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Good post, thanks OP. Clearly, the average New York City real estate commission rate is astronomically high on a global and national level. I’m glad to see that you are another positive force for change in this out of touch industry!
“Many FSBO sellers believe it’s okay to push back on showing requests and only show when it’s very convenient for them.” —> this is 100% true from what I’ve experienced as an agent in NYC. What FSBO sellers don’t understand is that many of our buyers are on tight schedules. When it comes down to making the final buying decision, they will only consider the units they were able to actually see. Most of the FSBO sellers I’ve contacted always try and propose alternate viewing times, such as after work or late on Sunday after they return to the city.
Every missed appointment is a lost potential deal for the seller. This is why I prefer to work with listings which are posted in RLS. It’s easier to confirm appointments and I never have to worry about the FSBO seller renegotiating on my commission.
I am trying to attract NYC buyers for my home in Bronxville, NY- a 28 min. Metro North commute to GCS and otherwise very close to the city. Would signing up to this site be helpful?
Hi Maureen, yes please contact us to learn more!
This is fantastic – do you have options for showings? What if someone cannot take time off from work to show. Is there a reduced rate option? Is that the “agent managed listing” option on your website?
Fantastic article. Wish I read this last year. We listed with a broker but I’m fairly certain that she just sat back after it was listed and waited for the phone to ring. So little value add!
Hello, this is Giuseppi from Bergamo in Italy. My sister is moving to New York City this September. Do you have a good buyer agent who speaks Italiano who can introduce to us? I have provided my Email to you in the form. Hope to hear from you. Ciao.
Hello there, do you have any agents who speak French? This is Louis from Nice in France. I am looking to move by October. My friend Riddhi who is a banker in the city recommended you
Hey guys, I have done research into this subject and want to work with you. It seems like the discretion your partner brokers have is important. I definitely don’t want to hurt my chances of winning versus another buyer because my buyers broker is lacking in some manner, or because the listing agent doesn’t like him. How many choices if any do I have in the buyer’s broker you assign to me?
Fantastique article! Do You have Any good advice for a French speaker? Who will i be paired with? I havé checked out ôther rebate brokers but am concernéd that listing agents will refuse to work with them
Thanks for this helpful post.
The average real estate commission in NYC is way too high. Closing costs are outrageous in this city…
The problem is that it’s not any cheaper to rent in NYC either! Once you factor in 15% broker fee, moving costs, etc. it’s still probably cheaper to buy than rent in NYC over the long term (even considering buyer closing costs like the mansion tax).
I’m working with my lawyer currently to try to void my current listing agreement. Can I re-list in the meantime through Hauseit? I’m very happy with my current selling broker. She is unresponsive and claims to have a buyer, but it’s been on the market for over 40 days now. I would like the full service for 1% option. Please email me.
2.PROTECTION PERIOD – If within 90 days after the expiration of this agreement the property is sold, exchange or leased to or with any person or party to whom the property was shown during the term of the listing, Owner agrees to pay Broker and, if applicable, a Cooperating Broker the commission set forth herein as if the Broker has made the sale, exchange or lease.
My question is: regarding this clause – I have terminated my contract, am in the 90 day protection period and have been approached by someone who first saw the house during an open house held by previous realtor. Can I talk with this potential buyer during the 90 day protection period? That is, negotiate, but not sell? The clause above uses the words sold and exchange. By simply talking to the buyer now, will I owe commission to the realtor even if the actual sale takes places after the protection period has expired?
My husband and I really want to sell our home and our friend suggested we get a real estate to help us out. I didn’t know that the attorney could hand us off to their paralegal. It would be really important to ask them if we would be working with them personally then!
if a INC company punchers two 3 family new house in NYC with one contract, the sale price is $2.55M how much of transfer tax? thanks!
Thank you for posting this information.
I just dealt with a realtor, Caroline Barrientos, who posted multiple listings for a unit that my husband and I viewed under the premise of the No Fee description she provided for it, only to find that she was falsifying this information and demanding a 15% broker’s fee!
Trying to get the truth out there so people avoid dealing with crooked realtors.
Hi Jennifer – thanks for your comment, and we are sorry to hear of the troubles you experienced during your NYC rental search! Buying an apartment in NYC is typically a smoother transaction since there are fewer misleading and deceptive ‘open’ listings. You can also reduce your closing costs (i.e. save money) when buying by in NYC requesting a buyer agent commission rebate: https://www.hauseit.com/nyc-broker-commission-rebate/
P.S. We just checked out your blog over at nynomads.com – it looks like a great project. Congratulations!
This is incredible guys. I’ve had at least 3 brokers tell me that they can’t cut me a better deal because it’d be illegal, I’m not licensed as a buyer yada yada. Including one reasonably good friend who told me that it’d be against real estate “law” to help me out.
Will definitely be looking into this more. My only question is, will the seller automatically know about the rebate? I’d prefer it if the other side doesn’t know I’m getting a rebate. Don’t want to potentially mess up my deal. It’s much more important that I actually get a home vs a rebate.
This is fantastic information gentlemen. I was looking for info on selling my flat in NYC and came across your research. I think it’s quite tricky really that the US doesn’t tax on the way in, but gets you on the way out if you’re a foreigner. The estate tax is also quite shocking. I believe your President Trump calls it the Death Tax. That’s no good!
Hello there, I am currently in HKG waiting to fly to NYC for some apartment shopping. Do you know of a good buyer’s real estate broker who can work with me? Hopefully someone who can speak German as well? Deutsche ya?
Please email me when you can. I read your article and understand the discretion part and why it is important. I want a normal broker so the seller will not be annoyed at me ya? Gut please email me when you can. Danke.
I recently completed a successful FSBO. I paid 0% commission. Here’s a summary of the process I used:
1) Hire a licensed appraiser to do an appraisal of the property.
2) Check Streeteasy.com or other sites for recent local sales and talk to recent buyers, sellers, and/or RE agents to determine if it’s a buyer’s or seller’s market.
3) Based on the appraisal, the local market and whether you need to sell quickly, determine your price.
4) Gather all pertinent info for the property, such as (coop):
– # of bedrooms, bathrooms
– square footage
– year built
– financial condition, reserves, assessments, flip tax
– major projects completed
– amenities, such as storage, gym, package room, doorman, security, community room, playground, etc.
– neighborhood info, such as schools, shopping, transportation, restaurants, etc.
– corporate docs, such as Offering Plan and Amendments, By Laws, Proprietary Lease, House Rules
5) Take photos or hire a photographer. The photos should show neat, clean, uncluttered rooms with plenty of light.
6) Create and publish the listing on Streeteasy.com or sign up with an FSBO company like Hauseit.
7) Show the property privately or hold open houses.
8) Don’t begin negotiations without a satisfactory REBNY Financial Statement, Pre Approval letter and credit report.
9) Don’t accept an offer until you’re comfortable with the price and you’re certain the buyer is able to complete the transaction.
10) Don’t stop listing or showing the unit until you have a fully executed contract.
11) Make sure you have a good attorney you can trust to negotiate contract terms and handle the closing.
12) Once you have a fully executed contract, you’ll need to make up a Transaction Summary, also called a deal sheet. This is a one or two page document listing the details of the transaction and contact info for seller, buyer, attorneys, brokers and any other parties to the transaction. It should be distributed to all parties. Examples can be found online.
This is a great summary of the process from someone who was the President of their co-op board. Thank you for sharing Russ and congrats on your sale!
In my opinion co-operative apartment shareholders are not property owners and are not treated as property owners pursuant to NY State tax law. Co-ops are treated as commercial entities, not private “homes.” Therefore the new Tax Bill just passed should allow shareholders to deduct their business expenses, that is, mortgage interest on the building, not end-loans and any costs that result from administering that business.
Excellent article! This is super important info regarding home value, especially given the current loft craze
Thanks for the info. It may have been included in the legalese for §27-2058, but what about rooms with windows and ample space but below street level? If it opens to a courtyard/garden say in a multi-story coop.
Hi Ezra – great question! A basement in NYC must have at least one-half its height above curb level. The basement would also need to meet all of the requirements for light, air, sanitization and egress in addition to receiving DOB (Department of Buildings) approval for it to be considered legal. As we explained above, the ceiling height in a basement also needs to be at least 7 feet.
Does this answer your question?
For your 1% product, who pays the buyer’s agent if there’s one?
Hi Ezra, you would still want to offer something market rate to buyers’ agents, as 90% or more of home buyers are represented. We have a great article on what buyer agent fees in NYC typically are and what they can range from: https://www.hauseit.com/real-estate-buyer-agent-fees-nyc/
When and where are you looking to sell?
Never realized how high closing costs are in NYC! So informative 🙂 paying a flip tax of 1-3% on top of a 6% commission bill can wipe out 10% of my profit.
