BUYERS INFO

THE BUYER'S GUIDE

STEP I - FINDING THE RIGHT REAL ESTATE AGENCY  

The first step in purchasing property in Manhattan is to locate and work with the right real estate agency. Essential New York Real Estate is unique among real estate brokers because we are a division of the ATCO Family of Companies which gives us access to multiple resources so that you can find the right property, at the right price...in the minimum amount of time. And because we are a boutique firm, our Essential New York agents provide attentive and personal service.

With state-of-the-art computer systems at our disposal, our agents analyze your needs and bring Manhattan's residential market right to your fingertips. We have access to virtually 100% of listings in Manhattan and can show our customers images, floorplans, and specific details about the units in which you might be interested.

Our experienced team of broker professionals has a depth and breadth of experience unrivalled in today's real estate marketplace. They are experts in Manhattan's best neighborhoods, both established and emerging. They not only know the apartment buildings, but the schools, shops, gyms, parks, libraries and public transportation routes.

Because we know the ownership requirements for each building, our Essential New York agents save you time by only showing you those properties where your application can be approved. We are also experts in completing your board review process. Our entire team of seasoned Essential New York professionals is with you every step of the way.

Your Essential New York agent represents you exclusively. We have no divided loyalties. From first viewing of the apartment, through negotiation to final signing, your Essential New York agent represents solely your interests.

We are members of the Real Estate Board of New York and observe their Code of Ethics and Resolutions.

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GET PREPARED WITH YOUR FINANCING

Learning about financing options and what you can afford before you start looking for a home will save time and streamline the buying process. We will arrange a meeting with a mortgage broker who will answer your questions about the loan process and determine a comfortable price range. During this early phase of the loan process, there are two levels of endorsement: 

Pre-Qualified: Based on the information you provide during your initial conversation with a mortgage broker, you are potentially qualified for a stated loan amount, assuming full and accurate disclosure. 

Pre-Approved: You will next provide your mortgage broker with information for a detailed background and financial check (including tax returns, credit check & income history). You will then get a letter from the lender stating the amount the lending institution would loan you. This commitment is valid for about 60 days. As a note, most sellers require buyers to provide a pre-approval letter with an offer letter.

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OBTAINING A LOAN

Before you even start your apartment quest, your Essential New York agent can put you in contact with mortgage broker or lender to determine your qualifications and obtain the loan you want. You can apply for a loan directly through a lender (e.g. a bank) or use the services of a mortgage broker.

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THE OFFER TO PURCHASE

Once you have determined the apartment you want to purchase, your Essential New York agent will help you negotiate an accepted offer. Your offer should include the price you will pay, the percentage of the price you will finance, if so, the inclusions or exclusions of any personal property and your desired closing date. Remember: until a contract is signed by and delivered to both parties, you do not have a deal.

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THE MORTGAGE BROKER

Residential mortgage brokers are regulated by the New York State Banking Department. Mortgage brokers negotiate, originate and process residential real estate loans on behalf of the borrower. A mortgage broker does not actually lend money to prospective purchasers. Instead, he/she will arrange for a loan through an institutional lender on behalf of the purchaser. 

A lender's decision to make a loan is usually based upon the following factors: your credit rating, income, assets and liabilities, amount of the loan and the appraised value of the apartment. To verify this information, the lender will require you to complete a loan application setting forth your assets and liabilities, will confirm your employment and income, will request a credit report form a credit reporting agency and will have the apartment appraised. 

When obtaining a loan on a condo or co-op apartment, the mortgage broker or lender will need to make sure the building is in good financial condition. Therefore, when applying for a loan, it is a good idea to obtain the building's financial statements for the last two years.

It normally takes three to six weeks to obtain a written loan commitment. A "commitment" is the lender's written agreement to lend you money to buy the apartment. Once the loan commitment has been issued, your attorney should review it. If everything is in order, sign the commitment and return it to the lender or mortgage broker as directed.

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HIRING AN ATTORNEY 

New York City has complex real estate laws. Your Essential New York agent can assist you in hiring a local real estate attorney. The lawyer will initially perform a "due diligence" review of the underlying documents for a co-op or condo to determine, prior to your signing a contract, whether there are any legal or financial problems with the building where the apartment is located. 

