What is the difference between a co-op and a condo?
Owning a condo is like owning a house. You own a piece of real estate and you receive a deed to the property. Co-op owners do not own real estate. They own shares of stock in a corporation that owns the building and they receive a proprietary lease for their apartment.
If I purchase an apartment, how much of a mortgage can I get?
In Manhattan, it is extremely difficult to finance more than 80% of the purchase price, whereas individuals can buy houses easily and get PMI, Private Mortgage Insurance, offering up to 95% of the purchase price. PMI is rarely available in Manhattan. When purchasing a condo, the buyer should be able to obtain 80% financing, as long as he or she has a suitable income. When purchasing a co-op, the buyer needs to be aware of the particular building's financing requirements. The majority of co-ops require a down payment of at least 25%, making 75% financing the maximum. More restrictive co-ops may allow no financing at all or require 50% of the purchase in cash.
What kind of financing is available?
Co-ops only restrict the amount of down payment. They rarely put restrictions on the type of mortgages the banks loan.
What do I need for the co-op board?
The following is a partial list, and further details are available from your Citi Habitats agent. Co-op boards require a purchase application, financial statement, three letters of personal reference, two financial letters of reference, a letter from a present landlord, employment verification letter, business letters of reference, copies of the last three years' tax returns, a credit search, lead paint disclosure, and financing information.
How much in assets does the board require after down payment?
This varies from building to building, but in most cases, co-op boards do not make their requirements known to the public. Typically, the building is most concerned with the buyer's ability to meet his monthly obligations without any problems. The more selective the co-op, the more stringent the requirements. Virtually every building will make sure that the buyer's liquid assets are not totally tapped out by the purchase. Some of the more restrictive co-ops require that the buyer have as much as four times the monthly maintenance obligations in liquid assets after the closing.
Can I renovate?
Yes. However, the co-op board must approve plans if structural changes are being made to the apartment. The buyer needs to follow the regulations and procedures in order to avoid any problems. The buyer should not assume that he/she can change the apartment in any way he/she likes.
How much of the maintenance in a co-op is tax deductible?
A portion of the maintenance is used to pay real estate property taxes. Co-op buildings receive one tax bill for the entire building. Each shareholder pays a proportionate amount of the building's taxes, and the portion of the maintenance that is used to pay the real estate property taxes is 100% tax deductible.
How much do I have to put down upon signing?
The standard down payment is 10% of the purchase price, to be held by the seller's attorney in an escrow account until closing.
Can you refer me to a real estate attorney?
Absolutely. Citi Habitats has built trusting relationships with the city's most experienced real estate attorneys who are well-versed in every aspect of real estate laws and transactions.
Can you refer me to a mortgage broker?
Absolutely. Citi Habitats maintains outstanding professional relationships with top mortgage brokers who are ready to assist you in all your home buying needs.
When should I begin looking for an apartment?
Depending on what you are looking for, the time frame can vary greatly. The average person sees 20-25 apartments before choosing one.
If I buy an apartment, can I sublet when I want?
Most co-operative apartments have restrictions on subletting. Very few allow you to rent without restrictions. Some don't allow sublets for any reason or will let you sublet for a limited amount of time, provided you have already lived there for a specified amount of time. Sublets are available for up to two years, at which time you would have to sell or move back into the apartment. With the strength of the marketplace, most Manhattan co-ops have tightened policies or eliminated the entire process. In order to raise revenue and discourage subletting, some buildings charge fees to the owner in addition to the standard application fees, while some buildings also charge a monthly fee calculated as a percentage of the maintenance. In a condo, you have the right to rent at any time, although virtually every condo building in New York has recently tightened its policies, including raising the fees charged to the owner of the condo. Many condos now require the subletter to fill out a complete application disclosing financials and credit information in order to rent from an owner in the building.