletting policies mean yo cannot easily rent ot yor nit. De to this, co-ops are sally not an option if yo are prchasing an apartment as an investment or need the exibility to rent down the road. When yo want to sell yor nit, the potential byer has to go throgh the board approval process and may get rejected.
" $POEP TIPSU GPS DPOEPNJOJVN JT B CVJMEJOH XIJDI DPOTJTUT PG NBOZ JOEJWJEVBM QSPQFSUZ VOJUT &BDI VOJU JO B DPOEP CVJMEJOH JT PXOFE CZ B TFQBSBUF JOEJWJEVBM PS FOUJUZ &BDI PG UIFTF PXOFST BMTP PXO B QPSUJPO PG UIF DPNNPO BSFBT PG UIF CVJMEJOH Advantages in bying a Condo: Since most of the new developments that are being bilt in New York are condos, condos are typically renovated and have better finishes then coops. Condo bildings also generally have more amenities. No sbletting policy means yo can easily rent ot yor nit if need be. Condos are more attractive as investment prchases for this reason. Boards rarely block the resale of a condo, making the condo a more liqid asset. Boa Financing reqirements are lenient, allowing byers to prchase condominims with low down payment financing options. Disadvantages in bying a Condo: Condos are typically more expensive than co-ops on a price per sqare foot basis. Condos can contain a large nmber of rental tenants. As renters are transient occpants, they are less likely to take care of the property and may not adhere to the condo rles. " IPVTF SFGFST UP UIF CSPBE DBUFHPSZ PG BMM SFTJEFOUJBM QSPQFSUZ UIBU JT OPU B DPOEP PS B DPPQ )PVTFT BSF GPVOE NPTU PGUFO JO MFTT EFOTF BSFBT 8IJMF IPVTFT BSF SBSF JO.BOIBUUBO UIF CVML PG BMM UIF JOWFOUPSZ UIBU FYJTUT JO UIF PVUFS CPSPVHIT DPOTJTUT PG IPVTFT Advantages in bying a Hose: A hose provides the greatest level of privacy. No Approval process means as long as yo have the financial means to prchase, yo can prchase. Private hoses have the most space in general, and are more likely to be dplexes/triplexes. This comes at the cost of higher prices. Yo are not reliant on a condo or coop board to make decisions that may improve or hinder yor living conditions. Easiest to resell de to no approval process making hoses the most liqid property type. Disadvantages in bying a Hose: Generally higher living costs. Since expenses sch as tilities, taxes, and repairs are not shareamongst mltiple condo or coop owners, they generally end p being higher. Condos and sometimes Coops o en offer high end amenities not offered in private homes, sch as a gym, doorman, pool, concierge, etc. Usally the most expensive asset class on a price per sqare foot basis. Homeowners will have to take care of everything themselves. Examples inclde having annal inspections performed, dealing with violations, maintenance isses, etc. In a condo or coop, isses sch as these are taken care of by the managing agent and/or board.
Asset Classes Continted: Tip: Yor choice of neighborhood, yor desire for specific amenities, space, and living conditions will o en determine which Asset class yo will end p prchasing. For example, most people that want to live on the Upper West Side in Manhattan will end p prchasing a coop, becase if they search for condos or hoses, their options wold be severely limited. Another example: people that want lxry amenities sch as a pool or gym in Long Island City will need to prchase a Condo. Based on yor desires, yor agent shold be able to qickly explain which asset class yo shold be looking at. NEIGHBORHOOD :PV NBZ BMSFBEZ IBWF B HPPE JEFB PG XIJDI OFJHICPSIPPE ZPV XBOU UP MJWF JO CFGPSF ZPV TUBSU ZPVS IPNF TFBSDI *G ZPV BSF PO UIF GFODF PS BSF USZJOH UP OBSSPX ZPVS TFBSDI EPXO GSPN TFWFSBM OFJHICPSIPPET IFSF BSF TPNF PG UIF JNQPSUBOU QPJOUT UP DPOTJEFS 1 Whether yo are driving, taking a cab or sing the pblic transportation system, yo