A TIMELINE FOR PURCHASING
1. Mortgage Pre-Approval: (1 - 2 days)
A mortgage professional, preferably one who specializes in Manhattan real estate, will calculate your financials so you can determine what you can afford. Though each building is different, typically purchasing a condominium will require at least 10% down, and a cooperative will require at least 20 % down.
2. Find an apartment: (1 - 6 months)
Though the search time is highly variable, the average person sees 5-20 apartments before choosing one. Individuals who conduct a bulk of their research online typically view only 4-5 properties before deciding.
3. Negotiations: (1 hour - 2 weeks)
Once you decide to make an offer on a property, some items in the apartment may be negotiable – from rugs and curtains to washer/dryers, light fixtures and appliances. Apartments are delivered " as is and swept clean".
4. Sign a Contract: (1 - 2 weeks)
It is customary for a real estate attorney to represent each buyer and seller. The seller’s attorney draws up the contract to be examined by the buyer’s attorney. Upon agreement, the buyers sign the contract and send a check for the down-payment. The contract is binding only after the contract is signed by both parties.
5. Apply for and get a mortgage: (3 - 8 weeks)
Once the contract is executed, a commitment letter from the lender must confirm mortgage approval. The Board requires this proof of financing as part of the application package.
6. Complete a Co-op or Condo Board Package: (1 - 4 weeks)
Cooperative apartment buildings require a complete Board package to be approved and an interview to be conducted before a closing can take place. Condominiums only require a complete Board package to be approved, an interview is not usually required. In order to review a potential purchaser, the Board of Directors for a Coop demand extensive information in a Board Package. Your agent will guide you through all of the requisite materials, ensuring that all materials needed are complete and in order. Typically included in this application are: a financial statement, all requisite support for your financial statement, two years of tax returns, bank statements, letters of personal and financial reference, a letter of employment verification, the contract of sale, bank documents (if financing) indicating that your loan is in place. Your Spire agent will then forward the package to the managing agent of the building. The managing agent will inspect the package to ensure it is complete and forward it to the Board of Directors, who will then decide to interview (or reject) the applicant based on the "package."
7. If purchasing a Co-op: Board Interview (30 min – 1 hour)
Co-op boards typically meet once a month and some Boards do not meet in August. Every Board is different, but generally, a Board meeting will be held in the evening on a weeknight. Although a board interview may be granted, this does not guarantee board approval. If your application meets initial approval, you will be invited to be interviewed by the Board. Your Spire agent will prepare you for the interview. He/She will convey what to expect and coach you so as to maximize our chance for approval. After approval by the Board, the attorney will schedule a day and time convenient for all parties for the closing.
8. Receive Approval from Board: (1 day – 1 week)
The managing agent will generally alert the seller's broker when a potential buyer has passed the board.
9. Schedule a Closing: (1 - 2 weeks)
Managing agents generally set the date for closings, and lawyers for sellers and buyers coordinate with the appropriate banks on available dates and times. Your attorney will provide you with a list of checks to bring, which will typically include a second check for at least 10% of the purchasing price, and will let you know the date, time, and place of the closing.
10. Closing: (1 - 2 hours)
Bring your checkbook, making sure to have a few extra checks. Your closing should run approximately 1-2 hours, as long as everyone is on-time and all paperwork is complete and in order.
Possible delays may occur due to financing, Board approval, or closing date discrepancies. With the help of your Spire agent, such contingencies are likely to be avoided through preparation.
CHOOSING A PROPERTY TYPE
The New York City residential market consists primarily of Co-ops (75%) and Condos (25%), with Cond-ops a rare alternative (<1%). Each has distinct advantages and disadvantages. Single-family, multi-family, and investment properties are also available.
Building owned by a corporation; you are a shareholder. This is a unique form of ownership found almost exclusively in Manhattan. You, as purchaser, own stock in said corporation, which entitles you to a ‘proprietary lease.’ Generally, the larger your apartment, the more shares of the corporation you own, though factors such as location in the building, view and light are also taken into account. Co-op shareholders contribute a monthly maintenance fee to cover the building expenses, including items such as heat, hot water, insurance, staff salaries, real estate taxes, and the underlying mortgage of the building.
Real property, like owning a house. The buyer receives a deed of ownership, and owns what is ‘between the walls.’ The appeal of owning a condo is the low down payment, providing maximum financing ability and that there is typically no Board approval, though requirements are becoming stricter. Condo pricing remains 10-30% higher than for co-ops. Each unit has a separate tax lot and each purchaser must pay individual property taxes on his/her unit - these taxes are deductible. The deed also grants a small percentage of the ‘common elements’ of the building such as the halls, stairwells, basement, etc. Each owner pays a ‘common charge’ to the condominium association to pay for items such as heat, hot water, repairs and employee salaries. This monthly fee is not tax deductible.
Co-op residential with designated commercial condo space. The homebuyer is still a shareholder in a corporation – so this is still by definition a co-op. A common misconception is that cond-ops are co-ops with condo rules. However, this is not necessarily the case. While cond-ops tend to be less restrictive, the condo aspect only applies to the businesses in the building.
A building intended to house one family, (i.e., a detached stand-alone home). Single family homes are generally more expensive than co-ops or condominiums and there can be additional costs to renovate. It is worth investing in this type of property if you value complete freedom and privacy; but you also must be able to take full responsibility for any repairs or renovations that need to be done. Though a suburban staple, single-family homes make up a small fraction of NYC home sales.