For a condominium, the lawyer should review the offering plan, all the amendments, the by-laws, the house rules, the financial statements and the title report. For a co-op, the lawyer should review the offering plan and all the amendments, the by-laws and the house rules, the financial statements and the proprietary lease. In addition, the attorney should review the corporate minutes of the cooperative at the managing agent's office. Reviewing the minutes will provide insight into any current or future problems in the building and reveal if there are major expenses to be incurred by the co-op corporation and its shareholders.

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THE CONTRACT OF SALE 

Once an offer has been accepted and you have been pre-approved for a loan, the seller's real estate attorney will prepare the contract of sale and forward it to your real estate attorney. At this point, you should inform your attorney of any particular terms of the transaction or any special circumstances you think may be important. The attorney will make any changes or additions to the contract that may be necessary to protect your interests. 

After the contract is finalized, the lawyer should meet with you to explain your rights and obligations under the terms of the contract. You will sign three or four copies of the contract and will provide a personal check payable to the order of the seller's attorney (usually equal to 10% of the purchased price), representing the down payment. The contracts and the down payment check are then delivered to the seller's attorney. 

The sellers' attorney will hold your down payment in his trust or escrow account until closing. Thereafter, the seller counter-signs the contract, the seller's attorney signs the contract acknowledging receipt of the down payment and two fully executed copies are returned to your attorney. Your attorney will deliver one original contract to you and a copy to your lender or mortgage broker. After receiving the signed contract promptly submit your final mortgage application if you have not already done so.

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BOARD APPROVAL (CO-OPS ONLY) 

The sale of a co-op is conditional upon the co-op board approving the purchaser, unless you are purchasing directly from the sponsor. The contract provides that you promptly submit your application for board approval after issuance of a financing commitment, if any. You must cooperate with the co-op board requests and provide any documentation it requires to approve your purchase. 

Each co-op board establishes the financial requirements for prospective purchasers in their building. In addition, co-op boards set financial limitations on the amount of money a prospective purchaser may borrow in order to conclude the transaction. (For example, many co-ops allow a purchaser to finance only 50%-75% of the purchase price.)

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THE CO-OP CLOSING 

The closing is ordinarily held at the office of the Managing Agent for the apartment corporation. It is attended by you, your attorney, the seller, the seller's attorney, the lender's attorney, a representative from the managing agent's office and the real estate agents involved. At the closing, you will first sign all the documents necessary to secure interest in the apartment. These documents include a Security Agreement, Promissory Note, a Stock Power and an Assignment of Lease. 

Then you will sign and receive all documents to convey the co-op apartment to you, including stock certificates, the proprietary lease and consent. Checks, representing the balance of the purchase price and adjustments, are exchanged for the keys.

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BOARD APPROVAL - CONDOMINIUMS

The sale of a condominium is conditional upon the Board of Managers' Waiver of the Right of First Refusal approving the purchaser, unless you are purchasing directly from the developer. Your purchase contract provides that you promptly submit your application for board approval after issuance of a financing commitment, if any. You must cooperate with the condo board requests and provide any documentation it requires to issue the waiver.

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THE CONDO CLOSING 

The closing is ordinarily held at the office of the lender's attorney unless it is a developer sale. In the latter case, it is held at the developer's attorney's office. The condo closing is attended by you, your attorney, the seller, the seller's attorney, the lender's attorney, the title company closer and the real estate agents involved. 

At the closing, you will first sign all documents necessary to put a first mortgage on the apartment. These documents include a Mortgage and a Promissory Note. Then you will sign and receive all documents to convey the condo apartment to you, including a deed, title report and unit power of attorney. Checks representing the balance of the purchase price and adjustments are exchanged for the keys and you pay all appropriate taxes and title charges.

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THE DIFFERENCES BETWEEN CONDOMINIUMS AND CO-OPERATIVE APARTMENTS

CONDOMINIUMS

Owning a condominium is just like owning any other kind of home - with one difference. In a condominium, a purchaser owns the apartment plus a percentage of the common areas of the building. The purchaser takes title by deed, which is recorded in the County Clerk's office. Only about 20% of Manhattan's buildings are condominiums. 

Condominium boards often require a down payment of at least 10%. The condominium owner pays monthly "common charges" which are his or her share of the general upkeep of the building...i.e. employee salaries, fuel, insurance, management fees, etc. 

The owner pays the real estate taxes allocated to the apartment. No board interview is required of a purchaser and there are often no limitations on the amount of money you can borrow to finance the apartment. You can sell your apartment to whomever you please, at any time, with only the condominium board's Right of First Refusal.