want to consider how qickly and easily yo can get to yor place of work as this is something yo will be doing almost every day. A good tool to se to calclate commte time is the MTA Trip Planner fond here: tripplanner.mta.info 2 Cafes, Bars, Restarants, Gyms, Parks, Shopping, etc. are some of the things yo probably se on a day to day basis. Think abot the ease in access to these things in different neighborhoods. A good tool to se is walkscore.com 3 Each neighborhood in New York has its own cltre. Learn abot each neighborhood in detail on the Highline Residential Neighborhood Gide fond here: www.hlresidential.com/nyc-top-neighborhoods APARTMENT FEATURES, AMENITIES AND LAYOUTS 8IFO CVZJOH JO /FX :PSL NPTU QFPQMF XJMM IBWF UP DPNQSPNJTF *U JT VOMJLFMZ ZPV XJMM HFU FWFSZ BNFOJUZ ZPV XBOU JO UIF OFJHICPSIPPE ZPV XBOU BU UIF QSJDF QPJOU ZPV DBO BGGPSE "T B CVZFS ZPV TIPVME SBOL ZPVS XBOUT CBTFE PO PSEFS PG JNQPSUBODF BOE SFMBZ UIJT JOGPSNBUJPO UP ZPVS BHFOU %P ZPV OFFE UP IBWF B EPPSNBO PS JT JU NPSF JNQPSUBOU UIBU ZPV MJWF DMPTF UP ZPVS DIJME T TDIPPM %P ZPV XBOU QBSL WJFXT PS UP CF XJUIJO FBTZ XBMLJOH EJTUBODF UP UIF TVCXBZ 5IFTF BSF FYBNQMFT PG UIF UZQFT PG RVFTUJPOT NPTU IPNFCVZFST JO /FX :PSL GJOE UIFZ IBWF UP BOTXFS 4PNF PG UIF JUFNT ZPV XJMM OFFE UP NBLF EFDJTJPOT PO JODMVEF -JWJOH 4QBDF 7JFXT #VJMEJOH "NFOJUJFT 1FU 1PMJDZ #VJMEJOH 1PMJDJFT "QBSUNFOU -BZPVU 'JOJTIFT 0VUEPPS "SFBT FUD
PART 2 - THE PROPERTY SEARCH '*/%*/( 5)& 3*()5 )0.& '03 :06 HOW AN AGENT CAN HELP YOU *O UPEBZ T JOUFSOFU BHF ZPV XJMM IBWF TPNF TVDDFTT JO MPPLJOH GPS B IPNF TJNQMZ CZ CSPXTJOH EJGGFSFOU XFCTJUFT $POTJEFSJOH UIJT TIPVME ZPV VTF UIF TFSWJDFT PG B MJDFOTFE SFBM FTUBUF BHFOU UP IFMQ ZPV JO ZPVS TFBSDI 8IFO CVZJOH B QSPQFSUZ UIF BOTXFS UP UIJT RVFTUJPO JT BO FBTZ ZFT.PTU TBMFT USBOTBDUJPOT JOWPMWF UXP BHFOUT UIF #VZFST 3FQSFTFOUBUJWF BOE UIF 4FMMFS T 3FQSFTFOUBUJWF #PUI BHFOUT BSF QBJE B DPNNJTTJPO CZ UIF TFMMFS " CVZFS T BHFOU XJMM QSPWJEF ZPV XJUI B XFBMUI PG TFSWJDFT BU OP DPTU UP ZPV "T ZPV BSF QSPCBCMZ BXBSF UIJT HVJEF IBT CFFO XSJUUFO CZ CSPLFST BOE TP JU T FYQFDUFE UIBU XF XPVME QMBZ VQ PVS WBMVF 8F TUJMM XBOU ZPV UP CF BXBSF PG TPNF PG UIF CFOFGJUT XF PGGFS UP ZPV BT B CVZFS If yo decided not to se the services of a Byer s Agent, when yo go ot and start doing previews, yo will be shown homes by the Sellers agent. The seller s agent will look ot for the Seller s interests (not yor interests) becase they have a listing agreement with the seller which reqires them to do so. A Byer s agent will look ot for yor interests by disclosing all facts, helping perform de diligence, advising yo, and giding yo throgh the process of bying a home. A Byer s agent has access to detailed information (via the MLS) on the crrent inventory that exists on the market and also past history of inventory and in transactions. This information will help yo make informed decisions. An example: The home yo are interested in was on market last year for 6 months bt did not sell and was then taken off market. Once yo learn this, yo probably want to do some research on why the home did not sell last time. If yo are still interested, yo know that yo have significant negotiating power in this transaction. Yo save time. The agent will do all the research, set p showings, preview homes before showing them to yo, help prepare all the paperwork, and mch more. Tip: It is nnecessary to se mltiple agents to help yo find a home. Most agents have access to the same inventory (via the MLS) and work for the same price (free for yo). The most important thing is for yo to find someone yo like and trst and stick with them. They will be mch more willing to expend significant time and effort to help yo if they know that they are the only agent yo are working with.
