What questions should first time home buyers ask and what should they look out for when viewing apartments in New York City? We’ll discuss in this article some apartment viewing tips for buyers in NYC that may not be obvious to most people.
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The NYC apartment viewing is not a home inspection
This is the most important fact to keep in mind! Home inspections are uncommon for NYC condominiums and cooperative apartments because the home owner is only responsible for the interior of his or her apartment. So don’t expect to start checking out the building’s boilers and furnaces when you view an apartment!
While home inspections are common for townhouses, multi-family units and free-standing houses, they are unnecessary for most re-sale condos and co-ops in NYC. This is because the building’s management company will be responsible for maintaining the exterior and any common interior areas of the building. The cost will be split among all owners within the building depending on their pro rata share of ownership, paid through monthly maintenance, common charges or assessments.
In fact, if you were to order a home inspection for a co-op or condo in NYC, the most that the inspector will be able to do that you can’t is to test for mold.
During the final walk-through, typically done the day before or even the day of closing, you will be able to test if the outlets, appliances, lights and plumbing work.
Ask the listing agent for the square footage of the NYC apartment
This is especially important for co-op apartments where the size is often not listed. This is because many co-operatives are older buildings where the original offering plan may not have had a square footage listed, or only had one that was a rough estimate. As a result, most listing agents will decline to advertise a specific square footage number for liability reasons.
Keep in mind that listing agents may inflate the actual square footage, especially if you ask them for an estimate verbally. We’ve heard instances of listing agents’ estimates being over 20% more than the actual size of the apartment. It’s best to make your own estimation of size after you have seen a few comparable condo listings where the size is listed. The only way to get an actual square footage is to have a draftsman measure it for you.
Apartment viewing tips for condo buyers: you can verify the property’s square footage quite easily through public sources such as ACRIS or the property’s latest tax bill available on the NYC Department of Finance website. Look for the “Notice of Property Value” letter that the Department of Finance sends home owners, it will typically include information on assessed values as well as net square footage.
Ask if the board of the NYC apartment building is friendly
This is something that will be very hard for you or your attorney to due diligence unless you have a friend who actually lives in the building. The listing agent will undoubtedly say yes the board is reasonable and friendly, but you can look for clues in the way the listing agent said it to see if there might be reason for concern.
Your real estate attorney may be able to gauge how reasonable the board is by reading through the building’s board meeting minutes. If it has been accurately recorded then the back and forth between the board members may reveal if any or all of them are mentally unstable or simply vicious people.
This is one of the benefits of using a listing agent for sellers. They can have an intermediary essentially gloss over details and often blatantly lie. And often times the listing agent truly won’t know what the board is like and there is an additional layer of murkiness for the buyer to diligence.
Note: New York State laws very much favor sellers over buyers. In New York, properties are typically sold “as is” and caveat emptor (i.e. buyer beware) is the law of the land. Moreover, sellers typically do not sign a disclosure form listing defects in their property. The reasoning is because sellers are not engineers and shouldn’t be expected to know these things. As a result, sellers typically pay a $500 closing credit to the buyer in exchange for not providing a seller disclosure form.
What is the sublet policy of this NYC apartment?
This is one of the most important apartment viewing tips for buyers in NYC to remember. The sublet policy often is not listed online so you will have to ask the listing agent for it.
This will be important even if you plan to live there full time for many years. That’s because the ability to sublet your apartment dramatically improves the marketability of your home. Remember to also ask for a copy of the sublet application to see how onerous it will be if you want to sublet your apartment in the future.
Pro Tip: the sublet policy can be changed at any time by the co-op’s board of directors. That means you have an opportunity to join the board and improve the sublet policy once you are a shareholder.
Are there any upcoming assessments for this NYC apartment?
Assessments are additional levies on the owners of a building for unexpected maintenance costs, repairs or simply to top up a depleted reserve account. A replacement of an old or broken elevator can cost $150,000! The total amount of the assessment is typically spread out over many months; however, they can often be levied all at once. The assessment will be shared by the owners according to their pro rata ownership in the building.
This is because some owners will have larger apartments and as a result own a larger percentage of the building.
Pro Tip: be wary of large upcoming assessments especially if you are in a smaller building with fewer units! A large assessment could be quite meaningful if a building only has a few units.
Is there any pending litigation in the NYC apartment building?
This is very important to find out before proceeding further with an apartment to potentially purchase. Litigation, especially when it’s between shareholders and the building, can be extremely messy and expensive for all owners.
If an owner stops paying common charges on his condo, the condo board could technically put a lien for common charges on the apartment. However, this can be expensive to enforce through litigation and as a result, many buildings end up not doing anything. Thus, the cost of everyone else’s common charges goes up.
Pro Tip: No one usually wins in litigation except the lawyers who rack up large sums of fees.
Which direction do the windows face within this NYC apartment?
This question is commonly overlooked among apartment viewing tips for buyers in NYC given by most agents. Asking a listing agent whether the apartment gets good light will only get you a dubiously positive answer. Instead, consider asking the listing agent which directions the windows face. This is a simple and easily verified fact.
Depending on where you are in the city, if the windows face south or north, you may be able to get direct sunlight throughout much of the day. If the windows face east, you will get direct sunlight in the morning but no sunlight late in the day. The reverse is true if your windows face west, you will to see the sun set but won’t see it in the morning.
Is the NYC apartment building on a ground lease?
If there is a ground lease, that means the building doesn’t own the land. If that’s the case, you’ll need to figure out when the lease expires and what the terms for renewal are. Obviously if there aren’t any pre-set terms for a renewal rate and the ground lease expires soon, you should be extra careful as it could be significantly more expensive to renew the lease!
In fact, most land lease agreements will stipulate that any improvements and structures built upon the land reverts to the owner of the land if the lease is not renewed! This means if the ground lease your building sits on is not renewed, the entire building could be forfeit!
You’ll often encounter ground lease buildings in Battery Park City; however, the risk of lease renewals not happening in Battery Park City is minimal according to most real estate lawyers because the land is owned by the Battery Park City Authority, a government agency whose sole purpose is to promote and improve upon the neighborhood of Battery Park City.
Fact: did you know that the Empire State Building was built on a ground lease?
Disclosure: Hauseit and its affiliates do not provide tax, legal, financial or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, financial or accounting advice. You should consult your own tax, legal, financial and accounting advisors before engaging in any transaction. The services marketed on Hauseit.com are provided by licensed real estate brokers and other third party professional service providers. Hauseit LLC is not a licensed real estate broker nor a member of any multiple listing service (MLS).