The closing costs for purchasing a condominium are higher than for a co-op.

 

CO-OPERATIVES

In a co-op, the cooperative apartment corporation owns the entire building, including all the apartments. The corporation issues shares of its stock which are allocated to each apartment depending on the size and features. About 80% of Manhattan's buildings are cooperatives. 

When you purchase a co-op, you are actually purchasing shares in the apartment corporation. The corporation usually has a mortgage on the entire building. However each purchaser may have a separate loan for the purchase of his or her apartment. 

The apartment corporation establishes the amount of financing allowable on apartments purchased in the building. The range is literally from all cash (i.e. no financing allowed), to 90% financing. Most Manhattan co-ops fall into a range of 50% to 80% although every building is different. 

In a co-op, the purchaser pays monthly maintenance charges based on his or her share of the underlying mortgage and real estate taxes of entire building as well as expenses for general upkeep, salaries, fuel, etc. Monthly maintenance charges for co-ops are generally higher than for condominiums. The portion of the maintenance charge comprised of mortgage interest is tax deductible. 

A major difference between co-op and condominium ownership is that in a co-op your ownership is subject to approval by a Board of Directors. This Board is elected from among the shareholders. The Board's job is to conduct the business of the Apartment Corporation and oversee the management of the building, usually with the assistance of a Managing Agent. The Board may impose limits on the amount of money you need to finance your apartment, as well as restrictions on sub-letting, etc. You cannot sell a co-op without the board's approval of the prospective buyer.

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TAX ADVANTAGES OF HOME OWNERSHIP 

The current federal and state tax laws favor and generously reward home ownership. There are numerous ways a condominium, co-op or townhouse owner will save on taxes while building equity in their property. 

1. All of the interest paid toward a home mortgage is fully tax deductible. For example: If the total mortgage payment is $3,000 per month (where in the early stages of your mortgage most of the payment is interest), let's assume the interest is $36,000 per year ($3,000 x 12). If you are in the 28% tax bracket, a $36,000 deduction means a federal tax saving of over $10,000. Meanwhile, the property continues to appreciate in value as your home grows in value. 

2. All the money you pay in real estate tax is fully deductible. 

3. When your apartment is your principal residence and you decide to sell, you may exclude up to $250,000 of your total gain ($500,000 if you are married and file a joint return). This exclusion is allowed each time a taxpayer sells or exchanges a principal residence, although the exclusion generally may not be claimed more frequently than once every two years. 

As you can see, the deduction from taxable income, and the deferral of capital gains when you sell are important considerations when you weigh the benefits of owning against renting in Manhattan.

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ESTIMATED TIMELINE FOR BUYING A HOME 

Once you decide to make an offer on a home, in most cases it can take an average of 60 - 120 days to complete the closing process.

Prepare the Offer: 1 day

Negotiate the Offer & Acceptance: 2-5 days

Loan Application & Appraisal, Loan Approval and Commitment Letter, Sign Contract/Escrow Deposit: 2-4 weeks

Co-op Board Package & Interview/Condo Application: 4-6 weeks

Bank & Attorney Prep Closing: 1-2 weeks

Final Walk Through: day of closing

Transaction Closing: 3 hours

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CLOSING COST

CONDOMINIUMS AND TOWNHOUSE

For The Seller

 
Application/Waiver Fee $500 - $1,000
Pick-Up Fee for Mortgage Pay-Off $175 - $250
Real Estate Tax and Common Charge Adjustment Not really a "closing cost". Seller reimburses Purchaser for the portion of maintenance and/or Real Estate Taxes that the Seller failed to pay prior to Closing
General  
Brokerage Commission 6% of Sales Price
Seller's Attorney's Fee Consult your attorney
Move-Out Deposit - refundable $500- $1,000 
Move-Out Fee - non-refundable $250- $1,000 
NYC Real Property Transfer Tax 1% of Sales Price - $500,000 or less
1.425% of Sales Price - greater than $500,000
Commercial/Bulk Sales Rate If 2 or more un-attached units are sold simultaneously to the same buyer, the commercial transfer tax rate applies - 1.425% of the Sales Price if $500,000 or less or 2.625% of Sales Price if greater than $500,000 
NYS Transfer Tax 0.4% of Sales Price
NYS Estimated Capital Gains Tax 8.97% of estimated gain - paid at closing unless (i) Seller is a NY State resident at time of sale, or (ii) property was Seller's primary residence for 2 out of the last 5 years, or (iii) Seller has set up a 1031 Tax-Deferred Exchange (investment property only) 
Transfer Tax Filing Fee $75
Federal Withholding Tax (FIRPTA) 10% of Sale Price if Seller is a non-resident foreigner 