Well said, Violet! It’s true that closing costs in NYC are unreasonably high for sellers! Here is a complete list of seller closing costs in NYC: https://www.hauseit.com/closing-costs-nyc/
That was informative! It’s interesting it’s referred to as a “tax”, even though it’s technically a fee. The whole time I was reading that I was wondering why it’s referred to as a tax, but later on you clarified. That, on top of the standard taxes and commission really add to the closing costs!
Hi Andrew – it sounds like you are a well educated and informed reader! We’d love for you to join the broader discussion about NYC real estate in our forum: https://www.hauseit.com/forum/
I like your suggestion to find a real estate attorney that will be able to respond to your emails within a few emails. My husband and I are planning on buying a new house, so we are wondering how to find the best lawyer to help us. Since we’ll want our questions answered quickly, we’ll be sure to find a real estate attorney who responds to emails within a few emails.
I was talking to my best friend the other day about her search for luxury homes for sale. I wanted to learn more about the recommended way to sell these types of properties. It is cool to learn that brokers can also help in this process.
Extremely helpful for a first time investor deciding whether you really should purchase property in NYC in a LLC or whether it is just an over hyped idea. The last section which outlines the exact steps you will need to take is extremely helpful. You have saved me several thousand dollars on the publication requirement alone. Albany it is!
Fantastic article, thank you for sharing both an Excel and PDF version of the REBNY Financial Statement with us. Very helpful to be able to find this when the listing agent told us to send him a REBNY Financial Statement. We had no idea at first what he was talking about but pretended to. A Google search later, voila and we are ready to submit an offer for our dream apartment in NYC!
Well the MAJORITY of listings in dutchess county are listed in the MidHudson MLS because realtors belong to DCAR. So if your customers only advertise in the Hudson Gateway MLS and not BOTH — they stand to lose a major portion of the market.
You guys really have thought of everything. I found this article through this excellent forum topic on this topic referenced below. I think some folks just don’t have the courage or ethics to tell it as it is. New York City real estate can be a cesspool, and there are no rules at all in a best and final offer process. You are a fool if you think there are some rules or bid war tips that people will actually be bound by.
I like how you talked about how valuable nice, professional photos are when selling a home. I would want my home to be presented well to get the best amount of buyers interested. Thank you for the information about how using a phone camera will take lower quality pictures and not attract any buyers.
Very interesting article. I’ve been trying to get to the bottom of this as well as there seems to be a few Realtor organizations floating around in Dutchess County NY. But from the numbers of listings I’m seeing and the scale, it seems like the HGMLS is really becoming the de facto Dutchess County NY MLS. I was leaning towards that conclusion after about 2 minutes comparing the websites of the several MLS systems vying to be the top dog.
Curious, what do agents at either MLS system or both think about the topic? It must obviously be a drag to have to join more than one MLS.
It helped a lot when you mentioned how the real estate business is complex and a good real estate attorney will focus on a specific field. It is important to remember that doing some research and compare several attorneys can help you find the one for you. We are planning on getting some property and we want to make sure it is done properly and accurately.
Hi Patricia, I think everyone is in agreement that co op apartments are definitely not considered to be real property. That’s why they aren’t paying property taxes directly like condo owners.
In fact, it’s the cooperative corporation that is the actual real estate owner here, of the entire building in fact. Therefore it’s the coop corporation that is paying NYC real estate taxes. The co op shareholders indirectly contribute to their share of the building’s taxes through their monthly maintenance fee. And as this article states, they get a Form 1098, aka co op tax deduction letter, by Jan 31st of each year to learn what exactly they paid in terms of property taxes etc. on behalf of the building.
By the way, since you asked about the new tax reform and law, Hauseit actually came out with an updated guide on NYC real estate taxes and taxes in general, updated for the Tax Cuts & Jobs Act of 2018. https://www.hauseit.com/nyc-real-estate-taxes/
Excellent guide. Thank you. So nice to see an article that gives insight into the condo buying process in NYC which I am sure has many nuances. The rest of the search results were all ads or listings search sites.
This is the most comprehensive article I have seen on Local Law 11 for NYC and I’m an engineer by trade. Thank you for your service. I will be sharing this with my clients. Easy to reference!
Thank you for putting all this information in one place.
What about buildings erected prior to 1929? Are the rules for legal bedrooms different?
I never took into account that title company employed attorneys may not have to same goals as the client. My friend wants to purchase his first home, so I think this article may help him out. What are some other tips to finding a great real estate attorney?
If I am the owner of a co-op apt and rent it out, is that considered subletting?
Yes Amber, that’s correct! That’s because co op apartments are technically real property. Remember that the co op corporation actually owns the entire building, and you are a shareholder who holds a proprietary lease to your apartment. That makes you a tenant technically. So if you then rent out your apartment, you are subleasing it out.
I am buying a co op sponsor unit and am waiting for my offer to be accepted. It is on the smaller side, around $450,000. The two agents on both sides are confused as to the amount of transfer tax I’m expected to pay on behalf of the seller. One thinks it’s 1% while the other thinks it is 1.425%. I know there is a threshold at $500,000 at which point the amount of the transfer tax changes. Can you help and confirm? It’s really shocking that no one on either side knows the answer.
Exactly what I was looking for. Thank you for this extremely comprehensive guide for those of us New Yorkers who are new to selling their house. It’s my first time trying to sell my house and obviously it’s a pretty daunting prospect. Thank you for putting all of the steps to selling a house in NYC in one place. You guys are awesome!
Here is a mortgage commitment letter my brother recently received for a co op apartment purchase in NYC, price just under $500,000. We were a bit taken aback by all of the conditions attached to the commitment letter. Doesn’t seem like a sure thing. Wanted to share (names redacted of course) and see if the community had any advice and anything we should look out for.
Notice of Conditional Approval and Loan Conditions
We are pleased to inform you that you have been conditionally approved for a loan based on the information above and subject to the following:
– Receipt and approval of the conditions listed below in Loan Conditions.
– Verification of the information you have provided or discovered during our underwriting.
– Receipt and approval of additional or updated information we request for re-verification.
– No changes to your income or credit standing.
– No changes to the property.
– The annual percentage rate on your loan not exceeding a certain threshold set by the Truth in Lending Act and its implementing regulation.
– No changes to investor guidelines or FHA/VA requirements for insurance/guarantee.
– No changes to [Bank Name] guidelines.
If this is a purchase transaction please refer to the enclosed Commitment Letter. Review the Loan Conditions listed below for a list of items we need from you before your loan closes. Pay particular attention to documents and conditions listed in the section titled “Responsible Party” which appears under the heading “Prior to preparing closing documents”. You have 30 calendar days from the date of this letter to provide these documents and meet these conditions. Otherwise we will assume that you do not wish to proceed and will give no further consideration to your application. If you are not ready to continue at the present time, we look forward to working with you in the future.
This conditional approval is not a commitment to make a loan at any particular rate or on specific terms or for any particular period of time, nor does it guarantee the availability of the type of loan for which this Conditional Approval is given. This notice does not lock in the interest rate. You will receive a separate Interest Rate Lock-in Agreement Confirmation document which states whether your rate is locked or not. The interest rate for the loan HAS been locked, and the lock expires on 06/19/2018.
LOAN CONDITIONS (To Do Items)
The following conditions must be received and verified by [Bank Name] at each of the process steps indicated below:
Process Step: Prior to preparing closing documents;
Outstanding To Do Items for the Buyer:
– Provide documentation reflecting terms and conditions under which the funds may be withdrawn and/or borrowed for the following
– Provide current hazard insurance policy and any applicable riders or addendums, including second lienholder in second position when applicable. Must display [Bank Name] Its successors and or assigns [Name & Address] as loss payee.
– Provide documentation to support liquidation of assets from the following accounts, if needed for funds to close: [401K Company Name]
– Provide the following documentation for the sales contract: All strikeouts/alterations need to be initialed and dated by all parties. Missing Lead based paint disclosure and buyer/seller attorney review letters.
Outstanding To Do Items for the Bank:
– Obtain an appraisal/valuation of the subject property.
– Obtain evidence of clear lien and judgment search from closing attorney/agent on all applicants, property seller, and the co-op corporation.
– Obtain evidence that the condo or co-op project is approved by the [Bank Name] Project Review Office.
Process Step: Before the loan funds can be disbursed;
Outstanding To Do Items for the Buyer:
– Provide a completed and signed Form 4506-T (Request for Transcript of Tax Return) for all applicants at closing. A separate 4506-T is required for each tax return type (e.g. individual IRS form 1040 and business forms 1120, 1120S, or 1065) for all income used to qualify. Form is provided by the lender.
Outstanding To Do Items for the Bank:
– Verify that any interested party contributions do not exceed 6% of the value or the actual closing costs.
– Obtain verification of the applicant(s) identity to comply with the [Bank Name] customer identification process and the USA Patriot Act.
