Buying a home is a major decision and an exciting experience. Once you know owning a home is the right move for you, the first step is to seek professional assistance to navigate you through the buying process.
When you choose DMV Equity Real Estate to represent you, you are assured the best insight in market expertise, service excellence and industry resources to make the buying process smooth and seamless. This informative guide will help educate you on what is involved in purchasing a home, and will empower you with the knowledge you will need to make a confident decision.
At DMV Equity Real Estate, we are committed to guiding you through your search to make purchasing your New York home rewarding and stress-free.
TIMELINE
PREPARATION FOR FINANCING
DIFFERENT TYPES OF RESIDENTIAL PROPERTY OWNERSHIP
TIMELINE
Here is the general timeline of events. The first step is setting up an appointment to preview the property. Once we have established there is definite interest, we will present an offer in writing to either the owner or listing agent (depending on the specific circumstances). In most cases, the entire closing process will take anywhere between 30-120 days to be completed.
- Prepare Written Offer (1 day)
- Negotiate Offer and Acceptance (2-7 days)
- Loan Application & Appraisal, Loan Approval & Commitment Letter, Sign Contract/Escrow Deposit (3-6 weeks)
- Condo Application/Co-op Board Package & Interview (4-6 weeks)
- Bank Prep & Attorney Prep Closing (1-2 weeks)
- Closing the Transaction (2-4 hours)
PREPARATION FOR 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 can help arrange a meeting with a knowledgeable mortgage broker who will answer your questions about the loan process and determine what you can qualify for. 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 between 30-90 days. As a note, most sellers require buyers to provide a pre-approval letter with an offer letter.
DIFFERENT TYPES OF RESIDENTIAL PROPERTY OWNERSHIP
Before you start looking, it is important to understand the different types of ownership available to purchasers of property in different areas of New York State.
Cooperative
In New York City, cooperatives have been the traditional way to own an upscale apartment for nearly a century, and comprise two thirds of all apartments available for purchase. Co-ops are owned by an apartment corporation. When you purchase an apartment in a co-op building, you are buying shares of the corporation that entitle you as a shareholder to a “proprietary lease.” Typically the larger your apartment, the more shares of the corporation you own.
- Co-op shareholders also pay a monthly maintenance fee to cover building expenses like heat, hot water, insurance, staff salaries, real estate taxes and the mortgage debt of the building. Portions of the fee are tax deductible; and shareholders can deduct their portion of the building’s real estate taxes.
- Approval to purchase shares of a co-op must be granted by a board of directors, who also have the authority to determine how much of the purchase price may be financed and minimum cash requirements. All prospective purchasers must submit a “board package” containing a purchase application, personal and professional letters of recommendation plus detailed information on income and assets. The board will also require an interview so they can meet you and ask any questions regarding the information you provided. They can approve or deny any applicant as they choose.
Purchasing a co-op can be intricate, and subletting may be difficult. Each co-op has its own rules and should be considered carefully.
Condominium
Unlike a co-op, a condominium apartment is real property, and a purchaser is given a deed as if they were buying a house. The difference between owning a condo and a house is that in addition to owning the apartment, you also own a small percentage of the common elements of the building like the halls, stairwells, basement, etc.
- Each individual apartment in a condominium receives a separate tax bill from the city. There is still a monthly common charge similar to the maintenance charges in a co-op, which is paid to the condominium association to pay for such items as payroll, building maintenance and supplies, management fees, and building repairs. These charges do not include your real estate taxes and are not tax-deductible. They also tend to be lower than in co-ops because there may not be an underlying mortgage for a condominium building.
The straightforward nature of buying a condo plus the fact that in some cases you can finance up to 95% of the purchase price and sublet your apartment at will makes this form of ownership a top choice for flexibility, especially among investors, foreign buyers and parents purchasing for their children.
Cond-Op
A cond-op is a residential cooperative where the ground floor (typically commercial units) is converted into a separate condominium that’s either owned by an outside investor or the original building sponsor. So while the residential units are a co-op, the commercial units are owned as a condominium by an entity other than the co-op. The co-op does not receive the benefit of the income from these units. People often refer to cooperatives that operate under condominium rules as cond-ops, though this is inaccurate.
1-4 Family Properties
Owning a 1-4 family property provides the owner with a “fee simple” ownership of real property. These properties can be lived in or rented out at will. In either case, the owner is responsible for payment of all real estate taxes, maintenance and repairs of the property. The sale of the property may be conveyed to any party without prior approval by anyone other than the homeowner.