 

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For The Purchaser

 
Title Insurance - Owner's Policy Approximately $4 per $1,000 of insurance (fee regulated by statute) plus various search and recording fees totaling an additional $1,000
Title Insurance - Mortgage Only applies if the Purchaser is obtaining financing - variable depending on loan amount 
Real Estate Tax and Common Charge Adjustment Not really a "closing cost". Purchaser reimburses Seller for the portion of common charges and/or Real Estate Taxes that the Seller has pre-paid
New York State Mortgage Recording Tax 1.80% if mortgage amount is less than $500,000
1.925% if mortgage amount is greater than $500,000 
Title Closer Gratuity $250
Bank Fees (only applicable if Purchaser is obtaining a loan) Includes items such as discount points, appraisal fee, origination fee, credit report fee, document preparation fee, courier fee, application fee. Variable depending on lender and load product
Bank Attorney fee $700- $950 
General  
Move-In Deposit - refundable $500- $1,000 
Move-In Fee - non-refundable $250- $1,000 
Purchase Application Fee $500- $1,000
Mansion Tax 1% of Purchase Price if $1,000,000 or more
New Construction  
Sponsor Attorney's Fee Consult your attorney 
Sponsor's NYC and NYS Transfer Taxes Calculated and added to the Purchase Price (to arrive at the tax) and then recalculated based upon the grossed-up price (may trigger Mansion Tax)
Working Capital Fund Contribution Calculated and added to the Purchase Price (to arrive at the tax) and then recalculated based upon the grossed-up price (may trigger Mansion Tax) 1 - 2 months of Common Charges

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COOPERATIVES

For The Seller

 
Flip Tax Variable depending on the building (if applicable)
Stock Transfer Tax $0.05 per share
Transfer Agent Fee (Coop Attorney's Fee) $500 - $750
Maintenance Adjustment Not really a "closing cost". Seller reimburses Purchaser for the portion of maintenance that the Seller failed to pay prior to Closing
Brokerage Commission 6% of Sales Price
Seller's Attorney's Fee Consult your attorney
Move-Out Deposit - refundable $500- $1,000
Move-Out Fee - non-refundable $250- $1,000
NYC Real Property Transfer Tax 1% of Sales Price - $500,000 or less
1.425% of Sales Price - greater than $500,000
Commercial/Bulk Sales Rate If 2 or more un-attached units are sold simultaneously to the same buyer, the commercial transfer tax rate applies - 1.425% of the Sales Price if $500,000 or less or 2.625% of Sales Price if greater than $500,000
NYS Transfer Tax 0.4% of Sales Price
NYS Estimated Capital Gains Tax 8.97% of estimated gain - paid at closing unless (i) Seller is a NY State resident at time of sale, or (ii) property was Seller's primary residence for 2 out of the last 5 years, or (iii) Seller has set up a 1031 Tax-Deferred Exchange (investment property only)
Transfer Tax Filing Fee $100
Federal Withholding Tax (FIRPTA) 10% of Sale Price if Seller is a non-resident foreigner
Payoff Bank Attorney Fee $375 - $500
UCC-3 Filing Fee $75 - $125

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For The Purchaser

 
Cooperative Application Fee $500 - $1,000
Judgment and Lien Search $250 - $350
Recognition Agreement Fee $150 - $250
Maintenance Adjustment Not really a "closing cost". Purchaser reimburses Seller for the portion of maintenance that the Seller for
Bank Fees (only applicable if Purchaser is obtaining a loan) Includes items such as discount points, appraisal fee, origination fee, credit report fee, document preparation fee, courier fee, application fee. Variable depending on lender and loan product.
Bank Attorney Fee $700- $950 
UCC-1 Filing fee  $75- $125 
General  
Move-In Deposit - refundable  $500- $1,000 
Move-In Fee - non-refundable  $250- $1,000 
Purchase Application Fee  $500- $1,000 
Mansion Tax  1% of Purchase Price if $1,000,000 or more 
Purchaser's Attorney Fee  Consult your attorney 
New Construction  
Sponsor Attorney's Fee  Consult your attorney 
Sponsor's NYC and NYS Transfer Taxes Calculated and added to the Purchase Price (to arrive at the tax) and then recalculated based upon the grossed-up price (may trigger Mansion Tax)
Working Capital Fund Contribution 1 - 2 months of Maintenance

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FOREIGN BUYERS GUIDE

New York City has always provided valuable and in-demand real estate among foreign buyers for a number of reasons, not the least of which its prime location as one of the world’s centers for culture, arts, and commerce. Many international buyers, however, may have certain questions regarding a number of areas, from how New York real estate works, to their numerous options. The following is a guide for anyone in this situation, who is considering purchasing real estate in New York despite being a citizen and resident of another country.