Would you say the coop house rules for this co op are reasonable or strict? Names redacted. Just trying to get a gauge of whether this is par for the course, or extremely onerous. New to buying a coop in NYC. Thanks guys.
Sample Coop Corporation Inc.
Building Code and Fire Code Compliance
1. The law requires that all apartments be equipped with smoke/carbon monoxide detectors at all times.
2. It is illegal and dangerous to obstruct hallways, stairwells, and entryways, or to place any object on the outside window sills. Do not leave bicycles, strollers, furniture, boxes, refuse, etc., in hallways, stairwells, trash chute closets, or vestibules. In the event a city inspector imposes a Building Code violation and levies a fine against the Corporation for such an encumbrance, the cost of removing said violation from the city’s records and the fine will be charged back to the offending party. It is also illegal to place objects on the fire escapes or on the fire escape railings. In the case of the Fire Department citing the building for a violation and imposing a fine, the costs will be charged back to the offending party.
3. The Corporation must have access to every apartment in the event of an emergency. Each resident must leave an accessible set of keys either with a neighbor or the superintendent. Apartments will only be accessed in the case of an emergency. A resident failing to provide keys will be subject to any expense incurred in the course of gaining entry to the apartment.
4. Because of safety concerns, access to the roof is prohibited without the express authorization of management or the superintendent.
5. For safety reasons, at 10:00 PM the Avatar Street and 11th Avenue basement entrances are locked and elevator access to the basement is also locked. For those tenants with garage access, you may call the elevator if you are located in the basement.
6. Tenants are not permitted to install antennae, satellite dishes, etc., on the roof or on the exterior walls of the building.
7. It is mandatory that all air conditioners that extend beyond the window sill have metal support braces for safety reasons in compliance with our insurance liability policy.
8. It is suggested that if you plan to have a relative or friend apartment-sitting while you are away, you notify management so that the super can be alerted that there will be authorized guests in your apartment during your absence.
Quality of Life
9. It is a violation of the proprietary lease for any shareholder to use his or her apartment or to allow a subtenant to use the apartment for any commercial business enterprise.
10. It is mandatory to cover 80% of apartment floors with area rugs, installed carpeting or furniture. Not included in this requirement are kitchens, bathrooms, and closets.
11. All resident-proprietary lessees (and proprietary lessees, who are subletting) must not make or permit any disturbing noises in the building or do or permit anything to be done therein, which will interfere with the rights, comfort or convenience of other lessees.
11.1. No lessee shall play or permit to be played upon any musical instrument, a sound system, a radio or television in lessee’s unit, if the same shall disturb or annoy other occupants of the building.
11.2. No construction or repair work involving noise shall be conducting in any unit except on weekdays (not including legal holidays) and only between the hours of 8:30 am and 5:00 pm (see Repairs section).
11.3. Residents must observe quiet hours, which are from 10:00 PM until 8:00 AM daily. During these hours residents are expected to refrain from excessive noise and other disruptive activities. Quiet may be defined during quiet hours as being unable to hear any noise from a room with a closed door 10 feet away, above or below.
11.4. In the event of a noise complaint, the determination as to what is considered disturbing noise will be determined by the Board of Directors and Building Management.
12. Do not allow children to play, rollerblade, skateboard, etc., in the public halls, lobbies, courtyards, basement, or on stairways, fire escapes, or elevators.
13. To minimize the inconvenience of other tenants who wish to use the elevator, moving in and moving out is allowed only during weekdays, Monday through Friday, between the hours of 9:00 AM and 5:00 PM. All moves for 36 and 58 Bacon Rd must be done through the Avatar Street entrance of 36 Bacon.
14. To avoid damage to the glass entrance doors, please use the Avatar Street entrance of 36 Bacon when using a hand truck or dolly. This applies to all furniture and appliance deliveries. You are also strongly urged to use the Avatar Street entrance when using a wheeled grocery cart.
15. Use only the basement entrances on 12th Avenue and Avatar Street to bring bicycles in and out of the building. The bicycles may only be carried through the front entrances, if the basement is locked during 10:00 PM – 7:00 AM.
16. Advertisements and illuminated signs are not allowed in windows.
17. Washing machines and dryers are not permitted in apartments.
18. Pet ownership in the building will be governed by the following rules:
18.1. Proprietary lessees may not harbor dogs as pets. Proprietary lessees may harbor other animals as pets after applying for and obtaining approval from the Board of Directors. This entire House Rule 18 applies equally to resident-proprietary lessees and to proprietary lessees who are subletting their apartment.
18.2. According to the Fair Housing Act, § 804 (f)(3)(B) renders it unlawful to discriminate because of a handicap by “a refusal to make reasonable accommodations in rules, policies, practices, or services, when such accommodations may be necessary to afford such person equal opportunity to use and enjoy a dwelling.” Fair Housing Act § 802 (h) defines handicap as: (1) A physical or mental impairment which substantially limits one or more of such person’s major life activities; (2) A record of having such an impairment; or (3) Being regarded as having such an impairment, but such term does not include current, illegal use of or addiction to a controlled substance (as defined in section 102 of the Controlled Substances Act (21 USC 802)). Consistent with the FHA policy to provide fair housing, service animals are not considered pets and are exempted from the pet policy. As service animals are not considered pets, the pet policy does not apply to them or intend to prohibit them.
18.3. So called “therapy animals” intended to provide therapeutic benefits to people through contact with the animal are not considered “service animals.” They therefore fall under the category of pets subject to House Rule 18.1.
18.4. The Board of Directors tolerates pets that were allowed and approved by the Board prior to the February 2018 revision of this House Rule. Tolerance of those particular pets is not a waiver of the Board’s objection to pets who violate this House Rule or to pets who violated the previous rule.
18.5. Proprietary lessees will a) provide proper grooming of any pets; b) ensure that a pet receives proper veterinary care when needed; c) be responsible for keeping all areas (where pets are housed) – clean, safe, and free of parasites, including worms and fleas; d) ensure that pets not disturb or annoy neighbors; e) ensure that all approved pets must be spayed or neutered, as no pet offspring are permitted.
18.6. Cat owners must place soiled litter daily into a strong, tied, plastic bag and dispose of the bag by placing it in the garbage cans provided in the basement and not utilize the garbage chute or toilet to dispose of soiled litter.
18.7. Violation of any of the provisions outlined in these rules will result in the tenant being required to remove the pet from the premises.
19. The exterminator visits the building twice each month. The sign-up sheet is posted prior to the visit in the lobby. Please allow access to your apartment during the scheduled time. The exterminator will be accompanied by a member of the building staff, if a resident leaves an apartment key and is not present during the visit.
Trash and Recycling Disposal
20. Recycling is mandatory and must be adhered to by all residents. Do not leave recyclables in the compactor room on your floor as these materials may attract cockroaches. For further information about how to sort your recyclables, refer to the information you received from the New York City Department of Sanitation. Paper (including newspapers, magazines, junk mail and other “white” paper, and small pieces of smooth and corrugated cardboard) should be disposed of in the GREEN barrel in the basement. Clean boxes made of both corrugated and smooth cardboard should be placed NEXT TO THE GREEN BARREL. Pizza boxes with food particles should be disposed of as garbage. Metal (including cans, wire hangers, and pots) should be disposed of in the BLUE barrel in the basement. Plastic (narrow-necked jugs and bottles only) should be placed in the BLUE
barrel along with metal. Juice and milk cartons should be placed in the BLUE barrel along with metal and plastic jugs. Glass should be placed in the BLUE barrel along with metal items and plastics. Broken glass or sharp metal items should be marked and placed on the side of the BLUE barrel. Non-recyclable garbage may be placed down the compactor chute, located on each floor. However, if your garbage bag will not fit in the chute, take it to the basement and place it in the GRAY barrel. Do not put glass or cat litter down the compactor chute as it is a hazard to the building staff. Broken glass should be wrapped and marked and placed next to the garbage barrels in the basement. Soiled litter must be placed daily into a strong, tied, plastic bag and put inside the garbage barrels in the basement.
Vehicles and Parking Garage
21. Residents using the garage should not store objects other than their cars in their parking space.
22. For those tenants who rent a parking space in the garage, please check for oil and fluid leaks and promptly repair them for the safety of the building.
23. For tenants who own cars, please keep your vehicle’s noise level to a minimum, whether parking in the garage or on the street. This includes prompt attention to
your car alarm, proper care of the muffler, and using the horn only in an emergency.
24. Only shareholders and residents may rent parking garage spaces; that shareholders may not sublet parking garage spaces; that residents who move out of the building
must forfeit parking garage spaces; and that upon sale of unit, parking garage spaces reverts to the Corporation.
