Steps To Buying An Apartment

 Determine your budget
How much do you want to spend? How much can you afford? Consult a Mortgage Broker to help you determine this, and obtain a Pre-qualification Financing letter. This letter, issued by your Mortgage Broker will not only indicate how much the bank will probably be willing to loan you, but also will help later when bidding to show that you are a qualified, serious buyer.This might be a good time to select a real estate lawyer who will represent you in your purchase: be sure to use a lawyer who is extremely knowledgeable of Real Estate law in New York.
 Select your broker
Working with one, professional broker is wisest. Personal referrals help. If you commit to one broker and ask them for their undivided attention and commitment to finding you the best property. That broker, knowing you are committed, will go the extra mile to please you. Most listings are shared, and a good broker can get you into see every apartment on the market.
 Your wish list
What do you want from your living space? Location? Size? Specifics? Do you have pets?
 Look at apartments
The more you see, the more you learn. By working with an experienced, knowledgeable broker, you could save a substantial amount of time, only looking at apartments that meet you specific needs, and having the many questions about the building, location, comparable apartments on the market and recent sales answered quickly. Most buyers if working with a good broker see between 10 and 30 apartments, depending on market conditions and your specific tastes and needs.
 Negotiating
Negotiating on the apartment + getting an accepted offer: Negotiability varies from apartment to apartment, depending mostly on market conditions. An accepted offer does not necessarily secure the apartment for you……Until you have a fully executed contract from both the seller and buyer, you do not ‘have’ the apartment. Apartments are usually delivered ‘as is’ with working appliances, broom-swept. If you wish to keep any fixtures or furnishings, you should have these clearly itemized and specified in the contract of sale
 Signing the contract
In New York City, both the Buyer and Seller are represented by a Lawyer. The seller’s lawyer issues a contract to the buyer’s lawyer, along with all necessary documents pertaining to the building’s financials, meeting minutes, by-laws and legal structure. The buyer’s lawyer reviews all this material, and both lawyers negotiate any changes to the contract. Once the buyer’s lawyer is comfortable with the contract, the buyer/s meet to sign the contract and issue a 10% deposit check which is held in the seller’s attorney’s escrow account until closing. Once the signed contract is received with the 10% deposit, the seller/s signs too, thus fully executing the contract. Contingencies in the contract can include Financing, Board Approval, Closing dates, etc. The quicker you sign the contract, the better your chances of ‘securing’ the purchase. Transfer of ownership, however, only takes place upon closing.
 Financing
If financing, a mortgage application has to be made to receive a Commitment Letter from the bank or lender. The application can only be completed once the contract is fully executed. To pass the Board (either Condo or Co-Op) you must produce a Commitment letter with your application.
 Board Package / Condo Application
Cooperative buildings require a completed Board package. Each building has different requirements, and a professional broker will guide you through the process. Most Boards require you to fully disclose your financial assets and income, providing supporting documentation, current salary, the past 3 years Federal tax returns, credit history and personal and business reference letters. Buyers who are unwilling to divulge this information are in a better position to purchase a Condominium, although many Condominiums require a lot of this information too. If you are not financing, this procedure could take 2-4 weeks.
 Submit Board Package / Condo Application
The Board package is reviewed, fine-tuned and duplicated for all the Board Members of the building by your broker who will do the best to present you in the most appropriate manner for this specific building. The package is then submitted to the building’s Managing Agent for review. The Managing Agent distributes the package to the Board Members for their review.
 Meet with Co-op or Condo Board for Interview
Typically, most Co-op boards meet once a month. Condo’s usually assign one or a few members to ‘introduce’ you to the building. The Co-op Board may grant an interview, but can decline your application for grounds that may never be revealed to you. The Condo Board, however, can only exercise their right of first refusal, and have the building purchase the apartment instead of you. This is extremely unlikely. A professional broker will guide you through potential questions and answers, and give you a rough profile of the composition of the Board.
 Board Approval / Waiver of Right of First Refusal
The Managing Agent usually advises you as to whether you have been approved or not.
 Schedule the Closing
The managing agent, lawyers, banks, etc co-ordinate a mutually agreeable closing date, time and location. Your broker and Lawyer will advise you of where to be, when and with what.
 The Closing
At the closing, the buyer pays the additional down payment, bank fees, taxes, lawyers fees, etc and signs various documents to transfer ownership of the apartment. The process ends with handshakes, congratulations, and keys to your new home.

Closing Costs

For Condominiums

Attorney

$ 1,500 – $ 5,000 +

Bank fees (if financing):

Points:

0 – 2% of loan value (optional)

Credit check, application, etc:

$ 300.00

Bank Attorney:

$ 650.00 to $ 750.00

Short Term Interest:

Up to 1 month

Tax Escrows:

2 to 6 months

Bank Underwriting fees:

$ 350.00

Appraisal Fees:

$ 300.00 to $ 750. 00 (depends on the price of the apartment)

Mortgage Tax

1.80% of loan amount on loans under $ 500,000.00;

1.925% of loan amount on loans over $ 500,001.00

Mortgage Title Insurance:

Approx. $ 130.00 per $ 100,000.00

Recording Fees:

$ 250.00 to $ 750.00

Fee Title Insurance:

Approx. $ 450.00 per $ 100,000.00

Violation Search:

$ 170.00

Managing Agent Fee:

$ 250.00

Common Charge Adjustment:

1 Month’s worth

Real Estate Tax adjustment:

1 – 3 Months

Mansion Tax:

1% for Selling Prices over $ 1,000,000.00

For Co-operatives

Attorney:

$ 1,500 – $ 5,000 +

Bank fees (if financing):

Points:

0 – 2% of loan value (optional)

Credit check, application, etc:

$ 300.00

Bank Attorney:

$ 650.00 to $ 750.00

Short Term Interest:

Up to 1 month

UCC-1 Filing Fee:

$20.00

Bank Underwriting fees:

$ 350.00

Appraisal Fees:

$ 300.00 to $ 750.00 (depends on the price of the apartment)

Move-in Deposit:

$ 500.00

Lien Search:

$ 250.00

Maintenance Adjustment:

1 Month

Real Estate Tax adjustment:

1 – 3 Months

Mansion Tax:

1% for Selling Prices over $ 1,000,000.00

Cost Analysis

Below, you can calculate your net monthly cost of ownership based on the purchase price, interest rate for a 30 year loan, amount of down payment, carrying charges & taxes for condos or maintenance & % of maintenance tax deductibility for co-ops and your income tax bracket. Please fill in all data in blue and the system will calculate automatically your net monthly cost. For condos, fill Maintenance and Taxes (Tax Deductible Maintenance is 0). For co-ops, fill Maintenance/CC’s and Tax Deductible Maintenance, while Property Tax is 0.

Purchase Price $ Maintenance/CC’s $
Downpayment $ Tax Deductible Maintenance
Mortgage Amount Property Tax $
Mortgage Rate Income Tax bracket
Mortgage Payment Mortgage Interest
Maintenance Payment Deductible Maintenance
Tax Payment Property Taxes
Total Expenses Total Tax Deductible
Total Tax Saving
Net Monthly Cost Net Monthly Expense*

* Monthly cost less repayment of principal on mortgage.