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5 Essential Steps to Sell Your Apartment in NYC

 

So, you’ve decided to sell your home in New York City. Congratulations! While this is typically an exciting time, it can also be overwhelming as there is much planning and effort that goes into selling a home. Thank goodness NYC is among the most investor-friendly cities in the world for residential real estate, with homes perennially appreciating in value. This means you are likely to sell your NYC apartment at a higher price than you originally paid for it. Of course, market conditions do change from time to time, alternately favoring buyers or sellers. But the long-term trajectory is one of rising value.

Whether you are looking to start a family and need some more space, moving to another city, or simply moving from one neighborhood to another, the end goal is the same: get the highest price in the shortest time frame possible. Doing this effectively requires a smart strategy.

Following are the 5 Essential Steps to Sell Your Apartment in NYC, along with expert tips to help you maximize your sale:*

  1. Get a Good Team Together
    While it is possible to market your property on your own (i.e, for sale by owner), research shows this is not a smart strategy, as it typically takes longer to sell and yields a lower price. Rather, the surest way to speed the selling process and command top dollar for your property is to work with an experienced broker and real estate attorney. Your broker will ensure your property gets maximum exposure on all relevant advertising platforms and within their own buyer network, as well as provide pricing and negotiation expertise. In fact, a good agent will give you expert guidance at every stage of the sales process. Your real estate attorney will handle any potential legal issues that arise. This could include any title claims against the property, outstanding loan payments that must be addressed, or sorting out any complicated paperwork. Your team is required by law to operate in your best interest at all times, which should make your home-selling journey seamless and worry free.
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  2. Effectively Market Your Home
    When it comes to marketing your home, nothing is more important than effective pricing. List your home too high and nobody will call, which in itself causes several problems. The longer your property is on the market without a sale, the less desirable it becomes and the less leverage you will have in negotiation. List it too low, and it could cost you dearly in return on investment. That said, the most common and effective pricing strategy is to list the home just slightly below its appraised value. This will help to generate a steady flow of prospective buyers and can lead to competitive bidding that raises the price considerably.It is also essential to stage your home for marketing photos and showings, including any simple renovations known to help attract buyers. Expert advice is critical here, as some upgrades are worth the time and money, while others are not. As a general rule, you’ll want to sell the home as is, but with more appealing decor. If you could only do one thing to upgrade your home … paint the walls. Nothing freshens up a home more than this. You will also want to declutter, remove all photos and other personal effects, and use very neutral but modern furnishings (which you can rent if necessary). You can learn more about effective staging here.Your agent will also help you get maximum global advertising exposure, including listing your home in the OLR database, StreetEasy, Zillow, Trulia, PropertyShark, the broker’s website, social media, email campaigns and more. Your agent will then help qualify buyers and conduct showings and open houses.
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  3. Accept an Offer and Negotiate Contract
    Once any offers come in, your agent will help you move the sale into the contract phase. Good real estate agents take their fiduciary responsibility seriously. They will not only try to negotiate in your favor, but will also use proven tactics to get it done. Strategies such as “price anchoring” and negotiating in person rather than on the phone are proven to yield better results. A good agent will have well-developed negotiation skills specifically suited for NYC real estate transactions. Moving to the contract phase is a significant step forward in selling your apartment, but it is not yet a done deal. Once in contract, a buyer will typically request a Home Inspection, which could affect the deal should there be any surprises. If the buyer will be taking out a mortgage, the bank will request a Property Appraisal, since they only lend money based on appraised value. This shouldn’t affect the deal, however, since most appraisals come in relatively close to the contract amount.
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  4. Await Board Approval
    The final hurdle to selling your home is awaiting your buyer’s Board Approval, which is required by both co-ops and condos (though co-ops are notoriously more stringent). At this stage, the buyer collects all the required financial documents (which can vary by property), including tax returns, proof of income, income-to-debt ratio, etc., and completes and submits the Board Package. If your buyer has been forthcoming throughout the process, this should go through without a hitch. Reasons for being turned down include such things as: the buyer doesn’t have enough money, they lied, they have a weak job history, or the deal itself is deemed unfair, among others.
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  5. Schedule Closing
    The Final Walk-Through and Closing are typically formalities. It’s a safe bet at this point that the deal will now close, although it won’t be official until the final forms are signed on closing day.The final walk-thru is the buyer’s last chance to see the unit before closing and confirm that nothing has significantly changed in the unit since they signed the contract. The Closing itself includes representatives in fancy suits, mounds of paperwork and lots of check signing, as this is when closing costs are paid and the deed to the property is exchanged. While there is typically a frenetic energy in the room, the day is not a stressful one. Rather it is typically exciting, relieving and joyful all at once.

 

Selling your apartment in NYC is a journey that can take several months to complete. By following these 5 essential steps, you’ll be well on your way to a successful sale.

For more information on selling your apartment in NYC, or any real estate questions you may have, contact Batra Group at (646) 202-1877

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The Difference Between Condos and Co-ops

 

Buying a home is an exciting journey, especially in the capital of the world. For first-time New York City homebuyers, however, there is typically much to learn before the search even begins. Not only do property values and local flavor differ from borough to borough, but also from neighborhood to neighborhood and block to block.

Perhaps the best example of how unique the New York City market is lies in the types of housing it sells – primarily condos and co-ops. Most people are familiar with condos and use the term to describe any apartment for sale within a multi-unit property. But co-ops can also be described this way. And while co-ops are relatively scarce worldwide, they make up 75% of homes for sale in New York City. So it’s more than likely than not that you will come across one in your apartment search. So what are they exactly? And how do they differ from condos?