25. Construction work in apartments done in compliance with the corporation’s Alterations Policy is permitted only during weekdays (Monday through Friday) between the hours of 8:30 AM and 5:00 PM. Construction work is not permitted on holidays or on a Monday when the holiday occurs on the weekend but is celebrated that Monday. The Board of Directors and Building Management will make the sole determination as to what days are considered holidays for purposes of this policy.
26. Shareholders assume the responsibility for the maintenance of their apartments. However, the superintendent may make certain minor repairs. A work order form, which can be found outside the superintendent’s office in the basement, should be completed. Shareholders will be responsible for the cost of any parts and materials provided by the Corporation. These items include, but are not limited to, flush valves, light fixtures, light bulbs, faucets, spindles, shower heads, piping under kitchen and bathroom sinks, door knobs and locks. The charge for materials will appear on a shareholder’s maintenance statement.
27. All resident-proprietary lessees (and proprietary lessees, who are subletting) must have co-op owner’s (renter’s) property and liability insurance.
27.1. The insurance policy must have a minimum of $25,000 in personal property coverage, and, a minimum of $200,000 in liability coverage. In addition to insured certificate holders, the insurance policy must name additional parties: 1. Sample Coop Corporation Inc.; 2. Sample Coop Management, LLC.
27.2. New residents must submit to the management company the certificate of insurance. The certificate should be submitted upon closing and prior to moving in.
27.3. Existing residents must also submit a copy of the certificate of insurance to the property management office upon annual policy renewal.
28. The building of the Lessor shall be a smoke-free building. The no-smoking policy bans the carrying or use of a burning tobacco product by any Lessee, friend, relative, visitor, or worker within any common or private area of the building. The term “smoking” shall mean inhaling, exhaling, burning, or carrying any lighted cigar, cigarette, or other tobacco product in any manner and in any form. This policy includes but is not limited to a Lessee’s guests, maintenance personnel and staff. Smoking is prohibited in the common areas of the building (including but not limited to the lobby, entryways, hallways, elevators, stairwells, basement, laundry room, building facilities, storage space and the roof), around
the building (including but not limited to the front of the building, under windows and on any of the sidewalks that wrap around the building) as well as inside each unit (including but not limited to any terrace or balcony).
29. These house rules may be added to, amended, or repealed at any time by resolution of the Board of Directors.
Hey guys, my broker sent me this sample Replacement Property Form. Is there a standard form or can it be anything approximately like this? Note that very interestingly, the relinquished property can even consist of just air rights?!
REPLACEMENT PROPERTY IDENTIFICATION NOTICE
Exchanger: [Full Name]
Relinquished Property: Air Rights for 123 Sample Avenue, New York, New York 10027
Pursuant to IRC Section 1031 which requires an exchanger to identify potential replacement property in writing on or before midnight of the 45th day from the closing date of the relinquished property, I am identifying the following properties:
1. Address: Price:
2. Address: Price:
3. Address: Price:
Urgent question. We are in a landmarked building in lower Manhattan. We just did our Local Law 11 inspection and unfortunately we were rated unsafe. Some of the higher floors apparently have loose pieces of facade. As a result we are required to install a scaffolding over the sidewalk immediately or face DOB fines.
My question is this. Do we need Landmarks Preservation Committee (LPC) approval to execute immediate repairs required per Local Law 11?
From your article, it seems that if parts of the facade need to be removed for the Local Law 11 inspection then yes you may need LPC approval. But what about repair work? The exterior will not be changed, this is just critical facade repairs that need to be done ASAP.
Thank you for your attention to this matter.
Have you contacted the building architect? That would be the first step and that’s who you need to speak with to get a straight answer on this. If this is a new building and you guys don’t have an architect yet, please get one first.
The Local Law 11 consultant only gives a pass or fail mark. By law they can’t be the one to remediate. Remediation has to be by a different party to minimize conflicts of interest. If you guys still have post closing renovations going on, check to see if the damage is a result of the renovations. I’d be surprised for a new building to already be rated unsafe so soon. If it’s the result of construction damage you may need to potentially halt work, but you may also have insurance there to cover the damages.
Question for buying a condo in NYC for your child. Can parents be on the mortgage but not on the deed? Is it possible for only the child to be on the deed as the owner, but parents are the borrowers for the mortgage loan?
I know this may cause issues for banks as what will be their collateral? Thanks!
Just read this entire article. Thank you guys for getting this information out there. Truly could not find this anywhere else after trying and searching for a good 5 minutes.
Very interesting intel on the credit scores that banks use. I am right on the cusp so it’s super helpful to know that 740 and 780 are such important limits for non conforming mortgage loans in NYC today. Thank you!!
I appreciate your advice to get a real estate attorney that specializes in that area. My husband and I want to sell our property and think that an attorney would be helpful in the process. We will have to take your advice and find one specifically working in real estate.
I like how you said to ask about how attentive and responsive the real estate lawyer will be. We are thinking of hiring a real estate lawyer for our new house. Thanks for the tips for what questions to ask a real estate lawyer.
I take issue with the comment that “there’s no real downside to renting an illegal bedroom.” With high rents and tight vacancy creates predatory behavior in which landlords/renters are exploiting desperate people without many options. It also impedes any progress towards raising our housing standards to be safe and livable (sorry but sunlight, ventilation, and fire escapes are required for livability), erodes the enforcement of legal standards, and encourages exploitation. NYC has already had a horrific period of slums, and we shouldn’t encourage a return to such conditions.
I am evaluating a HDFC coop in NYC to make an offer on. This is their flip tax policy. I know HDFC coops are harder to resell, but I didn’t realize their flip taxes are so much higher? Is this the norm? I have included the HDFC coop flip tax policies below.
The current Corporation flip tax and capital improvement policy for shareholders residing in the building for more than five (5) years is that the selling shareholder can recoup his/her original purchase price, $65,000 in capital improvements, the realtor’s fee, and an 85/15% split of the difference: with 85% going to the selling shareholder and 15% to the Corporation. Below are the calculations for ______________’s sale:
1. _________________ purchased the shares for apartment # __ on __________ for ____________.
2. _________________ is selling his shares for ____________.
3. As _______________________has resided in the building for more than five (5) years, he is entitled to $65,000 in capital improvements.
4. The seller’s realtor is due 6% of the selling price, __________________.
5. When the original purchase price of ___________, the capital improvement of __________________, and the realtor fee of $___________________ are deducted from the selling price of $_____________________, the balance is $_________________.
6. 85% of $______________________ is $___________________ and is due _________________
15% of $______________________ is $____________________ and is due the Corporation.
The seller and purchaser will be responsible for the Corporation’s attorney fees.
Thank you for suggesting that you should ask if their legal fee is all-inclusive. My husband and I are wanting to buy a house and I think we should hire an attorney to help us with this process. Hopefully, we can find one that we will work well with.
Interesting article. I will say that the only coop in the city I’m aware of that has a land lease that expires in less than 30 years is 575 Park Ave (I recall, may have forgotten the exact address). Banks won’t lend to it and as a result there’s only been all cash deals in the building. A lot of them are trades between building residents who are essentially gambling on the outcome when the land lease expires.
What will happen when the land lease actually expires? I’m not sure, but I always counsel my clients in this type of situation that they are buying a depreciating asset. My guess is that there will be litigation. Will they win? Who knows, though some residents seem to be purchasing their neighbors’ units as a bet on winning some concession. Though the way land leases are written, the land and everything that is built on it (i.e. the coop building) reverts back to the landowner if the lease is not successfully renewed.
It’ll be very interesting to see. A situation like this hasn’t happened in my years of practicing real estate here in the city. Will be an interesting case study.
Interesting comment. Do you know the terms for renewal in that land lease agreement? Are there provisions for renewal?
From your comment it seems like there is not, and there is real risk that the landlord takes the building back.
I would also point out that it’s not just the risk of a land lease expiring that you need to worry about. If you’re buying in a land lease coop or building, you also have to be wary of the lease payment reset dates and terms. Obviously the lease payments will adjust over the life of a long land lease, but will they adjust periodically based on CPI (i.e. Consumer Price Index, basically inflation) or will the lease payments adjust based on some sort of an appraisal?
You can be in big trouble if the lease payments adjust based on an appraisal. Think about it. What if the land value doubles at the next reset date? All of a sudden the maintenance for everyone in the coop building will double. The offering plan will typically stipulate how the lease payments are reset. You need to check as getting your land lease payments reset by appraisal is highly dangerous. It’s much better to have you land lease payments be reset by CPI or some other similar metric.
Lastly, you really only have to watch out for land lease buildings in Battery Park City (BPC), Roosevelt Island and a handful on the UES in my experience. Sure I’m missing a lot of areas but happy to hear other areas that folks are aware of.
Hands down the most useful article on buying a new construction condo that I have seen for buyers in NYC, and this is after about 30 minutes of research. Thank you for providing this insider perspective on how buying new construction actually works!
