How to Buy A New York City Condominium

You've found the condo you’ve dreamed about, and now you're ready to move in and enjoy the sights and sounds of “The City That Never Sleeps”. Hold everything. To keep from getting stuck with a lemon, you've got to do some homework. Here are some of the most important things you need to consider before buying a condo in New York City.

Instructions

Difficulty: Moderate

Things You’ll Need:

• Buying a condo is similar to purchasing a single family home in that you may finance with a mortgage. That’s where most of the similarities end.

1. Get A Good Realtor
   
   Preparing an attractive and acceptable board package is one of the most time consuming and important steps in purchasing a co-op. The guidance of a good Realtor is the key to success here. Some people choose to take on this undertaking themselves; this could be disastrous if not done properly. The slightest mistakes will lead to the board package being rejected.
   There are some “red flags” to avoid when putting together the package:
   • Debt/Income Ratio Over 30
   o A Debt/Income Ratio above 30% will raise a red flag in the eyes of board members because it increases the risk that the buyer will default on payments in the future. ( maintenance payments are important to the board)
   
   • Declining Income Reported on Tax Returns
   o Declining income tells the board that your financial situation is deteriorating and may cause the board to ask more questions or dig deeper into your financial history before considering accepting your application.
   
   • Incomplete/Missing/Poorly Written Reference Letters
   o Reference letters are an extremely important part of the package. Many Realtors have told me that a lot of condo boards put a lot of weight on this piece of the board package.
2. Check Out The Association
   
   While they have an obligation to check you out, you also have a right to check them out. This is important, it’s best to know up front what type of people you will have to interact with, or put up with later. If possible try attending a meeting, some of these associations are run by know it alls, busy bodies, and people who have created their own little fiefdoms.
   Ask to get a copy of the minutes of the condo association board meetings so that you can read through them. It’s a good idea to see what the owners have discussed or complained about at these meetings. For example if everyone was complaining about plumbing problems or the upkeep of the facilities or grounds, you know that the complex might be having management difficulties.
   Even if there aren't any complaints, a review of the minutes will enlighten you as to what types of things are of importance or major capital projects are under way at the complex.
3. SELECTING AN ATTORNEY
   
   When selecting an attorney you should look for an experienced, quick-moving lawyer who can move from accepted offer to signed contract smoothly; preferably one who is in New York and whose practice concentrates on real estate transactions. You should also make sure they will be patient enough to explain the process as you move through it.
   There are many attorneys who are on condominium boards themselves, represent condo boards, or specialize in condominium transactions, this type of attorney will be well versed in condominium transactions and be able to steer you down the winding road that is a condominium purchase.
4. Can your Mortgage Broker make money grow on trees? Finding A Mortgage Lender
   
   Purchasing a property in New York City can be a bank breaking experience. The normal policy followed by New York City Real Estate Brokers of requiring pre-approvals for a mortgage prior to showing properties, are apropos.
   
   Experienced buyers will have a tough time in the current credit climate, and first-time buyers looking to enter the New York City mortgage market without a cursory knowledge of mortgages or the advice of a trusted Mortgage Advisor are asking to get burned.
   
   Many people are under the mistaken impression that the process requires them to first identify a property to purchase, then go about finding a mortgage. When looking for real estate in New York nothing could be further from reality. Prudent financial sense would dictate that a buyer / borrower should first assess what they can afford prior to setting out to search for a property to buy.
   
   The financial services industry has gone through a revolution over the last year and so the old traditional rules of the mortgage game have been washed away to be replaced by one word – CAUTION
   
   Caution for buyers, caution for lenders, caution in the secondary markets, there's plenty of caution to go around. Over the past number of years exotic mortgages have replaced traditional 30 year fixed rate products and helped to create the current mortgage market debacle. Programs requiring less documentation or no income verification have taken a hit and are rarely available in today's market. The infamous 80-20 loan has gone the way of the dinosaur, and 100% financing is nearly a thing of the past.
   
   Although there are still a myriad of financial options available for a qualified borrowers, one would be well advised to get the advice of a trustworthy Mortgage Advisor.
   
   Only if you are armed with the full knowledge of the nature of the financial obligation you are undertaking can you truly be prepared to step in with both feet.
   
   It is important to get competent and honest mortgage advice from professional mortgage companies or brokers, especially in New York City where high housing prices can have a great effect on mortgage rates.

Tips & Warnings

• The housing boom in New York City is still alive and well, and chock full of investment opportunities. Sometimes in hurry to cash in, buyers forget to consider things like mortgage tax, interest rates and other various expenses, title issues, property taxes and closing costs, etc...
• It is important to get competent and honest mortgage advice from professional mortgage companies or brokers, especially in New York City where high housing prices can have a great effect on mortgage rates. In closing, the housing boom in New York City is still alive and well, and chock full of investment opportunities.
• It is worth repeating CAUTION is the word of the day. Find a good Mortgage Advisor and be sure to get educated on what is available for your situation.