Only two short blocks from the W 125th Subway station with the A,B,C and D trains, shopping galore on 125th Street and a plentitude of local restaurants.

Close to Columbia University.

The buildings underlying mortgage has been paid of, the financials are in good shape and Chase Bank has put the building on their list of approved buildings.

Two bedrooms are facing the street while the livingroom faces the courtyard and has a leaded window with northern light.
This is an excellent opportunity to own Prime Harlem real estate for a very reasonable price.

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For instance, my buyer who was in contract on a condo, suddenly wasn’t able to get a mortgage because the building in which the condo he was buying, didn’t have 70% units sold. No matter there have been sales made last year, most owners have a mortgage, his apartment was appraised for more then the asking price and instead of 10% down, the minimum requirement, he put 30% down.

Nope, he was denied. To make the story a bit more complicated, the unit was stripped from its kitchen, bath and electric wiring because the sponsor’s original plan was to sell the unit renovated for a higher price. When the apartment sat on the market for over 8 months and no offers or interest came in, he decided to slash the price in half and sell it “as is”. Buyer came along after another 6 months, liked it and started the process. No way he would be able to obtain a mortgage without it being livable and so sponsor, who wanted to make the deal, offered him the key of the apartment with a special provision in the contract, allowing him to start renovating in order to obtain mortgage. Buyer agreed, signed the contract and put 10% at seller’s attorney in escrow. Seller’s attorney went on vacation and the signed contract did not return to buyers attorney for another two weeks, time that buyer could not use to start his renovations.

Meanwhile, with the new guidelines, no bank wanted to finance and attorney asked for a bit more time. Not only it was denied, a series of threatening calls and ultimatums were made and now, two weeks after the contract expired, a mortgage in place, keys of the, now finished apartment were changed and buyer is bullied into an immediate decision of paying $20K more, otherwise lose his apartment. He put in over $40 K in neccesary renovations.

Changing market, but no change in greedy people who don’t care to hurt buyers who became a victim of these new guidelines.

On the financing front, it’s more difficult for buyers to get mortgages.  Not only are qualified buyers - of yesterday - failing to qualify for today’s loans, but if they do qualify, the lenders are either asking buyers to increase their deposit or appraisers are appraising apartments with built-in market reductions.  i.e. - an appraiser came into our sales offices and confirmed that they’ll generally discount the appraisal value of an apartment by 1% for every month it’s been on the market.

Buyers should do the following to be in the best negotiating position:

1.  Get pre-approved for a mortage.  This lets you know what you can afford per month and if there are any financial skeletons in your closet that will keep you from purchasing your home.

2.  Put down as much $$ as possible as a deposit.  Cash is king in this market.   Well-priced apartments still have multiple offers and sellers go with the strongest offer (cash offer or high deposits).  Additionally, the lower you have to mortgage, the less mortgage fees you’ll have at the closing.

3.  Work with a Realtor.  Well-priced apartments don’t stay on the market.  If you’re looking for a deal, a Realtor is going to know when they initially come on the market.  They’ll also know which neighborhoods provide value and which developers and owners need  to sell.  In Manhattan, 98% of home sellers determine and pay for the buyer’s broker’s commission at closing.   Lastly, Realtors can give buyers market information only knowledgeable to the industry professionals.  They can tell you the historical and present day market numbers on your potential home, particular buildings and educated predictions on the future market.

4.  Get your financial paper work and condo/co-op board paperwork ready for immediate board interviews.  Getting a date for a board interview is in conjunction with contract negotiations, contract signing and final loan approval.  If you want to Close and move-in w/in 2 months of your offer, you have to have everything organized and ready to go.

5.   Work with a local real estate attorney, lender and Realtor.  Because real estate is local, you need a local Manhattan real estate attorney, lender and Realtor.  All the professionals will have historic information on the apartment you’re wanting to purchase.  The best way to describe the advantages of working with local professionals is to tell you one of the problems I’ve come across in the past.     I once had a buyer work with a lender who was referred to her by a friend.  The lender wasn’t knowledgeable about the local market and asked me about home owner association (HOA) fees.  HOA fees don’t exist in Manhattan (0%) and for this particular buyer who wanted to buy a co-op in the Bronx for $120k, HOA fees weren’t relevant.  I had to refer the lender to the deal sheet that I sent, prior, and again instruct him about the nuances of local real estate terms and prices.   This lender didn’t have any local offices and suggested to the buyer that she purchase a condo in the $120k budget.  $120k condos are impossible in any borough in NYC (Manhattan, Bronx, Brooklyn, Queens and Staten Island).  The lender then refused to lend to this buyer - after her offer was accepted by the co-op board…  A local lender would have known that a $120k, 1 bedroom co-op in great condition was a steal, would have had the resources to immediately see if the cooperative was on their “approved” lending list and wouldn’t have asked me irrelevant questions.  The buyer lost a great apartment, that she could afford, because of her lender.