I had no idea that New York State was so lax on protecting consumers. I think even Florida is more protective of buyers and California is probably 10x more protective of its consumers.
It helped a lot when you mentioned how you should confirm in writing that you will be working with the attorney you choose. I can understand that doing this can help you rest assured knowing you will get the help of a professional. Personally, I would also want to take the time to do some research and compare several attorneys before choosing the one that can help you best.
Thank you for this great article. Know it’s not technically tax advice per the disclaimer, but this is an extremely useful primer on NYC real estate taxes overall when you’re not ready to speak to an accountant just yet.
Especially interesting are all the various other taxes that the NYC government charges in addition to income and property taxes. And it’s crazy that there’s a double personal income tax from just the city alone for self employed people. Why do New Yorkers stand for this UBT tax? It seems like pure double taxation, plus city level income taxes (not to mention state level) are rare to begin with.
It just shows you how uncompetitive NYC is in terms of taxes. I think the tax reform will go far in showing potential folks like myself who are considering moving to the city just how uncompetitive New York generally is vs other states like Texas or Florida.
Extremely useful and comprehensive guide for newbies like myself. This should be called buying a coop for dummies 101. Thank you for explaining the process from a real world perspective, and geared for NYC. I’ve honestly never encountered a “co-op” before coming to New York City 🙂
Very useful and different advice from all the riff raft I’ve read so far online, most of which simply suggest that I either stick a yard sign on my yard or that I should give up and hire a realtor. It’s unreal. Thank you for providing an alternative to home owners who want to preserve some of their home equity!
I have something to add to your Who Pays The Flip Tax section. To my understanding, the coop proprietary lease actually is silent and usually does not specify who actually pays the flip tax. Therefore it is simply custom that the seller pays the flip tax.
This custom is reversed in some neighborhoods like Sutton Place where buildings usually expect and ask the buyer to pay the flip tax!
Fascinating article. There’s an entire field on this which studies optimal city design, primarily so you can avoid having alleyways of darkness. It really doesn’t make a city livable if streets just don’t get any sunlight.
Bad example of city design: 10th Avenue in Manhattan, wonder why’s so dead? It’s because of the designs of the buildings! Big building blocks. Very sterile and unfriendly.
Good example of city design: Lincoln Center, very open. Or some of the new music schools up there, forgot the name, but the walls are transparent. Really opens up the city.
I heard from a lawyer friend that the duplex condo units in our building which have the lower floor below grade can’t advertise their lower level rooms as legal bedrooms. Even though they have a walk out backyard accessible from the lower level (very common by the way in Lower Manhattan neighborhoods like the West Village, Greenwich Village etc.).
He says the reason is because there’s no fire exit and it’s below grade, so it can’t be legally marketed as a bedroom if it’s on the lower level. Can you confirm?
Just read this entire article. Very informative and helpful for someone just starting out with the co op purchase process. My buyer’s agent couldn’t explain for the life of him what the definition of post closing liquidity is, and supposedly he’s a co op pro. So funny. Thank you for sharing this online with the rest of us.
Great article, just read this thoroughly as I’m going through this process now. In the how to prevent a low appraisal section, did you mean “two chances” in this sentence “doing this will give you two changes on the appraisal.”
Also, I’m pretty sure the seller can back out anyway if the mortgage contingency is triggered in any manner. Don’t think the seller needs to incentivize the buyer to back out. The seller can just back out per language in contracts, I think so at least.
Very useful article on this especially niche topic. Thank god you guys have addressed this topic. Our building (condo conversion) never got a permanent Certificate of Occupancy after closing. We’re still rolling it over every 90 days, I think because the penthouse owner is dragging out her construction/renovation work. She keeps changing her mind and redoing work. Literally a crazy person.
So as a result we STILL do not have a permanent CO. Hope no one needs to sell, and if they do at least banks will lend on it and I guess we’d have to explain it.
You should ask your lawyer about what kind of escrow they use. Ask them what happens if your contract deposit is larger than the $250,000 limit covered by the FDIC. Do they split the contract deposit up into separate accounts? Will there be a master and sub account for each client? Will it be in a cash management account where you have to sweep it before you can take it out (i.e. harder to steal)?
Does the attorney use an IOLA escrow account? I believe this type of escrow accounts sweeps all interest earned towards a fund that helps those who got their money stolen via lawyer scams.
That’s a difficult position to be in, what if the buyer’s broker insists on knowing which company you are with, what should be your answer and what if the word starts to spread that an actual broker never shows the property, I am referring to the flat rate MLS service that your company offers.
Hi Evelyn, our partner brokers are clearly listed as the listing brokers so there’s never any confusion on which firm is listing the property. Furthermore, our partner brokers are all traditional brokerage firms, some of which are quite large. Our partner brokers have many full commission listings, and in fact buyers’ agents can only see what commission is offered to them, not the overall commission structure. As a result, Agent Assisted FSBO (i.e. flat fee MLS) listings are truly mixed in with normal listings!
This is wrong: “most people do not know that all of Battery Park City is on a land lease or that the entire neighborhood is built on new land excavated from World Trade Center debris after the September 11, 2001 terrorist attacks”. Development in Battery Park City started in the 1980’s on landfill excavated from the original WTC construction in the 1970s.
The last part is interesting but a bit unclear. You are saying that a co op board in NYC will typically levy a coop tax abatement assessment equal to the amount of the abatement? So essentially it’s a bill but no money changes hands. The tax savings from the abatement are kept for the coop’s reserve fund I presume.
Is there a law prohibiting sponsors from being levied the same flip tax as other coop owners?
Carol, don’t think there’s a law per se as much as what sponsors have written in the original offering plan. Pretty much the original condo or coop offering plan allows special rights and privileges to the sponsor and sponsor units. These include the ability to rent out sponsor units indefinitely, no need for board approval and not needing to pay flip tax!
So the reason to use a buyer agent in nyc appears to be because it is free and because we need advice. That is what I have heard before. However, you also mention the possibility of a closing gift program whereby the buyer agent gives me some of the built in commission. And this is legal and not viewed as taxable income. How fascinating!
This is a fantastic article. I can’t believe how many times I’ve heard friends and buyers say they’re going to buy a coop, and not realize that just because the bank has pre-approved you for a loan does not mean that the co op board will!
Yes, it’s true folks. Co op boards have their own financial requirements, and often much stricter than banks. For example, buildings in Sutton Place I’ve heard require up to 1.5x the purchase price in post closing liquidity. Millionaires and billionaires only in that area then! Not that I would want to live there anyway.
Just got a copy of the coop lien search report. It seems that the title company also did a search on the buyer, which is very strange as I thought it was supposed to focus exclusively on the property and maybe the seller? It searched the buyer’s UCC, judgements and bankruptcies. And it also searched for names similar to the buyer’s. Is this normal practice? I’m just very surprised.
This is a great article. I could never get a clear answer on the actual difference between a buyer’s agent vs seller’s agent in NYC. The agents I’ve spoken with usually mumbled some sort of semi coherent response. Good riddance!
It’s not easy, but over the last three years my husband and I have purchased three properties right across the river in Manhattan. It’s a lot cheaper, so you can look to purchase 3 4-bedroom houses for the cost of a 1 or 2 bedroom condo in NYC. We happen to pet or house sit every day of the year, so don’t live in any of these homes, but in addition to having more living space to yourself, it’s also a good investment for those looking to get into real estate around NYC without breaking the bank.
This is a co op questionnaire that we’re using, can also be used for a condo or condop. Every lawyer can have their own version, there is no standard when it comes to an attorney questionnaire.
Corporation/Condo Name: __________________________________
Corporation/Condo Address: ________________________________
Managing Agent: _________________________________________
Managing Agent Contact: __________________________________
Managing Contact Tel.: ____________________________________
Sponsor’s Corporate Name: _________________________________
Board President: __________________________________________
Broad President Contact: ____________________________________
COOPERATIVE/CONDO UNIT INFORMATION
Unit no.: ________ No. owner occupied: _____
Unit’s % int.: ______ No.Investor/sublets: _______
Unit’s maintenance: $_________ No. Sponsor owned: _______
Total Units: __________
Total No. of Floors: _______
GENERAL PROJECT INFORMATION
Year built: _________________
New construction/renovation: _________________
Conversion? Yes __ No __ Eviction ____ or Non-Eviction ____ conversion
Permanent certificate of occupancy issued?
Can project be expanded?
Is this project subject to additional phasing and add-ons?
Building contains elevators: Yes __ No __
No. of elevators: ________
Shared Laundry Room:
Each has a washer/dryer:
Storage bins/rooms : Yes __ No __
If yes, how many? ______
Is there a waiting list :
Are pets allowed:
If yes, please provide a copy of any written policy.
Is smoking prohibited in the units?
