|
Buying
a co-op in NYC:
Most
buildings in Manhattan are co-ops... When you find the co-operative
apartment that you wish to buy, there is a procedure to
follow before that apartment becomes yours. Most likely,
these are the steps you will follow:
1.
The offer and negotiation: You will make an offer
on the apartment. That price will be accepted or rejected.
The seller may make a counter proposal and then you will
negotiate.
2.
The mortgage: If financing is needed, go to several
banks and inquire about how much money you can borrow on
a "co-op loan" or a "personal loan"
and at what rate of interest. If you are a foreign national,
and you have most of your money in a bank in your home country,
you can either transfer a portion of your money to an American
bank or get an international banking reference.
3.
The credit report: You will need a strong "credit
rating" for the bank as well as for the corporation.
The bank will be hesitant to lend you money until they check
your rating. The Board of Directors of the cooperative will
not approve you until they check your financial statement
and your credit rating.
4.
The real estate lawyer: Contact a real estate lawyer
to represent you. He will check several things for you in
order to be sure that the building and apartment are good
investments.
5.
The contract and deposit: The seller's attorney draws
up a contract and gives it to the purchaser's attorney.
When both parties sign the contract, the buyer gives a 10%
deep-set or an agreed amount of money. This is called a
down payment or a binder. The contract will include all
the details about what is to remain in the apartment, such
as furniture, appliances, carpets etc. Your deep-set is
refundable. You get it back if you are not approved by the
Board of Directors or if you cannot get the financing you
need.
6.
The interview: The buyer's real estate broker makes
the appointment with the chairman of the Board of Directors
for an interview. Try to find out, before the interview,
from your broker, who is there to give you continuous advice
and information, what the board wants to hear or likes to
see. Don't take the interview lightly! It is not automatic
that you are approved, even if you can afford the price
of the apartment.
7.
The approval: After you have all your finances together
and you have been interviewed and approved by the Board
of Director, the apartment is finally theoretically, yours.
However, There is one more step left, and that is the "closing".
8.
The "closing": The "closing" occurs
when all the negotiations are finalized. At the time of
the closing, you have a meeting at the office either of
the seller's or the purchaser's lawyer. You will need to
receive the "proprietary lease" from the seller.
The proprietary lease is the document that gives you, the
tenant-owner, the rights to use the portion of the building
that is allocable to the shares of your apartment. Read
the proprietary lease carefully. At the closing, you will
need a bank check/s, to pay the seller for the apartment.
You will need to pay the first month's maintenance. You
may also need a check to pay your lawyer his fees. You may
have some other expenses, as well, so come with a few extra
checks.
9.
The closing costs: Closing costs can be 5%-8% of
the purchase price. This includes "points" to
the lending bank or mortgage company, title insurance, title
search, inspection and survey, recording tax and homeowner's
insurance. Your real estate broker will have a list of these
fees and should give them to you before the closing.
10.
The real estate broker's fee is usually paid by the seller.
The "flip-tax", a tax representing 2% of the sale
price of the co-op, is paid to the city of New York by the
seller.
After
you have passed through the above steps, the apartment is
finally yours!
Buying
a condominium in NYC:
When
you are ready to buy a condominium, the procedure is very
similar to that of buying a co-operative. The prices, though,
may differ. When you buy a condo, it is important, at the
closing, that your lawyer requests a "title search"
to make sure that the people who are selling you the property
have proper title to it. Ask your lawyer to examine the
condo's prospectus and financial statement and potential
special assessments to make sure the building is financially
stable.
In most
cases, buying a condominium will not require you to face
an interview and a board approval as in most Co-ops. Some
condos will use the board of managers to review applications
to buy an apartment and make a decision. In these rare cases
the authority to do so will have to be empowered to the
board by the tenants and be specified in the building's
by-laws. All other steps are very similar to the co-op procedures.
|