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Where To Start - If You’re Buying?

The most desirable and affordable properties can go to contract in a matter of days. You don't want to lose your best choice because you're not prepared and ready to make the necessary decision. If you are ready to commit to finding a new home, the following information will guide you through the exciting process of buying an apartment in New York City.

What is the target date for your move?

If you plan to seek mortgage financing, you should know that it takes an average of three months for a purchase to close. Therefore, you should begin your search four to six months before you wish to move.

A. Finanical Needs

Annual Income:
You can generally borrow up to about twice your gross annual income, and more, if you have significant liquid assets. Otherwise, your monthly mortgage + maintenance payments ideally should not exceed a week's gross salary.
Financial Statement:
A financial statement should be prepared by your accountant listing your net worth (assets, liabilities, salary, bonus, etc.). We submit all offers with financial substantiation and suggest having your financial statement completed as quickly as possible. With many apartments receiving multiple bids, it's not always the highest bidder, but the most "qualified" buyer whose offer is accepted.
Asset Valuation:
A down payment alone will not qualify you to buy a co-op or a condo in Manhattan. To guarantee timely collection of your maintenance payments, the Board will look for assurance against unexpected loss of income. Most cooperative buildings require liquid assets to cover a minimum of one year's maintenance and mortgage payments after closing.
Many buildings require in liquidity up to three years of combined costs.
Your Stock Group professional will guide and assist you with the specific necessary requirements.

Reserve a day or two to see apartments with your agent, have a general idea of your budget, and familiarize yourself with the many neighborhoods that are New York City.
Credit Check:
Check your credit history. Resolve any disputed claim and have it removed as soon as possible. Keep all of the documentation that shows the matter has been resolved.
Choose a Mortgage Broker:
Mortgage brokers save time and money. Your agent can assist you in selecting a mortgage broker. Be "Pre-Qualified" - "Pre-Approved": All offers submitted by us are accompanied by the buyer's pre-qualification letter if there will be financing. Being pre-qualified means that you've told the lender your income level and debt and credit information and the lender has provided an estimate of the loan you can afford. A buyer with pre-qualified loan financing has the advantage of reassuring the seller that they are serious and qualified for the purchase.

A consultation with a mortgage broker will provide you with an overview of financing options, estimated monthly payments, and necessary qualifications. The strongest offers are made with pre-approved letters. This means the lender has pulled your credit report, checked your debt-to-income ratio and has performed a detailed analysis of your financial situation. It is preferable to be pre-approved so that there will be no surprises when the credit report is received.
Select an Attorney:
It is essential to select an attorney who specializes in Manhattan real estate. In today's fast market, it's important to use a professional who's knowledgeable and can respond quickly. We can assist you in selecting a qualified real estate attorney.
Application Process:
For your mortgage and Board applications, you will need to gather financial documentation such as the last two months of your bank and brokerage statements and other proof of assets. In addition to current income verification, Boards and banks require a minimum of two years of federal income tax returns.
If you are self-employed, you will need to provide a minimum of three years of federal tax returns and a letter from your accountant verifying your current income.
Where do you want to live?
Manhattan is a city of diverse neighborhoods, all with their own unique appeal. Before you begin your search, decide what is important to you: do you want to be close to work or is proximity to public transportation sufficient? Do you prefer a residential neighborhood or a bustling hub of activity and nightlife? It is good to be open to alternative areas. Neighborhoods other than your "first choice" might be more affordable and offer many of the same features. Your agent can recommend excellent areas that you may not yet be aware of.
What's your budget?
If you are considering buying an apartment in NYC, the first step is determining your price range.

The following are the two basic rules:
1. You can generally borrow twice your annual gross income.
2. You need to have cash for a down payment.
3. Many co-ops require at least 25% down, sometimes more.

You may have heard about FHA and VA mortgages where financing is available up to 97% of the purchase price. This generally does not apply in Manhattan; most purchase deals involve conventional financing. You may be able to obtain maximum financing for a condominium, but most co-op boards do not allow more than 75%. Some buildings do not allow any financing at all.