Are there any recreational facilities or any common areas leased?
If yes, please explain:
Does any person or entity own 10% or more of the units?
If not the sponsor, name ______________________________________________________________
How many unit owners own more than 1 unit?: ____________________________________________
Is the building owned in fee simple or under a leasehold?: ____________________________________
Proprietary lease expires (if coop): ______________________________________________________
Is there a Flip Tax? _____________ What’s the percentage ________________________________
Are any units devoted to Commercial Space/Professional Space?
If Yes, what type (i.e. Garage Unit, Office Unit, Retail Units)? : _______________________
Are there parking spaces?
Assigned to the units or generally available _______________________
Are any units/apartments/rental spaces owned by the condo/coop?
Are there any special assessments in effect for the next 5 yrs?
Amount per share or total amount assessed __________________; amount still due _________
Schedule for payments __________________________________________________________
If yes, describe purpose: ___________________________________________________________
Number of owners over thirty (30) days delinquent in their assessments is: ______________
Total dollar amount outstanding is: $__________________
Number of Sponsor/Condo/Coop Association owned units delinquent on assessments: __________
Has the sponsor released voting control of the Board?
If condo, does the project’s legal documents include restrictions on a sale which would limit the free transferability of title or approval rights of the board? ( i.e. age restriction, right of first refusal, low to moderate income restrictions):
Is the Condo/Coop currently party to any litigation or public administrative action?
If yes, please explain and attach information.
Are there any mechanic’s liens filed against project/ building dept violations on the building or unit?
If yes, describe: _____________________________________________________________________
Does the Sponsor control the Board of Directors?
Is building/project insured?
Does the Owner’s association have a reserve fund separate from the operating account?
Amount in the reserve fund __________________
Have there been any short sale or foreclosure sales in the building?
Have there been any rodent/bed bugs issues? ___________________________________________
If so how was it handled or being handled?
Are there any restrictions on renting and selling the units?
Are there any law suits against the corporation or against any share holders in conjunction with their shares, if so what is the status?
What are the rules/ restrictions on renovations?
How often does the board meet? ______________________________________________________
Is there bike storage:
Is a washer/dryer permitted in the apartment?
Does the Board have a sublet policy/procedure?
Is there a written application for the sublet process?
Are there any fees or costs associated with sublet of an apartment?
Does the Corporation have any notice that there been any leaks into or out of the above unit to be purchased in the past year?
Total number of units more than 30 days delinquent on maintenances:
___________ Total $___________ amount due for more than 30 days: ________________.
Please identify which units are owned by the Sponsor _________________________________.
What capital improvements are being discussed and/or planned for the next 5 years and how are they being paid for?
When are the Corporation’s current year’s financial reports expected to be available? _____________.
What was the dollar amount for the current tax year attributed towards the real estate taxes and interest on the underlying mortgage allocated to the shares of the apartment that were deductible? ____________________
Does the Coop maintain an underlying mortgage?
If yes, what are the terms of the underlying loan (loan term, interest rate, prepayment penalties, etc.)?
• Electric charges payable by: the unit owner __; or as part of common charges __
What is the name of the company providing electric service? ______________________________.
• Water/sewer service payable by: the unit owner __; or as part of common charges __
What is the name of the company providing water/sewer service? _________________________.
• Cable service payable by: the unit owner __; or as part of common charges __
What is the name of the company providing cable service? ______________________________.
• Heat payable by: the unit owner __; or as part of common charges __
How is the Unit being heated? _____________________________________________.
• Hot water payable by: the unit owner __; or as part of common charges __
How is the hot water being provided? ______________________________.
PLEASE PROVIDE THE FOLLOWING INFORMATION IF NOT YET PROVIDED:
– Last two (2) years most Recent Independent Certified Public Accountants Financial Report
– Transfer Sales History
– Offering Plan
– Amendments to the offering plan
A jr. 4 is MOST DEFINITELY not just a walled off sleeping area, that was the dining area of a kitchen, to where the kitchen no longer has any windows. Junior 4 means just that, 4 rooms. and if anything removes the window from the kitchen, then it would no longer legally be considered a room, as it is also just a passage way which you must go through to enter another ROOM. Junior 4’s usually have a door to the kitchen (a kitchen with a window) and a door to the living area, (two entrances) and is used historically as a 1 bedroom with a dining room off the kitchen, but in modern times is almost always a 2nd bedroom. The passage to the kitchen is usually sealed off, making it more BEDROOM, but both rooms retain windows and separate entrances from the common areas. You do not need to go through either room to enter the other.
Can someone show me where an official building code/NYC code/NY code says that a bedroom needs two means of egress? Would really help me if you could
Great article but please elaborate more on the MLS field. There are tons of flat rate options but most are no better than selling FSBO. Same stigma and boycotting by traditional realtors.
There are Agent Assisted FSBO options like Hauseit in New York and also discounted full service options by other firms.
Definitely worthwhile expanding the menu a bit for your readers.
Have guys ever seen a coop apartment owner write a reference letter to their coop board on behalf of a prospective subletter? See below for a sample co op sublease reference letter:
When my current tenant, Dr. Mark Jones. decided to return to Philadelphia, I had a choice either to rent or sell my unit. I tried to sell my unit for about 3 months. However, because many units are on the market right now in the Murray Hill area, I was not able to find a buyer who was financially suitable. Therefore, I decided to rent the apartment instead and will try to sell when the market is more favorable.
Fortunately, I was able to find a suitable candidate very quickly after I listed the apartment for rent. Allow me to introduce Dr. and Mrs. Blarney. Dr. Blarney has a Ph.D. degree in Physics, and his wife is a graduate of Harvard. He has finished a postdoctoral appointment at Columbia University and has accepted a new job in New York
City. Although his current income reflects his position and the region of the country he lives in, his new job will pay $120,000 per year. Furthermore, Dr. Blarney and his wife will pay the entire year of rent ($30,500) in advance rather than in monthly installments. For these reasons, I am not concerned about the ability of Dr. Blarney and his wife to afford living in the unit. I have spoken to Dr. Blarney on the phone. He is a very polite, sophisticated gentleman, and I feel he would be an excellent addition to the community at 555 Fifth Avenue.
Thank you for taking the time to read my letter. I would humbly like to request the board approve this candidate to rent my apartment for the next twelve months.
If you have any questions, please do not hesitate to ask me.
Thanks for the tip about considering who the executor is when having an estate sale. It would be smart to consider this in advance so that everything is squared away. I want to have an estate sale, so I’ll have to consider the executor of the will first.
What I love about this article is the fact that you actually go into detail on specific tips relevant for NYC buyers on the whole apartment buying process. And I mean besides the typical stuff you see online which generically tells you to hire a Realtor and then get a pre-approval letter. Thank god for this article. Written by someone it seems who’s actually done a deal before in New York City, or who lives and works remotely close to NYC. Thank you, thank you!
Jennifer, I second that comment. I really feel for all of these Millennials who equate buying a home in NYC with buying a condo or co-op apartment only. That’s simply not the case. You can find lots of deals if you venture out of Manhattan. For example, the Bronx is really the next up and coming borough in my opinion. Lots of great houses for a few hundred thousand dollars, and not just in hot areas like Riverdale.
Thank you for the great article by the way. It’s refreshing to read an article that’s meant for New Yorkers, and apparently written by New Yorkers for once (vs someone in Bangladesh telling you about how to buy a house in NYC).
Thank you for sharing your insight. It is truly helpful.
Thank you Terri! We are flattered to receive a comment from a real estate professional from a major firm in the city. If you’d like to help answer some of our customers’ questions, please check out https://www.hauseit.com/forum
We’d love to hear from you!
I had a question on this as well, but it certainly makes sense now. The typical buyer agent commission in the city seems to be half of 6%, or 3%. So you definitely want to offer something market rate to buyers’ agents in the MLS or RLS, say 2.5% at least.
There’s obviously no way to split 1% and have buyers’ agents be interested in showing for a 0.5% split. With that said, half price for a full service listings with a real broker who isn’t a discount broker? Sounds like a deal.
Fantastic overview near the beginning of your article on the various options home sellers have in NYC. I honestly thought (I think a real estate agent buddy of mine told me this) that 6% is a law. But I did some research and the AG actually encourages negotiating, as does the Justice Department.
I think the issue is that traditional agents boycott discounters. Which is also why this concept of discreet discounting through platforms and middlemen companies like Hauseit is so interesting.
Will be considering when we decide to sell in the new few years.
Question. I’m in the process of buying into a coop. After I get board approval, is it possible for the coop board to change their minds and rescind my approval if something material happens?
How would the coop board even know? Basically, are there any contingencies or conditions where a coop board can rescind their coop board approval?
Thank you, very helpful.