Condos

Another important thing to realize is that the real estate market in the United States is extremely friendly to foreign buyers. The most popular purchases now are condominiums in New York City.

New York City condominiums offer wonderful, comfortable homes for families and individuals. The basic concept of a condominium is that the buyer owns the apartment and shares the common areas with the other building residents. Over the past number of years, many new condominiums have been constructed in New York City.

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Why Condos are So Popular

While every person has to pass the approval of the board, which is made up of residents who make all decisions about the building, such as rules, use, and repair, this process is not as complicated as in co-ops (see below), and is instead more of a formality.

Condominiums only impose minimal restrictions on their tenants as far as ownership or use. Sub-letting, part-time residence, and other options are allowed, unlike in co-ops.

Condominiums are more expensive than co-ops but are also much more flexible and can be more convenient. They are mostly elegant and beautifully designed, making them fantastic investments.

Buying and selling New York condominiums is a relatively simple procedure, particularly when compared to co-ops, so they can be very enticing to international buyers.

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Condos Versus Co-ops

It is not impossible for a non-US citizen to buy a co-op unit. It is, however, a far greater struggle. Everyone has to pass the approval of the co-op board, which can be extremely difficult even for United States citizens, because the boards can be discerning and demanding. Being an international purchaser adds an additional layer of difficulty.

In order to appeal to a co-op board, purchasers have to indicate that they will be good neighbors, easy to get along with, and able to contribute financially to the building’s upkeep. Co-op boards tend to want their shareholders to work in New York, have a nearly perfect credit rating in the United States, and to have a United States tax return, which poses the most significant problem for foreigners.

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Closing Costs

At the closing, both buyers and sellers have to pay the closing costs, which can range from between 1-8% of the price of the purchase. Federal, state, city, registration, and legal fees are required, along with the down payment.

When someone purchases a condominium in New York City, he or she is required to pay the NYC Real Property Transfer Tax, which ranges from 1%, for condominiums which cost less than $499,000.00, to 1.425%, for condominiums which cost more than $499,000.00.

Amounting to .4% of the price of purchase is the New York State Transfer Tax.

Falling in a range of $1500.00-2500.00 is the Seller’s Attorney Fee.

Title Ownership, as it sounds, gives the buyer his rights of ownership and ensures that a third party will not ever be able to claim ownership. The cost is $450.00/$100,000.00 of the price of purchase.

If a property’s cost exceeds $1,000,000.00, a Mansion Tax is applied, which is 1% of the price.

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Building Fees

Mortgage Loan Origination Fees can be in a range of .5%-3% of the value of the mortgage.

Ranging between $500.00-1500.00 is the Move-In Deposit.

Many buildings charge $200.00 Application Fees.

Running between $250.00-500.00 is the Managing Agent Fee.

The Attorney Fee is then necessary to pay the lawyer for reviewing the documents. The fee depends on how complex the sale is, and can range from $2500.00-$5000.00, with another $500.00 needed to pay for the recording costs.

Mortgage Tax will mostly likely range between 1.8%, for those mortgages that are under $499,000.00, and 1.925%, for those mortgages that are over $499,000.00.

Lieu Search Fees are between $300.00-400.00.

Mortgage Title Insurance is $200.00/100,000.00 of the property’s value.

Credit Reports are between $30.00-100.00.

Appraisals are around $500.00 or more.

Loan Applications are around $500.00.

Bank Attorney Fees are between $1500.00-2500.00.

Misc. Bank Fees, which include escrow and home insurance, can be between $400.00-1200.00.

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Tax Abatements

Tax abatements are programs that allow taxpayers to be granted a reprieve from paying a certain tax for a period of time, for either a total or a percentage of that tax. As such, they are intended to encourage real estate developers in New York to keep building and enhancing neighborhoods. The tax status a building qualifies for is dependent on the specifics of any given building. Nest Seekers agent are able to advise an owner about the his or her property’s tax status.