Following are the key differences between condos and co-ops to help you better prepare for buying an apartment in New York City:

 

Condominiums

When you buy a condo, you become the owner of that specific property. You generally have jurisdiction over what you do with the property, so long as it is within the city’s zoning laws and condo board rules. Want to add or remove a wall? Change the flooring from carpets to hardwood? Maybe upgrade the kitchen and its appliances? These options are all available to you as the owner of the property.

Condos tend to more expensive per square foot, making them more costly overall than co-ops. But they are typically easier to finance, as banks prefer them. Both condos and co-ops typically require a 20% down payment, although some banks require 25% or more for co-ops. Condo fees are usually lower, while property taxes tend to be higher. The tax advantages of owning a condo or a co-op are about the same. All said, the overall cost is 10-40% higher for condos, but that also typically comes with a higher return on investment.

 

Cooperatives

With co-ops, you are not actually buying a piece of tangible property. Instead, you are buying shares of a corporation that owns the building. Think of it as if you’re buying stock in a company. The actual size and price of your unit determines your share, but you still don’t own it as your individual property. This has large implications for you as a buyer, as your actions as a resident are limited by the collective co-op board of the building. This means that the executive board has a say in what you do with your unit, requiring you to adhere to the building’s rules.

While this may appear to be constricting, there are actually several advantages in having a co-op board. The board is there to ensure the stability of the building. Their responsibilities include keeping turnover down, screening tenants, and taking care of simple maintenance work. This can be very appealing, as you’ll have fewer concerns about neighbors and maintenance.

Co-ops tend to be cheaper per square foot. They typically offer buyers more control as an individual shareholder and often have lower closing costs. It is typically a bit harder to obtain a mortgage for a co-op, with some lenders requiring higher down payments. Monthly fees also tend to be higher and can include payments for the building’s underlying mortgage, property taxes, amenities, maintenance, utilities and security. Property taxes are typically lower, whitle tax benefits are about the same.

 

Summary

  • While condos offer more autonomy and a better return on investment, their higher cost and lower inventory makes them less popular than co-ops.
  • It is likely that you’ll come across many more co-ops throughout your home buying search, as they make up 75% of NYC homes for sale.
  • By taking the time to understand the differences between condos and co-ops, you’ll be more prepared to work with an agent to find the apartment that’s right for you.

 

For more information on condos, co-ops or any real estate questions you may have, contact Batra Group at (646) 202-1877.

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Buying vs. Renting an Apartment in NYC

 

It’s the age old question. Does it make more sense to buy or rent an apartment in New York City? The answer is a personal one and depends largely on the time and money you have to invest.

Importantly, New York City is among the most expensive places to live in the US, second only to San Francisco. According to 2019 Miller Samuel Reports, the median rent for a one-bedroom is $3,500 in Manhattan, $2,852 in Brooklyn and $3,000 in Queens. The median purchase price is $1,075,000 in Manhattan, $765,000 in Brooklyn and $550,000 in Queens. For most NYC residents, the option to buy just isn’t on the table. But for those in a more favorable financial situation, the question of buying vs. renting is an important one that can significantly affect their financial health.

Here are 3 important factors to consider when deciding whether you should buy or rent an apartment in NYC:*

  1. Short vs. Long Term
    If you only plan to stay in your apartment for a couple of years, and you don’t have a spare million dollars for an all cash deal, renting is the better option. Roughly 5.4 million people (63% of residents) in New York City rent their homes, so you’ll be in good company. Not only is it more cost-effective for the short-term, but it also saves you the effort of the 3-6 month journey to buy and then again sell your home. If you were to buy, you would be just two years into a 15- or 30-year mortgage, which wouldn’t have built enough equity to make money in the transaction.
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  2. The Tipping Point
    When renting an apartment, there comes a time when the cost of renting exceeds the cost of owning. StreetEasy calls this the tipping point, which in New York City can take an average of 5-6 years to reach. If you do plan to stay in the same apartment that long, and you do have the funds, buying is the smarter option. And this is true not only for the cost but also the equity. Each mortgage payment is an investment in real property that you can sell or borrow against in the future, while each rent payment is money you’ll never see again. A great way to determine the tipping point for your apartment is to use a Buy vs. Rent Calculator.
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  3. Money & Mortgages
    Some people find themselves just at the borderline of being able to buy. They may have some or all of the required down payment (typically 20%), a good job and decent credit. In this case, you really have to sort through the numbers. For example, if you are looking to buy a home worth $800,000, the required down payment would be $160,000. Now there are a number of city and federal programs that offer assistance with down payments, particularly for first-time homebuyers. In some cases, they can reduce it to as low as 3.5%. However, this will likely affect the mortgage rate you get and whether you will be required to buy mortgage insurance. Of course with a lower down-payment the balance will be that much higher, which typically results in higher monthly payments. It’s not unlike being offered a credit card with an extremely high APR rate because of a low credit score. The question is whether you will be in over your head or can find a way to make it work. Many pundits agree that if you don’t yet have the money needed up front, it is probably a sign that it’s too early for you to buy.

 

There is no one-size-fits-all solution to decide whether you should rent or buy an apartment in NYC. But by taking these expert tips into consideration, you will be well on your way to making the decision that best suits your needs.

For more information on renting or buying a home in NYC, or any real estate questions you may have, contact Batra Group at (646) 202-1877