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Average co-op prices in today's market:
Studios	$200,000 - 500,000
1 Bed Room's	$550,000 - 900,000 +
2 Bed Room's	$900,000 - $2,000,000 +
3 Bed Room's	$2,000,000 - $3,000,000 +
Condos average 25-40% higher for a comparable apt.

B. START YOUR SEARCH

"Sell yourself" as a qualified buyer.
Whether you're buying a studio or a building, there may be only a limited number of properties available in your price range. In a tight market, good properties often go to contract before they appear in the classified ads and agents always notify their serious buyers first. The best way to be first on the call list when an agent gets in a hot new listing is to prove to them you're a "ready buyer:" Have your financial documents in order, get pre-approved for mortgage financing if applicable, and take the time to thoroughly explain your needs. Be direct about your budget, timetable, and specific apartment or neighborhood priorities.
Be available and flexible to view properties.
Many of the "better" buildings permit showings only between 10 A.M. and 3 P.M. during the work week. By making yourself available to view a property during the work week, you avoid the congestion of weekend shoppers and the heavy competition of "open houses". There is nothing more exciting than being the first buyer to make an offer.

C. MAKE THE DEAL

When you find the property you want, make a verbal offer immediately.
1. Strategize with your agent about how to best present your offer to the seller. There are many factors besides price that can influence the seller's choice of buyer.
2. Verbal offers are not legally binding. When a seller accepts a verbal offer it means they are ready to do business. Your agent will place all offers in writing.
3. Once the offer is accepted, your agent will prepare a transaction summary which will be sent to both the seller's and buyer's attorneys.
4. Based on this information, the seller's attorney will prepare a contract of sale. After your attorney has reviewed and negotiated the contract and reviewed the building's financial statements, you will sign the contract. At that point, the contract and your down-payment check - customarily 10% of the contract of sale price held most often in the selling attorney's escrow account - will be sent to the seller's attorney. The seller will then execute the contract. The offer only becomes legally binding when both buyer and seller sign the contract of sale. In this market, sellers are often tempted by higher offers, so it is imperative to be prepared and make sure your attorney moves quickly to review the financials and complete the contract.

D. CLOSE THE DEAL

Unless the purchase is an "all cash" deal, you should apply for a mortgage as soon as both parties sign the contract.
The mortgage process can take up to 45 days and involves several stages:
1. Your mortgage broker needs to compile your financial information and present your loan application
2. The bank sends an appraiser to assess the value of the property
3. The underwriters review the loan package and issue a commitment.
Immediately, while your loan is being processed, review and prepare your Board package with your agent!
1. You will be provided a purchase application package which varies from building to building. A Board's financial requirements mirror those requested by the bank, so keep a copy of the mortgage application and all related documents.
2. In addition, you will need to gather letters of reference: personal, professional, financial, and, if you are currently living in a rental, a letter from your current landlord. Your agent has examples of what needs to be compiled and examples of referral letters.
3. Do not take a Board package for granted. You need to answer all questions and give a clear, concise picture of your financial qualifications. Your agent will review the collected materials, organize the presentation, write the cover letter and submit the package.
4. When you receive your mortgage/loan commitment letter, the Board package immediately is submitted to the building's Managing Agent. The Managing Agent reviews the application, checks credit and references, and submits the package to the Board.
5. The Board will review the completed package. Sometimes they may ask for additional information to evaluate the submitted information. Should the package be submitted without question a Board interview will be scheduled.
6. The timing of the interview depends on the Board: some Boards have an interview committee that meets on demand while others schedule interviews during their monthly meeting. Your broker will inform you of the time and date of the meeting and they will prepare you for the interview.
Closing is customarily scheduled after the Board has approved the package and completed the interview process.
Depending on the availability of all parties involved (managing agent, buyer and seller, both lawyers, both banks), closing usually take place within two weeks of final approval.