Thank you for what is definitively the most comprehensive guide for buying property in NYC that I’ve seen in 15 years as a real estate professional in the city. Very helpful especially for those newbies on my team who don’t know a thing or two yet.
Thank you. Now I just send them this article and be done with it 🙂
Thank you this information. It gets really overwhelming to put together everything on your own these days as I’m getting older. Any tips especially for Seniors doing this alone?
We have a great article about common mistakes senior citizens make when buying a home in NYC: https://www.hauseit.com/senior-home-buying-mistakes-in-nyc/
Please take a look and let us know what you think!
One of the best articles I’ve ever seen in this space. Thank you guys. Really. The web is unfortunately filled with mostly spam, advertorials and random ads about men’s underwear these days.
I really just needed a comprehensive overview with tips on how to buy an apartment in NYC and you guys delivered. Have already shared this with my partner. We’ll also be discussing the buyer closing credit idea!
“you must be able to effective engage” -> “you must be able to effective->LY<- engage"
Thanks for pointing this out, Josh!
Super helpful, thanks for getting straight to the point and just telling me what the average or typical NYC real estate attorney fees are. A lot of articles will beat around the bush but you guys really went straight for the jugular.
What’s interesting is how much cheaper a real estate attorney is vs a real estate agent for your typical million plus NYC apartment. Nuts!
Awesome coop gift letter template and great read. One thing I would add, you can often avoid all of this nonsense by simply getting or giving a gift several months in advance of the purchase application.
The same goes for financing, most banks will only look for the last two months’ bank statements. If you got your gift half a year ago, no one will ask for the source of it, because it’ll be yours. No questions asked!
Just to give you a heads up, I tried to post this in a forum where folks were asking how to find a great buyer’s agent in NYC as a foreigner. Didn’t work, so I didn’t want my work to go to waste. After all, I did recommend you guys 🙂 Here it is:
I recommend working with someone experienced who will also give you a buyer closing credit or incentive at close, and not just a lame closing gift like a bottle of wine, but actually part of the buyer agent’s commission.
Hauseit is a great local company with pre-screened local agents who have already agreed to give the buyer back a large portion of the commission:
Keep in mind that it doesn’t actually cost you anything to work with a buyer’s agent. It’s use it or lose it. The commission is built into the price, and the seller pays it regardless. If you forgo your right to free buyer representation, you simply give all 6% commission to the listing agent.
I posted a link to an article below that gives some pretty good tips on how to find a great buyer’s agent, especially if you’re a foreigner.
I am in the process of subletting an apartment in a NY coop for 1 year during which I am on a sabbatical. I am from Canada, where coops are rare, so I’m surprised at the information that the Coop Board, through the rental agency, is asking me to to supply as someone who is subleasing from a shareholder. Providing letters of reference and employment seems reasonable, but should I expect to provide my Social Security # and to supply extensive financial information? What is normally required? Can the person subletting be asked to pay the sublet fee, or is this the shareholder’s responsibility? Thank you.
The rental agency you’re referring to is typically referred to as the managing agent here in New York. It’s the property management company that’s a general agent of the co-op or condo board and manages the building on the owners’ behalf.
Unfortunately, sublease applications can often times be the exact same onerous application as the purchase application. Sometimes it can be a shorter or different application. But yes, co-ops unfortunately are known to be quite intrusive and you should be prepared to reveal everything about you. Some co-ops will ask for all LLCs and organizations you are a part of, including any secret societies. You can’t make this stuff up!
The short answer is yes, it’s common for them to ask for extensive personal financial information, along with supporting documentation such as bank statements etc.
Thanks so much for the response. Most helpful, especially for someone coming from another country!
Best answer I’ve seen on the appraisal contingency for the NYC market, thank you. I’ve always been confused about the difference between the mortgage contingency, the appraisal contingency and the financing contingency. Thank you for explaining it!
I heard that there is a lien against my co op from Alba Oil for $495,000.00 trying to find out if this is true.
Hi Paulette, are you looking to sell your property? If so, it’s best to consult your real estate attorney and possibly get this cleared up before putting it on the market. If you’d like some recommendations to great attorneys who specialize in real estate in your area, please shoot us a note!
This information was extremely informative for a new real estate agent
Thank you Donna! We encourage you to participate in our industry leading Forum if you have any further questions, or if you have insights into the business. We’d love to hear from you and good luck in your career!
By this logic then all of the coop with condo rules listings that are put out there, or owners saying that it’s a condop so it’s basically a condo, all of that marketing is pure baloney then.
It’s very interesting. I’ve seen a condop listing online that had both common charges and real estate taxes listed. I wonder how that’s possible given that most condops are basically coops?
Anyway, thanks for this very informative article. Hopefully it will help a few newbie buyers not get misled by this type of coop with condo rules BS language … and force them to try to mislead someone new when it’s their turn to sell!
How much does it cost to have a local real estate agent manage my property? I don’t want to pay a big property management company some crazy percentage of my monthly rental income.
What’s reasonable and typical? Can they just earn income from renting it for me and having the tenant pay the broker fee?
I noticed condos are more expensive than those properties listed as coop apartments. What’s the difference? Why would I not just buy a coop if it’s cheaper?
Also, there seems to be a lot of demand from foreign buyers for condos, so I hope there’s less competition for coops.
Thank you for providing such information. This is very generous of you providing such vital information which is very informative. We typically just pick a local broker, but may consider this on a more institutional level. I only wonder if it’s legal for unlicensed representatives of the owner, in this case a corporation, to show homes.
About time there was some information out there for buyers facing the daunting prospect of buying a new development condo in NYC for the first time.
When I Google for this, I expect to see something actionable and specific to NYC. Buying new development in NYC is a completely different animal than buying a new build suburban house.
Pretty scary, all things considered. You need a great buyer’s agent, as well as a real estate attorney who specializes in real estate before you begin. There are way too many things a naive first time buyer will fail to notice.
By the way, I think it’s important to highlight to buyers in your article that you never should sign any contracts or exclusivity. Buyers are always “free agents” meaning they can work with any agent or no agent.
If an agent tries to get you to sign an exclusive, then you should run!
Note that I’m not talking about the agency disclosure form which isn’t a contract, that’s just a state mandated form that agents are required to present to buyers at first substantial contact.
But short story is buyers never have to sign anything, no exclusives, so you can work with whom you wish on the buy side.
Based on the above, can anyone provide a table of hypothetical values and hypothetical discounts from the original construction to today? For agument sake, say an apartment sold for $1M in 1987 what would the annual selling price and % discount look like if projected to 2048?
Buyer agent commission rebates are definitely an interesting concept, however you have to be careful in my experience. Listing agents are pretty smart in the city, and if you’re not careful they can easily detect what you are doing.
There’s no point in going against the grain. If a listing broker or seller knows about your scheme, then what’s the point? The listing agent will call every other buyer in an effort to disrupt your deal.
Better to go with a traditional broker and not rock the boat. The Hauseit concept is interesting in that regard I admit. May try it down the road.
How is new sewer pipe cost allocated in an unmetered water/wastewater condo building? Currently, water and wastewater expense is covered by monthly maintenance fees based on square footage. All units share one common pipe.
This is a great question! Can you ask this in our forum? https://www.hauseit.com/forum/forum/main-forum
Thank you for pointing out that with flat fees realtors can make cash upfront. My husband and I are needing to list our house and want to find the best flat fee agent to help us. I’ll have to do some research and find the best agent in our area.
It’s really interesting that real estate agents represent either the buyer or the seller and real estate brokers tend to just represent a corporation. I think that I would prefer to work with a real estate broker because I think they would have more connections to property listings. However, I do not know a lot about the housing market, so both agents are probably great.
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How do I negotiate to reduce a broker fee!!
Hi Augustine – great question! Can you to ask this in our forum so that others can chime in? https://www.hauseit.com/forum/forum/main-forum
Good luck out there!
I want to sell my home as soon as I can. I just don’t know how to do it! I’ll have to try hiring a real estate agent. I’ll make sure that I ask them how I should prepare my home!
My neighbor of 15 yrs has been a subtenant to our sponser/owner with $150-200 annual Inrease and comes with 1 year lease.. this is a 52 unit APT bldg with 15% shareholders. Does my neighbor have ANY rights HERE in the County of QUEENS, my 11104, thank you for your time, do Sunnyside, ny
Does the cash buyer required to obtain one?
Hi Tom – great question! The Aztech Recognition Agreement is only required if a bank is involved and you’re taking out a mortgage on the purchase. If you have other questions, we encourage you to ask them in our forum so that others can chime in: https://www.hauseit.com/forum/forum/buying-real-estate-in-ny
This is EXACTLY what I need. Who do I need to contact to obtain additional information?
Thank you very much for this information.
Hi Muriel, we recommend checking out our Agent Assisted FSBO product at https://www.hauseit.com/fsbo-nyc/ to learn more!