Tax Exemption Program—Covering new buildings and some specific renovations.

421-A—Intended for new buildings, this program’s purpose is to phase out tax exemptions over a period of 10 years. Real estate tax increases by 20% each 2nd year until it reaches maturity. For example, 100% exempt for the 1st and 2ndyear, 80% exempt for the 3rd and 4th year, until it reaches the 10th year.

421-G—Intended for new buildings, this program applies to one specific area, namely below Manhattan’s Murray street. The buildings that are eligible in the area get tax benefits for 14 years. This lowered payment applies for the first 8-10 years and is gradually phased out till it expires in the 14th year.

Other Incentives—Many New York City buildings can qualify for abatement periods that range between 15 to 25 years. A building’s eligibility will be influenced by factors including the availability of units that are reasonably priced, location, and receiving assistance from the government in the form of grants and loans.

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Obtaining a Mortgage

It is not as difficult as one might expect for a foreign buyer to obtain a United States mortgage. Most of the banks in the United States now have programs in place intended for foreign buyers. International purchasers are able to finance 65-75% of their loans, up to $1 million and 60% of their loans that fall in the range of between $1 and $2 million.

In general, foreign buyers are asked to provide a number of specific documents. These include:

At least 4 Credit References, which must be from professionals who work in finance, such as

  • Accountants
  • Bankers
  • Insurance Officials
  • Foreign Passport or Visa
  • Adequate Funds for Closing
  • Proof of Mortgage and/or Rent payments for a period of at least one year
  • Proof of Employment

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LLCs

While it can be beneficial to buy a home through a Limited Liability Company, or LLC, potential treaties between the United States and that specific foreign country can diminish the advantages for foreign buyers. An international purchaser really should enlist a tax adviser who specializes in international law to help.

Here are some important things to know about LLCs:

  • An LLC has to be formed in the same US state in which the property is located.
  • LLCs must file local, state, and federal tax returns.
  • Once the sale happens, the owners can transfer or sell the LLC shares to the buyer.
  • There are unlimited membership requirements to an LLC. It can be composed of US residents and non-residents.
  • It takes about a week to form an LLC.

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Tax Liability

Tax liability for non-US residents is different than for residents. The following is a short outline, which Nest Seekers professionals will help you with:

Federal Tax—For US residents, the federal tax placed on long-term investments is 15%. For non-residents, it is 30%.

FIRPTA—FIRPTA stands for “Foreign Investment in Real Property Tax Act.” Passed in 1980, this act immediately withholds income tax after property is sold by a foreigner. The IRS takes 10% of the proceeds, and NY State another 6.85%.

Forms—NY State requires a Non-Resident Real Property Estimated Income Tax Payment Form, while you need to submit a Statement of Withholding on Dispositions by Foreign Persons of US Real Property Interests to the IRS.

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Purchasing Real Estate in New York: The Process

Before searching for a home in New York City, you should decide on your desired neighborhood the type of housing you want, co-op or condo and the purchase price.

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Financing

Prior to beginning a search for a new home, you will be advised to meet with a mortgage broker or banker, in order to obtain mortgage pre-approval.

Pre-approvals help improve your chances with boards of various buildings, gives you better negotiating power, and lets you realize your spending limits.

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Hiring an Attorney

Lawyers protect your interests and review all of the contracts, to make sure they’re good.

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Talking to a Tax Specialist

International buyers really should consult with tax specialists, because tax liability will be different for you than it is for United States citizens.

There will also be tax liability variations depending on if you are buying a home as an investment or to live in.

You can be advised on the United States tax requirements by either

  • An accountant
  • A tax expert or
  • A lawyer
  • Preparing Finances
  • A deposit of 10% is always required.

Opening a bank account in the United States is recommended, or Transferring the proper funds to a lawyer’s escrow account.

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Searching for the Property and Making an Offer

Once you find the property you like, make an offer on it. This offer is not legally binding. Multiple ones may be submitted.

Once an offer is finally accepted, the seller’s agent or lawyer will send the building by-laws and contracts to your attorney in order to review.

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Negotiating and Signing the Contract

An attorney will usually take between 5 and 10 days to review a contract.

The seller’s agent will inform the purchaser of the expected time frame.

Sellers are allowed to keep showing homes and accepting offers until the contract is signed.

The contract outlines all of the details of the transaction that is proposed.