A building intended to house more than one family, often managed by an investor or tenant owner. Although the initial purchase price of a two or three family home may be slightly more than the cost of a single family home, you may actually be able to borrow more money and the house may be more affordable because you will collect rent from your tenants. The rent you collect will increase your income and will provide you with more money to pay your mortgage. Therefore, the bank or mortgage lender may be more willing to take a larger mortgage or may accept a lower household income because they know that you will also be collecting rent. A relatively small number of NYC brownstones fall into this category.
Advantages/Disadvantages of Each Property Type
Co-op Board Interview Tips
With the majority of NYC apartments being co-op, the Board Interview is a required step for most homebuyers in the city. And while applicants are naturally concerned about possible rejection, the board interview is actually more formality than anything, typically resulting in approval by a wide margin.
Rest assured that simply being invited to the board interview is a good sign – meaning that you have already been vetted and appear likely to gain approval before you walk in the door. So, if you are asked to interview, your paperwork has likely already checked out.
The sit down is an opportunity for the board members to ask you specific questions about your application and get to know you better, both personally and professionally. The style of the meeting can be formal or informal, depending on the building and its members. In either case, you’ll want to incorporate the following tips as you prepare to become their newest shareholder.
1. Dress to impress and arrive promptly
Treat the meeting like a job interview in which you are the leading candidate. Act naturally and professionally.
2. Be prepared for probing questions.
The board has great latitude in the kinds of questions it can ask about your personal life. Do not react to any challenging or invasive questions. Answer all questions concisely. Never volunteer any information that you are not asked for.
3. Familiarize yourself with the details of your own application.
You should be able to quickly and concisely answer any questions asked about your application, without having to refer to it regularly. Thirty seconds of paper shuffling in response to a question about your financial standing or employment history will not inspire confidence. That said, bring a copy of the application with you just in case.
4. Couples should decide in advance who will answer certain types of questions.
For example, one of you may agree to answer all financial questions while the other will address all other questions. Try to avoid discussing your answers with your spouse in front of the Board.
5. Do not try to sell yourself.
Do not take the meeting as an opportunity to express what an amazing neighbor you are going to be. Just answer the questions that you are asked as simply as possible and let the Board direct the conversation. Applicants are rarely turned down for being boring.
6. Use these recommended responses to questions about your building participation.
Q: Are you’re interested in joining the board or becoming an active member of the building/community?
Q: When would you like to move in?
A: If we’re offered the opportunity to become shareholders, we’d love to move on .
7. Never volunteer any information you are not asked for.
Do not engage in any unsolicited conversations except for pleasantries at the beginning and end of the meeting. Avoid revealing any more information than what is specifically asked for. Oversharing is the one variable that can turn your likely approval the other way, since you could unintentionally give them cause for concern.
8. Do not ask questions of the board.
Like oversharing, questions can unintentionally convey negative information to the Board. For example: “Do you have any plans to renovate the lobby?” is the kind of seemingly innocent question which may offend the board member who was in charge of the lobby renovation or suggest that you intend to campaign for large capital expenditures in the building. If you have any additional questions, direct them to your real estate agent or your attorney. Remember, you have already agreed to purchase the apartment. There is nothing else you should need to know at this point, and if there is, save it for after your approval. If asked for questions, a better response is, ‘Building management, my broker, and attorney have already answered all of our questions so if given the opportunity to become shareholders, we’re excited to move forward’.
9. A short interview is better than a long one.
While there are no hard and fast rules, a short, cordial interview with few board questions and remarks is often indicative of an easy approval.
10. Do not expect an answer at the end of the meeting.
Most Boards do not give their decision until a day or two after the meeting. Your real estate agent and attorney will take the necessary steps to determine if you have been approved.
Following these tips will go a long way to getting you approved. In most cases, the approval is really yours to lose at this final confirmation stage. So relax and be positive. You’ve got this!
FREQUENTLY ASKED QUESTIONS
1. How does working with Spire help me?
All Spire agents are senior-level real estate experts with proven track records that meet the highest standards of market knowledge, neighborhood specialization, and integrity. Each agent specializes in niche markets that resonate with them and the people they serve, resulting in smarter solutions for buyers, sellers, landlords, investors, and developers that open up new possibilities and enrich lives. Commitment to better living for everyone we touch is what drives our success.
Your agent will work along side his/her sales manager to save you time by customizing a list of properties tailored to your financials and specifications
Your agent will make sure that you are an informed buyer by educating you about the current market, your options, the process and more
Your agent will aggressively negotiate on your behalf, making sure you get the best deal
2. Should I use multiple brokers, from different real estate firms to make sure I don’t miss any properties?
Spire agents have access to every property in NYC. Our listings department works around the clock, with access to the top databases, to make sure that our inventory is always comprehensive and current. Furthermore, Spire cooperates with numerous other agencies, sponsors and owners to guarantee that no property is overlooked. Working with only one agent not only doesn’t limit your options, but in fact makes the search process more efficient.
3. How can I have access to properties under exclusive deals with other real estate firms?
An exclusive listing means that the seller of that property is represented exclusively by his or her selling broker. Your Spire agents will be able to show you the property and represent you throughout the process. You won’t miss out on any properties or pay any extra fees.
4. Do I have to pay a broker fee?
No. Sales commissions are paid by the seller, not the buyer. When a property is co-brokered, the commission is shared between the buyer’s broker and the seller’s broker.