If any readers would like to read weekly or bi-monthly lists of  residential real estate rental and sale “Deals”, please let us know.  Also let us know if you have specific real estate questions or topics you would like to read about in the future.

First on our list was:

70 Tanager Lane in Water Mill

$4,450,000.00

Agents: Larry Kuznick and Nadine Campbell

Immediately after we saw 1754 Majors Path in Southampton

Priced at $3,395,000.00, Agent: Gregory Berinato

To show you all of the listings we saw that day would be a bit to much for this blog. We learned a lot about the specific Hamptons Real Estate Market and made friends with some of the designated agents. If you are interested in purchasing a home, we’ll be happy to get you into contact with the right agent.

One of the most impressive houses we visited must have been 26 Quantuck Lane in Quogue

Priced at $11,500,000.00

Agent: Susanne Aasbo

Thanks to the group of wonderful realtors, specially to Beau Thomas Hulse, the principal broker and president of the Hamptons region of Coldwell Banker.

And last but not least to John Saule, with whom I had the pleasure to be in his car all day.

Last week we made a field trip with our office to The Solaria condominium, a new development in Riverdale.

Spacious one to five bedroom apartments with prices starting at $660,000.00 for a 786 sq ft one bedroom to $3,850,000.00 for a five bedroom, 2775 sq ft penthouse with huge roof deck.

On site parking, full service building, children’s playroom & outdoor play area, residents lounge $ media center, fitness center.

All just 20 minutes from midtown Manhattan.

Developer: Arc Developments LLC

www.solariariverdale.com

Four of the 23 haven’t opened their sales office yet.  Three of the 23 new developments have sold out.  One, the Crescent Club, is over 70% sold. While the remainder of the U.S. is still reeling under the sub-prime mortgage crisis, the Manhattan real estate continues to be healthy.  What is even more surprising is that Long Island City, an oft overlooked neighborhood of Queens, is relatively popular with investors and buyers.

While I haven’t personally visited any LIC new developments nor walked their streets and avenues, I find it intriguing that so many buyers would invest in the neighborhood.

Being a Realtor in “the City”, as Manhattan is commonly known to the locals, in hot weather is interesting.  Because, not only do we have to walk the hard streets, entering apartments with and without clients, but the planning now has to take the heat into consideration.   Not that I’m complaining… but I am whining just a little.

The planning: making appointments, speaking with listing brokers, co-ordinating 3 different schedules, and doing market research now includes taking heat exhaustion into consideration.

Tomorrow, for example, it’s going to be 86 degrees and I get to take a customer to a fifth floor walk-up (an apt. on the 5th floor - no elevator).  I figure that, although it will be a pain for me, it’s probably the best time for a buyer.  A buyer may as well see a difficult apartment in a difficult environment, because if they like it, then they’re going to love it on a normal day.

Still, every season has its difficulties.  Adina and I escorted a rental client around the Upper West Side (UWS) on a rainy windy spring day.  Winter was spent freezing, hoping listing brokers would show up on cold, bitter days. Fall was unseasonably warm, a nice time to be in real estate.

1.                  What can you afford?   Determine what you can afford and know the market rates for apartments.   It’s common for studio apartments (no bedroom) to rent at $2000.+.  Rental apartment prices will change with the neighborhood, the amenities of the building, the nearness to public transportation, and the even with the view and floor of the apartment.  Additionally, it’s common for the building to require the tenant to earn 40x the rent.  If you don’t meet this requirement, you may be rejected, you may be asked to get a guarantor, you may be asked to pay more towards your security deposit, or pre-pay your rent.

2.                  What can you live without?   Create a list of what you need and what you want.  Do you need a bedroom?  Do you really need a powder room or a washing machine in your apartment?  Do you have a pet you want to move with you?  

3.                  Where would you like to live?  If you live outside of Manhattan, make a trip to get acquainted with the city.  Manhattan is an island of many different neighborhoods, all with unique flavors and personalities.  Some examples of neighborhood names: Hell’s Kitchen, Tudor City, Alphabet City, Soho, Yorkville, and the Garment District.  Hell’s Kitchen is now known for its restaurants along 9^th Avenue, where you’ll find restaurants from all over the world.  Tudor City is a small enclave, near the United Nations and the surrounding streets have many international residents.