Buyers need to examine the contract’s fine details with their attorneys. This will ensure that you understand all of your obligations and risks, as outlined in the contract.

Once all parties sign the contract, the buyer must pay a deposit of 10%. You need to either have this in a United States bank or wire the money to the seller’s lawyer, where it will be secured in the seller’s lawyer’s escrow account.

Deposits will only be refunded under very specific conditions. One is mortgage contingency, which lets a buyer receive a refund if he cannot secure some specific terms of financing. This clause would have to be included in the contract, but sellers rarely approve them for inclusion.

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Getting Approval from a Co-op or Condo Board

In order to buy an apartment in New York, you have to be approved by the board of the building, whether it is a co-op or condo.

A buyer will have to submit thorough documentation to the board, which includes

  • Tax Returns
  • References
  • Financial Statements
  • Co-ops also require interviews, which are very strict and stringently enforced.
  • Condos’ rules are ostensibly similar to co-ops, but they are far less difficult. The approval process is really more formality than the complex procedure that co-ops require.

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Preparing for the Closing

After signing the contract, one still has time in order to obtain the necessary funds and to do appraisals, surveys, a title search, and check for violations and lieu’s on the property, in addition to reviewing documentation.

During this time, assuming a buyer has applied to get a mortgage, the bank will check his assets and documentation, along with a building’s financial information.

Once the bank is satisfied with everything, the complete loan will be wired to the buyer’s attorney’s escrow account, along with the closing costs and down payment.

It is wise for a buyer to visit the property the day before the closing, just to confirm that the property looks as the buyer expects it to, before closing.

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BUILDING AND APARTMENT TERMINOLOGY AND DEFINITIONS

Building Terminology And Definitions

Luxury doorman buildings  

These buildings typically stand twenty to forty or more stories tall and provide full-time doorman and  concierge services. Many have health clubs and/or swimming pools.

Pre-war buildings  

By definition, a building built before World War II. These buildings are usually ten to twenty stories tall and are sought after for their larger rooms, fireplaces, hardwood floors and higher ceilings. They may or may not provide a doorman.

Post-war buildings

These buildings were built between the late 1940s and the late 1970s. They are generally hi-rise and most have doormen.

Elevator buildings

This term usually describes a 6 to 20 stories tall non-doorman building which may be pre-war or post-war. Elevator buildings usually have an intercom or video security system.

Walk-up buildings

This is the least expensive type of housing in Manhattan and the quality can vary widely. Usually these are 4 to 5 story buildings with no doorman and no elevator. They were originally constructed as multi-family dwellings and do not exude the charm or elegance of brownstones or townhomes.

Brownstone or Townhouse

4-6 story buildings built in the 1800s to early 1900s. These can be single-family houses or may have been converted over the years into multiple apartments. They are prized for their charm and elegance. In almost all cases, these buildings do not have a doorman.

Loft apartments

Former commercial or industrial buildings that have been converted into apartments. These buildings almost never provide a doorman and usually consist of vast spaces with high ceilings. Most lofts are found in Greenwich Village, Soho, Tribeca, Chelsea or the Flatiron District.

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Apartment terminology and definitions


Studio

One or two rooms with combined living and sleeping areas.

Alcove studio

A one or two room apartment with a separate alcove which can be used as a sleeping or dining area. Alcoves usually adjoin the living room space of the apartment, are generally less than 100 square feet and can sometimes be walled off to create an additional bedroom.

Junior 4

A Junior 4 may have an alcove off of the living room which can be converted into a bedroom or dining room.

Convertible

This is typically an apartment with an alcove adjacent to the living room that can be used to create another room by using this "flexible" space to "convert" the apartment from, for example, a one bedroom to a two bedroom.

Classic

The word "classic" is usually followed by a number indicating the number of rooms in an apartment. It is usually associated with pre-war apartments that meet criteria for numbers of rooms and design. However, a "classic" can exist in a post-war building assuming it follows the same guidelines. As an example, a "classic six " is comprised of a living room, dining room, kitchen, two bedrooms and a maid's room. A "classic seven" is comprised of a living room, dining room, kitchen, three bedrooms and a maid's room.

Loft area

This is an additional space created in apartments with very high ceilings. The loft area is constructed above the living area, accessed via a staircase or ladder and used for extra storage, sleeping or livingspace (e.g. an office.)

Duplex

In Manhattan this refers to an apartment with two floors or on two levels and not to two apartment units.

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