Sbmitting Offers and Negotiation %VSJOH UIF DPVSTF PG ZPVS QSPQFSUZ TFBSDI ZPV XJMM FWFOUVBMMZ JEFOUJGZ QSPQFSUJFT UIBU ZPV XBOU UP TVCNJU PČFST PO 0ČFST JO /FX :PSL BSF TVCNJUUFE JO XSJUJOH BOE DBO JODMVEF UIF GPMMPXJOH EPDVNFOUT UIFTF EPDVNFOUT BSF QSFQBSFE CZ ZPVS BHFOU SUBMITTING OFFERS 1 0GGFS 4IFFU 5IJT XJMM JODMVEF ZPVS PGGFS QSJDF UJNFGSBNF DPOUJOHFODJFT BOE DPOEJUJPOT 5IF PGGFS TIFFU JT OPU CJOEJOH TP FJUIFS QBSUZ DBO BMXBZT CBDL PVU PG UIF USBOTBDUJPO VOUJM B DPOUSBDU JT PGGJDJBMMZ TJHOFE 2 1SF "QQSPWBM -FUUFS "T FYQMBJOFE QSFWJPVTMZ JO UIJT HVJEF UIF QSF BQQSPWBM XJMM TIPX TFMMFST UIBU ZPV BSF TFSJPVT BOE SFBEZ UP DMPTF 3 'JOBODJBM 4UBUFNFOU 5IJT TUBUFNFOU XJMM JODMVEF B TVNNBSZ PG ZPVS BTTFUT MJBCJMJUJFT BOE JODPNF TIPXJOH UIF TFMMFS ZPV IBWF UIF GJOBODJBM NFBOT UP QVSDIBTF 4 1SPPG PG 'VOET (FOFSBMMZ B DPQZ PG UIF GJSTU QBHF PG ZPVS CBOL TUBUFNFOU T TIPXJOH ZPV IBWF GVOET GPS EPXO QBZNFOU Unless yo sbmitted an offer at asking price, more o en than not yo will be getting a conter offer from the seller s agent. The seller s agent may or may not let yo know whether they have received other offers on the property. Remember that when a seller gives yo information like this, it is part of their negotiating strategy. They may be giving yo accrate information, they may also be giving yo inaccrate information. The seller or sellers agent are not reqired to disclose accrate details on other offers they may have received. Yor agent will help yo navigate the negotiating process on yor side. They can do an analysis on comparable properties that sold in the area to help yo determine a fair market price for the property. Bt at the end of the day, the price yo are willing to pay for a property is determined by yo. p Tip: If yo are interested in a property, do not sbmit lowball offers. Remember that sellers are doing the research on their side and also have an idea of the fair market vale of their property. When yo sbmit lowball offers, sellers are less likely to take yo seriosly, ptting yo at a competitive disadvantage verss other byers that may also be interested. We generally sggest sbmitting an offer with the idea that yo will not increase yor price or yo will only increase yor price once a er yor initial offer. Have yor agent relay this information to the seller s agent to show yo are serios and ready to close a transaction withot an excessive amont of song and dance. In or experience, we have o en come across sitations where byers regretted sbmitting lowball offers becase they didn t find anything better a erwards and they were nable to close on that initial transaction. Tip: Have yor real estate attorney lined p before yo start sbmitting offers. An attorney will prepare and review contract docments, help yo perform de diligence, and represent yo at closing. Having yor attorney in place once again shows the seller yo are serios and are ready to close a transaction. Seller s care abot time, and if yo show that yo are ready to close a transaction by having all yor dcks in a row, they will o en accept an offer rather than trying to wait for a better offer which might come weeks down the road and from a less serios byer.