4.                  When should you start looking?  Vacancy rates continue to be less than 1% in some neighborhoods.  Rental listings normally become active one month before the present tenant leaves.   If you’re looking for an apartment, then you normally want to start 5-6 weeks prior to your move.   Searching for your apartment too far in advance means that you will either have to begin your lease earlier or miss out on a great apartment.  You should also be prepared to immediately apply for an apartment as good apartments may be rented the same day they’re put on the market.

5.                  How much money will you have to pay upfront?   You’ll be asked to pay a minimum of your first month’s rent and a security deposit.  There may be additional fees and requirements.  For example there may be: application fees, pet fees, moving fees, credit check fees, last month’s rent, and broker fees.

6.                  How do you find your apartment?  You can check the internet and conduct your own search, you can hire a broker (tenants will generally pay 15% commission on the 1^st year’s annual rent), or ask your friends and co-workers for vacant apartments in their building.  There are advantages to each option.  Working with a broker, for example, will get you access to new listings, they can preview listings for you, they can provide you a tour of apartments in your budget, and they can guide and organize your application process.

7.                  What shouldn’t you do?  Don’t assume what you’re reading on the Internet is real.  Craig’s List is a great resource for apartments, but it’s also a great source for scammers.  Don’t assume the person you’re emailing or speaking with has the right to rent the apartment they’re advertising or that the advertised price is correct.   Ask for information that can be verified with the NY state government or public records.

Don’t give any money up front.   If a person is demanding that you send money, prior to seeing the apartment or helping you find an apartment, then that’s a red flag. 

Basically, exercise common sense.  Scammers and con artists are everywhere.  It’s important you protect yourself and your confidential information.

8.                  What will you need when applying?  It’s safe to assume you’ll need the following: Your last 2 years of tax returns, personal and professional references, your current employment information, employment and residential history for the last 2 years and more, money for the application fee and credit check, landlord’s name and contact information, your social security number, driver’s license.   You also may need to have your state-issued identification.

These are just a few tips.  My motto is, “forewarned is forearmed.” In Manhattan real estate has become a popular spectator sport and seemingly a contact sport, in some instances.  If you exercise patience and are prepared, then you shouldn’t be as stressed in looking for your new home.

 www.nycaptsandlofts.com

2.  Get a pre-approval letter from your lender.  Manhattan is still a competitive market for sellers.  Sellers often choose the offer that provides for the most straightforward terms. i.e. - offers that are not contingent on selling your home or upon obtaining financing.

3.  As part of the bidding process, your real estate broker will forward your financial statement (also known as a statement of net worth), along with a written offer.  This statement can be as easy as filling out a standard form, which lists your income, assets and liabilities.  This financial statement can help determine whether the buyer financially qualifies to purchase in the building - important in a co-op building.

4. Work with a good real estate broker.  In Manhattan and most neighborhoods near Brooklyn, the seller pays for the buyer’s brokers commission.  Start your search with a real estate broker, who can provide you listings in your budget and neighborhood perameters.   If you sign a “buyer’s broker’s commission agreement”, your broker will be legally obligated to work in your best interest and negotiate a good offer for you.  Without this signed agreement, your broker’s loyalty is with the seller and with the commission.

5. Manhattan and Brooklyn real estate purchases involve real estate attorneys.  The buyer and the seller hire  separate real estate attorneys, to draft and negotiate the purchase contract and to investigate the building’s financials.   The cost of an attorney, for the buyer is between $700.-$1,500.   Hire an experienced real estate attorney, who practices real estate closings in Manhattan or Brooklyn.

6. Know where you want to live.  In a matter of a few blocks, east, west, south or north, neighborhoods change in value.  A 2 bedroom, 2 bath apartment may cost $50k or more in the Upper East Side than in the Financial District.    The reason for this may lie in the differences of neighborhood amenities, nearness to public transportation, school zone of the building, orientation of the apartment, etc…

Average Sales Price: $1,722,991.00 an increase of over 19% from the prior quarter and over 33.5% from 2007 1Q.

Average Price per Square Foot: $1,289.00 an increase of 9.2% over the last quarter and over 20.5% from 2007 1Q.

Median Sales Price:  $945,276.00, an increase of 11.2% from the last quarter and over 13% higher than than 2007 1Q.

Apartments are taking longer to sell - 146 days on average and the listing discounts are .4% higher than last year.

There were 6,194 units for sale, an increase of almost 5% from last year, at this time.

Also according to Miller Samuel Inc., the figures listed above are real increases.  The ultra high luxury condos of 15 Central Park West and The Plaza were not included in the market calculations.

Year-to-date every apartment - whether co-op or condo - has become more expensive in the locations of Downtown, East Side, West Side and Uptown.

What are buyers to do?