Whether you are looking for a loft, penthouse, townhome (these are called townhouses in NYC), or luxury apartment, among the first steps in the process of purchasing real estate in Manhattan is to select a real estate agent. Ideally, your agent will have a detailed knowledge of types of properties, the various neighborhoods in Manhattan, and the market. A good agent will listen to your requirements, preview properties and schedule appointments, provide information and market analytics and work to eliminate the complexities of the process so that your purchase is an enjoyable and positive experience.
By working with an experienced, knowledgeable agent you can save a substantial amount of time, looking at properties that meet your specific needs and having your questions about the property, location, comparable properties and recent sales answered quickly.
It is important to have an idea of how much you can spend on a new home prior to beginning your search. Options include: paying all cash, obtaining a mortgage with a financing contingency in the contract of sale, or obtaining a mortgage without a financing contingency.
If you are financing with a mortgage, the financial requirements vary from bank to bank. We recommend that you obtain either a pre-qualification letter or if possible, a pre-approval letter for financing, from a mortgage broker or banker. This allows you to act expeditiously and with confidence when you identify the property you would like to purchase. Pre-qualification or pre-approval also helps to assure the seller that you are a qualified purchaser. Your mortgage broker or bank will compare, analyze and help you determine what best meets your needs. And an experienced agent should be able to guide you through many of these steps.
Everyone has a relative or friend that is a lawyer, but when deciding on which lawyer to use, we highly recommend lawyers that specialize in real estate and understand the nuances of NYC real estate, beyond NY real estate in general, as they are truly the experts. Time is often critical so also be sure your attorney is available to move quickly, during the time period in which you will be likely to need them.
What do you want from your living space? What is your preferred location, size, style? How much do you want to spend? Are you willing to renovate extensively or only a little bit? Will this purchase be your primary residence or investment property? These are some of the important questions you will want to answer for yourself at the very outset of the process. Of course, these answers may change as you look at homes and evaluate your needs over time.
Depending on what you are looking for, it could take one day or one year to find the right property for you. The average person sees 20 to 25 townhouses, for example, before deciding on the perfect one. In addition to showing you exactly the type of properties that you are looking for, your agent should also constantly be looking for new listings and being as proactive as possible, perhaps sending letters to appropriate homeowners who sometimes become interested in selling once they know there is an interested and qualified buyer who values their property.
A good agent will gather information on the buildings (certificate of occupancy, floor plans, landmark status, FAR information, violations, ect.) as well as information on comparable properties, so that you can determine if the building is right for your needs.
Your offer, submitted through your agent, will include various provisions such as the purchase price, amount of financing, included and/or excluded personal property (such as window treatments, lighting fixtures, etc.), preferred closing date, and financial information on you as the purchaser. Most homes in Manhattan are sold in “as is” condition. Expect that you and your agent will go back and forth in negotiations with the seller’s agent until your offer is accepted.
You will want to have your property inspected by an experienced home inspection company. Your inspector will visually determine that all building systems are in working order. He will examine everything from the foundation to the roof. You will then receive a written evaluation of your property. Since most inspectors do not inspect for insects, you will also want an insect inspection to be performed as well.
Generally, in a sales transaction, both the buyer and the seller are represented by a Manhattan real estate attorney. The seller’s attorney draws up the contract for the buyer’s attorney and upon receipt, the buyer’s attorney performs “due diligence”: checking for violations with the NYC Building Department and the Landmarks Commission. Your attorney will also look for encumbrances on the deed filed with the City of New York. Once all terms are agreed to, the buyer signs the contract and returns it to the seller’s attorney along with (typically) a 10% deposit. Once the deposit is received, the seller executes the contract. Possible contingencies may include financing and closing dates. A contract is binding only after both parties have signed it, the required deposit has been delivered and the contract has been returned to the buyer’s attorney fully executed.
Mortgage applications cannot be processed without a fully executed contract. If a property is being financed, the seller requires a commitment letter from the mortgage bank. The bank will require an appraisal. The loan process typically involves several steps from application to appraisal to approval. This process may take up to 45 days (or longer) to complete and hinges on your ability to provide all of the required financial data to your mortgage broker/banker in a timely manner.
With a townhouse, as opposed to other properties, there is no requirement to submit a board package or to meet with a cooperative or condominium board or to wait for board approval, but most NYC real estate transactions do contain this step. A closing can be scheduled once a “cleared to close” is received from the mortgage provider or if there is no financing, upon agreement of the parties. The closing is ordinarily held at the office of the seller or, if applicable, the lender’s attorney.
The closing is attended by the buyer, buyer’s attorney, the seller, the seller’s attorney, the lender’s attorney, the title company closer and the real estate agent(s) involved in the transaction. Documents included in the sale of NYC real property include a deed and title report.
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