NY MONEY DIARY

https://streeteasy.com/talk/discussion/28861-complete-list-of-land-lease-buidlings-in-manhattan

Hot Sheet:

Also commonly known as ground lease, where owners of the condo/co-op do not own the land their building sits on. Instead, they rent it from the landowner.

About 100 land lease properties in the cityLand owner pays property taxes, not the co-op or condo owners.

Monthly common charges/maintenance fees are higher for land-lease buildings as it will include the leasing cost.

The co-op or condo board will typically try to renew the lease, but could mean hikes in charges after.

If the value of the land goes up and is determined as such by an appraiser, owners will face a charge hike as well.

Upon expiration, the land, building and any other improvements on the land revert to the owner usually.

When you really want to buy in NYC, but do not have enough down payment, and do not want to ask friends and family for help. Here are some options I’d explored that could be helpful to you too.

Sponsor units

apartments that still belong to the original owner, perhaps the owner that turned the same building into a co-op

much more flexible co-op rules and financial requirements

no co-op board application needed, skip having additional monies reserved on top of your down payment

could still require 20 to 25% down

city and state transfer taxes paid by you upon purchase, but can be negotiated

Condops

these are co-ops with commercial or non-residential space on the ground floor of the building

the additional commercial space below helps lower each owner’s monthly maintenance charges

usually have more flexible co-op rules and financial requirements

they are known to be less stringent when reviewing your co-op application as well

could still require 20 to 25% down

Condos

condos in manhattan usually require a minimum 10% down instead of 20%+, and allow for 90% financing

no co-op board application needed, which means you can skip having additional monies reserved in your bank account, on top of your down payment, to show proof of financial stability from your end.

upon closing, additional mortgage recording tax due: 1.8% on mortgage amounts <$500k, 1.925% >$500k (N/A for co-ops/condops/sponsor units)

3rd party Financing - SONYMA (State of New York Mortgage Agency)

If you don’t qualify for city/federal level financing programs, try SONYMA due to higher income limits

minimum down payment is only a whopping 1% (3% for co-ops)

depending on the co-op building rules,  20% down could still be required by you (no 3rd party financing)

if only putting <20% downpayment, your mortgage loan will always require Private Mortgage Insurance (PMI) by the mortgage bank

Application link: https://hcr.ny.gov/how-apply#how-to-apply

Check out past sample income limits below for SONYMA qualification:

NYC Housing Lottery

popularized by Mitchell Lama Programs back in the 1950s/60s, thanks to Senator MacNeil Mitchell

usually in Brooklyn

income cut-offs are around $53,450-$157,422 (as of 2020)

if you are above 62 years old, your income cut-off requirement is much lower (I’d like to personally congratulate you for reading this on tumblr if you are >62 years old!)

housing lottery apartment units usually have lower down payment requirements, and a lower sale price

for more info, please head to NYC’s housing website: https://housingconnect.nyc.gov/PublicWeb/search-lotteries

HDFC Units

these are short for Housing Development Fund Cooperation units

usually disclosed by the real estate agent and available as a searchable filter in public real estate listings

sellers and co-op boards set the terms of sales 

no condo units available

lower sale price, lower monthly cost, but higher down payment due to nature of co-op

high flip tax, ~30% of a seller’s profits are kicked back to the co-op

Coordinate all your monies into banking account asap

there is a “seasoning” timeframe if applying for financing. Google “seasoning funds” :)

discuss any possible gift money needed from relatives/friends. Even if you don’t need the money, get the gift anyway to strengthen your co-op board application. make sure to double check the gifting tax threshold.

keep in mind your application offer date and bank statement for the same month. That’s something you will need to share and be transparent with everyone throughout the process.

consolidate your finances into as few bank accounts as possible to minimize hassle explaining during mortgage due diligence by the bank.

typically only 10% of the down payment will be out of your account to secure the offer. The rest of the downpayment will remain in your bank account for co-op and financing proof, and out of your account upon closing.

Shop around for best bank mortgage financing rates

obtain your pre-approval letter from a bank, any bank really, to get the ball rolling

1-3 business days turnaround to obtain pre-approval letter

make sure there is no credit freeze on your SSN which is not harmful but will delay your bank application process to unfreeze and reapply.

obtain pre-approvals from a few banks around the same time to avoid adverse credit pull dings

don’t overthink rates and fees quoted by the bank as it is not advisable to lock in rates early for co-op purchases, due to rate expiration dates extension fees, and these rates could change during your final signing date.

pay closer attention instead to the working relationship you have with your banker, timeliness, which negate any slight 0.01%-0.02% difference in rates.

Don’t feel guilty working with more than 1 real estate agent

The seller will be paying for the buyer’s real estate agent fee usually, so this is complementary help

Alternative online listings like Prevu and Yoreevo offer fee rebates 

A good agent will have solid experience in packaging a stellar co-op application package

A good agent will be able to advise on less known complications like electricals and plumbing needing an upgrade (**extra costs and hassle to take into account) when reviewing property

Research real estate attorneys to represent you

I was quoted $2k-$4k range by real estate attorneys for a ~$500k straightforward co-op purchase in downtown Manhattan

I’ve been told here’s the running rate in NYC 2021:

Standard transaction: $1,500 to $2,750

Luxury transaction: $2,500 to $4,000

Complex transaction: Greater than $4,000

Pricing is always negotiable

Some offered to have fees 50% at signing, 50% at closing. Some 100% at closing

If lacking recommendations, head to https://a836-acris.nyc.gov/ , search for common co-ops you are looking at, and the property record copies display lawyer contacts for those properties

Good to have a backup in case your seller is using the same real estate  attorney for the transaction (which happened to me!)

Co-op due diligence

Watch out and keep in mind co-op maintenance fees, there is always, always a potential for increase

Watch out for rental fees and other misc. co-op fees that could incur down the line which could make it harder to offload your property in the future

You can request for co-op house rules and bylaws before you extend your offer, ask your real estate broker to get a copy for ya!

If looking to renovate/remodel your apartment potentially, grab a copy of the alteration agreement as well. This is a good indicator of how stringent/lax your co-op might be to your future plans here.

Properties sold under “sponsored listings” don’t require co-op board approval

https://www.addressreport.com  

love love love this website, so easy to use. Search for your street address, and it spits out good intel that is typically cumbersome to search for individually. Average household income levels provides a good idea of the demographic mix.  Recent property sales nearby is a quick proxy for your loan appraisal report. Extremely accurate rodent sightings classification from the many properties I have viewed.

https://a836-acris.nyc.gov/CP/

 This is a government website, rather clunky to search, but once you get the hang of it, worth every second of the effort to obtain really granular information about past purchasers within the building, $$$, the real estate lawyers they have used (if you need leads), etc. that you would assume is private. 

https://streeteasy.com/ 

the most comprehensive view of available properties in the tri-state area in terms of listing, updated pictures, sale and rental history etc. Remember to set saved alerts to your inbox! I’m no longer looking for a property but still love snooping on new listings.

https://www.realtyhop.com/ 

if the property and unit detail isn’t on streeteasy, it will likely be updated here. Both RealtyHop and StreetEasy combined should be able to provide a solid, qualified, up-to-date detail of not just the unit, but the whole building as well, along with past historical property details for you.