How to Buy a New York Apartment
New York may seem like one giant megacity, but it's actually a collection of many small neighborhoods. Living in the hipster East Village is very different than living on the exclusive Upper East Side. Parts of Brooklyn are more expensive than Manhattan. Buying an apartment in Queens may be a cheaper way of getting a toehold into the New York City market. As with almost anything to do with New York, a successful plan to buy an apartment depends on strategy and money.
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Instructions
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Define your goals. Do you plan to live in the apartment for a year or the rest of your life? Do you have children and plan to send them to local schools? Are you willing to cram yourself into a studio apartment in a great location? Do you want a new building or a prewar one? Knowing what you want will help you conduct your search.
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Get your financial house in order. When a good apartment becomes available, you may find yourself competing against other potential buyers. Position yourself as a "qualified" buyer. Make sure you've straightened out any credit history problems and your down payment is in hand. Arrange to be "prequalified" by a bank or mortgage broker, meaning you have a letter from them estimating the size of the mortgage for which you're qualified.
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Find an apartment. One way is by going to a real estate agent. You can also read classified ads, talk to doormen and talk to friends. There's also that New York standby of reading through obituaries for addresses to empty apartments.
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Find a real estate attorney. You'll need one to handle the contract and attend the closing.
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Make an offer. When accepted, the seller's attorney will then draw up a contract of sale. The agreement isn't finalized until both parties sign the contract, which can create some tense moments if a potential buyer comes along with a higher offer.
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Prepare for closing. New York apartments generally fall into two categories: condos and co-ops. When you buy a co-op, you are actually buying shares in a corporation that owns a building. Before the sale is finalized, you must be approved by the co-op board. Buying a condo is more like buying a house in that you are purchasing actual property. Taxes and maintenance costs apply whether you're buying a co-op or a condo.
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Attend the closing. This is the formal meeting at which the apartment changes hands. Attorneys from the buyer, seller and bank may be present. At the end of it, you'll receive keys to your New York apartment.
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Tips & Warnings
A co-op may be a better buy if you're planning to live in the apartment for a long time. Because the co-op board is run by people who live in the building, they have an interest in maintaining the building's structure and safeguarding its value.
A condo may be a better short-term investment because rules are usually more flexible.
New York may be stricter about borrowing than other parts of the country. According to Manhattan Apartments, Inc., most co-op boards will not allow you to finance more than 75 percent of your mortgage, and they'll want to see the down payment in cash.
References
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