Please note that subletting in coops is ultimately determined by the Proprietary Lease and By-Laws. Despite the fact that many coops, especially high-end ones, are very restrictive, others are not. Also, if the By-Laws specify that the board and its management co. can only charge “reasonable” fees to cover actual expenses, then there are strict limits to sublet fees.
We just encountered a shoddy deal with a sponsored Condo. Which NYC or Federal Government Agency would be the best to report our situation to?
Hi Kerry – great question, and we’re sorry to hear you had a bad experience! Here is one resource for you to consider: https://www1.nyc.gov/nyc-resources/service/1448/co-op-or-condo-complaint
Alternatively, you may receive more answers by posting this question in the Hauseit forum: https://www.hauseit.com/forum/forum/buying-real-estate-in-ny
Kerry, if you have been unfairly duped by a real estate sponsor / developer, you can file a complaint with the NY State Attorney General: https://ag.ny.gov/complaint-forms -> Real Estate Finance Bureau Online Complaint Form
The Real Estate Finance Bureau is the sub-department within the NY State Attorney General’s Office that regulates sponsors and developers of new condominium and cooperative apartment offerings.
What is the average PSF rate for common charges for condominium properties on the upper east side NYC in buildings east of Lexington Avenue, meaning between Second and Third avenue and Third and Lexington avenue? Thank you.
My wife and I have a condo that we are thinking about selling and I didn’t understand the difference between a listing and selling agent. If I understand a listing agent represents the seller and the selling agent finds buyers for it. It seems like the distinction is small.
Hi Michael – thanks for your comment! Over 75% of buyers in NYC have a buyer’s agent. This means that the ‘selling agent’ is not the listing agent on the majority of real estate transactions in NYC.
Hi, if only myself is on the stock cert as a shareholder and i am getting a Heloc loan with my significant other who is not a share holder. Who will be on the Aztec Agreement? Myself only as the share holder? Or both myself and the other borrower(non shareholder)
Thanks for pointing out that we should pick those who specialize with this kind of field to ensure that they understand the real estate market. I will follow your advice now that we need to hire one. It’s to help us with the transaction of selling the house of my parents since the title is missing.
Hello, it’s my first time applying for a co-op apartment and I’m in need of some guidance. For the past three months I went through the process of going into contract, and once the contract was signed, I provided the application to the co-op board. The recognition agreement wasn’t specifically requested in the application package, but was requested after I submitted the packet. It was signed by myself and the lender, and I certified mailed a check for $400 as I was directed to for the recognition agreement. The process to get the recognition agreements took over two additional weeks after I had already filled the packet. I’m being told I’m denied by my realtor, although I haven’t received any response from the board. Is the recognition agreement usually requested prior to the boards aproval?
Hi Ruquaiyah – thanks for your comment, and we’re sorry to hear about the delays associated with your purchase. Candidly it sounds like you may have been rejected by the board. The listing agent (and/or your buyer’s agent) are usually the first to receive word, even before the formal notice of approval or rejection is issued by the co-op and sent to your real estate lawyer.
Feel free to post this question in our forum for more responses! https://www.hauseit.com/forum/
You should mention that the way to get around FIRPTA withholding is to have your lawyer get you a Certificate of Reduced Withholding. Essentially if you put in paperwork to IRS early before closing, showing proof of what you paid for, invoice from broker, renovation costs etc. Then the FIRPTA withholding money can sit in the attorney’s escrow vs mailing a check to the government. Much better!
Thanks for letting me know that a lot of potential renters are a bit confused between an apartment and a condo in NYC. Thanks for explaining the difference. My sister plans to move to New York next month for her new job, and she is planning to rent. I will advise her not to be confused when renting an apartment. I will let her read your article for reference.
Hi Bree – thanks for your comment! You may be interested in watching this video which talks about condos vs. apartments: https://www.youtube.com/watch?v=Yc_rozsEym8
Does IRS Letter Ruling 8646036 still hold?
Are there typically limits to the number or percentage of units that can be sublet at the same time? Does the size of the building come into play? My situation is an 8-unit self-managed co-op, and my concern is that if many units are sublet simultaneously it will place an unfair management burden on the remaining resident lessees.
This is a great question Cheryl! We believe this is more a financing issue with banks, which is why some co-ops will have limits on the percent of units that can be rented out. For example, some banks might not want to finance purchases of apartments in a building if more than 50% of the units are not owner occupied, i.e. are rented out. As a result of concerns that many banks will have, we think co-ops have decided to institute their own controls on how many units can be sublet at one time. Hope this helps!
Does the buyer’s broker see the amount of commission that I offer (2%) thru RLS database? Another words is the broker aware of what commission he is going to get before he contacts the partner brokerage? Thank you
Hi Art – great question, and yes: the buyer agent commission you are offering is posted directly in RLS for buyer agents to see. Therefore, agents are aware of what commission percentage being offered to them before reaching out and/or requesting a showing on behalf of a client!
If the buyer is ready to submit the offer, who should it be sent to? Listing agent or me (Owner)
Hi Art – this is entirely up to you, although most buyer agents and direct buyers will probably feel more comfortable sending it directly to the listing agent as per standard market practices. As an Agent Assisted FSBO seller, you’ll be forwarded all offers and inquiries received on your listing! For fastest response, feel free to post this question and any others in our customer support forum: https://www.hauseit.com/forum/forum/hauseit-customer-service-support
what is the law for renovating a co-op on Sunday using power tools and hammering
Great question Joseph! There’s isn’t a law, but rather each co-op will have its own set of building specific House Rules which will govern items like this. It’s fairly common to see co-op house rules allow general renovations to occur from Monday through Friday, from 9am to 5pm. Some co-ops may allow renovations on Saturday as well, but it’s totally case by case.
Hello my is Haja Bah want to buy NYC co-op. I have a job I’m a working person
How much can a landlord thats subleasing an aprtment go up in rent peryear with there tenant if the tenant has been subleasing for 14 years? Does it go for the same as any other building that somebody rents from which is the one and a half percent for one year lease and the two and a half percent raise for 2 year lease?
Hi Jen, it depends on whether the apartment is free market, or if it’s rent stabilized or rent controlled. If an apartment is a regular, free-market unit, then there are no price controls and rent can increase however much the landlord wants and the market will bear.
If the apartment is rent controlled or rent stabilized however, that’s a different story. Please check out our forum to learn more about rent stabilization and rent control, and check out our forum for an upcoming article on this topic. Thanks!
Earnest money as first deposit can’t be 10%. More likely 1%.
Brian, we agree it sounds high! However, in NYC it’s fairly standard to see contract deposits (i.e. earnest money deposit or check) be 10% of the contract sale price. And keep in mind this is 10% of the average $2 million apartment in New York City. Often times, this is the largest personal check a buyer has ever written in his or her life!
If someone is a resident of New York State and buys a million dollar home outside of New York, are they required to pay the New York Mansion Tax?
Hi Rick – great question! The NYC Mansion Tax only applies to the purchase of property within New York City.
I totally agree
I think that one of the most effective techniques to quickly sell a home is to let the buyer imagine how their new home will look like once they are all moved in. This can be harder than it seems, especially when looking through an empty home. However, there is a way to make this vision a reality, and it’s called virtual staging.
Virtual staging is the process of staging a home virtually, wherein graphics editors design the interior of a property based on the aesthetics and personality of the home. This is done by creating highly realistic furniture, decor and accent pieces then integrating them into an image of a vacant interior.
Is it unscrupulous for the landlord to change the date of the lease to 4 days earlier than you agreed upon and then charge the tenant a pro-rated fee/day? In addition to the 15% broker fee. Broker is saying the landlord won’t budge on this.
Hi Barb, we’re so sorry the hear that! That doesn’t seem like a nice thing to do. Like all things in NYC real estate, it’s negotiable. Assuming you haven’t signed the lease etc., you can negotiate this, and if the landlord truly won’t budge, you are free to walk away and pick a nicer apartment and landlord! We recommend having an experienced tenant’s agent guiding you through this process. Please contact us if you’d like a referral!
It’s really interesting that a buyer’s agent can help to negotiate a price down from the listed price whereas a listing agent will try to keep it at the price they originally asked for. This makes me wonder if I should start looking into a real estate agent. My husband and I are trying to buy a home because we have a baby on the way.
Does this apply to all of New York State?
Great information. It is providing knowledge of selling a house. I want to sell my house. I will follow for tips for sell my home. It is essential information of sellers and buyers. I will share your post to other users.
Even flat fee listings are completely unnecessary now in Zillow world. If your property is “nice” (and this means better than most in your area) selling at market value is very easy if you do your homework. For lazy or purposely ignorant sellers unwillingly to take responsibility and “read” simple 6th grade information about selling a “nice” property, I pray for them, because they will unknowingly fall for unscrupulous agents.
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