Buying a property in New York is a major commitment and often times a very nuanced process. It can seem overwhelming and laborious – but the Pink Space team can help smooth the process out for you.Here are just a few things to anticipate when you decide it’s time to move on that property. And remember, we will be with you each step of the way.
A board of directors, elected by the tenant, owners of the co-op will interview prospective owners and will “approve” or “reject” a candidate based on their specific interests and guidelines.
The amount of money that may be financed varies from one cooperative to the next.
Some cooperatives will require substantial down payments of around 20 to 50% of the purchase price of the apartment.
The Board of Directors must approve subleasing a co-op. Each corporation has its own rules and they should be reviewed if the potential owner wants to sublet.
One of the advantages of a co-op are the tax deductions for things such as monthly maintenance, real estate taxes, and portions shares of interest on the building’s mortgage.
An approval process is usually required and will include an application package with financial disclosure, but the overall requirements are not as rigorous as co-op boards. That said, a board meeting may be required to be approved. The approval process length in time can vary, but it is usually not as long as co-op approval processes.
The market, not a board of directors, governs financing a condominium purchase, so it is usually more flexible. Generally, a buy can finance up to 90% of the purchase price.
Sub-leasing is more flexible in a condominium, so they are often the better choice for an investment property.
Condos are usually the ideal choice for non-U.S. citizen or for those with assets held outside of the U.S. Most co-ops will not approve a candidate whose funds are not in the U.S.
Offers are made orally in New York City. Your bid will be placed through your agent to either the seller or the seller’s agent.
The seller may counter the offer. Negotiations can include the price point, terms, and closing date.
The seller’s attorney will begin preparation of the contract of sale. Your attorney will examine the financial condition of the building in question.
After your attorney concludes that the financial condition is satisfactory and that the by-laws of the building are acceptable to you, you will sign the contract. At that time, you will pay a deposit, usually 10% of the purchase price. The contract and the deposit will then be forwarded to the seller for signature. The money will be held in the seller’s attorney’s escrow account until closing. It is important to note that until all parties have signed the contract and it has been delivered, the seller can still entertain and accept other offers.
You will receive the board requirements and application materials from your Pink Space agent. The documents are similar for either a condominium or cooperative, but the review process is very different. You will need to complete all required materials which often includes an application, a financial statement signed by a CPA, support for your financial statement, three years of tax returns, bank statements, letters of personal, professional, and financial reference, the contract of sale, and bank documents if you are financing, indicating that the loan is adequate and in place.
In the case of a cooperative, if your application receives initial approval, the Board or an interviewing committee will interview you.
In the case of a condominium, your application is reviewed and if it meets all requirements, it is usually approved. There is usually no need for an interview in this process.
After approval from the Board, you are ready to close!