PART 3 AFTER CONTRACT SIGNING 5)& )0.& 453&5$) THE LOAN APPLICATION 0ODF ZPV IBWF TJHOFE B DPOUSBDU DPOTJEFS ZPVSTFMG PO UIF DMPDL :PVS HPBM JT UP QFSGPSN BMM SFRVJSFE QBQFSXPSL BOE EJMJHFODF BT RVJDLMZ BT QPTTJCMF 5IF QSPDFTT UP DMPTF DPOTJTUT PG B TFSJFT PG MJOFBS TUFQT BOE EFBMT DBO TPNFUJNFT GBMM UISPVHI CFDBVTF ZPV XFSF VOBCMF UP DMPTF PO UJNF UIF TFMMFS NBZ IBWF SFDFJWFE B NVDI CFUUFS PGGFS BOE IBT UIF BCJMJUZ UP CSFBL UIF DPOUSBDU CFDBVTF ZPV EJE OPU DMPTF PO UJNF 3JHIU BGUFS DPOUSBDU TJHOJOH ZPV OFFE UP HP UP ZPVS CBOL BOE PGGJDJBMMZ BQQMZ GPS ZPVS MPBO 5IF MPBO QSPDFTT DBO TPNFUJNFT UBLF TFWFSBM XFFLT BOE JG ZPV GP BSF QVSDIBTJOH B DPOEP PS DPPQ ZPV XJMM IBWF UP HP UISPVHI UIJT FOUJSF QSPDFTT CFGPSF ZPV DBO NPWF GPSXBSET UPXBSET CPBSE SFWJFX Step 1: Bank will ask for all yor spporting financial docmentation, inclding tax retrns, paystbs, employment verification letters, bank statements, etc. Step 2: The bank will schedle an appraisal on the property. Step 3: A er yo go throgh the banks nderwriting procedre, the bank will provide yo with a commitment to lend assming the appraisal went well. They may also offer yo the ability to lock in yor interest rate for a period of 15-60 days Tip: Ask yor bank to schedle an appraisal as soon as possible. The appraisal is performed by a third party. Since the bank cannot give yo a commitment ntil the appraisal report is in, a delayed appraisal means a delayed closing. Tip: Banks will ask yo for a lot of docmentation, some of which may seem redndant and repetitive. Banks have more stringent nderwriting procedres a er the sbprime crisis. Do not get frstrated and send in everything reqested by the bank as qickly as possible.
De Diligence Yor Attorney will sally help yo perform all the relevant de diligence on yor new home prchase. This incldes bt may not be limited to hiring a title company to perform the title search, reviewing the coop and condo mintes, reviewing the coop proprietary lease, reviewing the condo declaration and offering plan, and looking into any easements, violations, or liens that may exist on the property. Attorneys do not sally schedle a home inspection for yo, so this is something yo will have to take care of yorself. Condo or Coop Board Application & Approval In conjnction with o cially applying for yor loan, yo shold start preparing yor condo or coop board package (nless yo are prchasing a hose, in which case this step is nnecessary). Yor agent will reqest an Application Package from the managing agent or board of the bilding. Yor agent will then review all the reqirements and ask yo to pt together all reqired financial and personal docments. Yor agent will organize and prepare the board package which will then be reviewed by a Highline Manager. Assming the package has no isses, yor agent make all the reqired copies and sbmit to the managing agent and/or board for their review. Tip: The board application will otline all the fees and deposits yo will be reqired to pay before and a er move in. These inclde the application fee, move-in fee or deposit, and any pet deposits that are reqired in that bilding. The application will also give yo a hint of how the coop rns, what sorts of policies and hose rles are in place, and gives yo an opportnity to verify if the bilding wold indeed be a good fit for yo. Closing Closing is when title is transferred, checks are exchanged, and the transaction is o cially completed. Yor closing will sally occr in the managing agent s o ce or one of the attorneys o ces. As long as there are no hiccps, closings shold last between 1 and 2 hors. The parties that are sally present at a closing inclde the seller, the byer, both attorneys, the bank, the managing agent, the closing agent, and both real estate agents. Tip: Ask yor attorney to send yo a breakdown of all the checks (certified and personal) yo shold bring with yo to the closing. Bring a few extra personal checks to the closing along with these jst in case. Tip: Perform a walkthrogh of the apartment a few days prior to closing. Yor agent will perform this walkthrogh with yo to confirm the apartment is in the condition yo are expecting and any fixtres that are being transferred with the title are still in the property.