Leasing Guide
INTRODUCTION
With each neighborhood having its own distinctive flavor, let your Spire agent know what’s important to you – being close to a park or work, nightlife, galleries, etc. so we can find your new home in the area you love most. Additionally, we need to know your budget, size of apt, type of building and any amenities that are important to you so we can match you with the best apartments that are on the market when we go out.
Our highly seasoned rental agents are available to show you homes in every area, from Soho to the Upper East Side, to Brooklyn Heights and Park Slope.
At Spire, we listen carefully to your needs, review the options and then show you the best of what’s out there. As time is always of the essence in this high-demand market, we prepare you well and ahead of time to make sure you don't miss out on a dream opportunity because your paperwork wasn't right, or because you couldn't get to the bank in time to access money to secure the apartment.
TIMELINE FOR RENTING
The best time to start looking for a rental apartment (in a rental building vs a co-op or condo) is 4-6 weeks before your desired move-in date. Keep in mind that summer is the most competitive season for apartments with many apartments renting the same day they come on the market so being prepared with all of your paperwork and having all decision makers on the appointment are key in getting the apartment you love.
BUILDING TYPES
Building ownership is classified into three categories: rentals, condominiums and co-operatives. Each has different tenant requirements, approval processes and timeframes for approval. It is important for you to know the differences between the three as it would affect the parameters and timing of your ability to move in.
Rental Buildings The landlord owns the entire building. Tenants are typically required to earn approximately 40-50 times the monthly rent in guaranteed income. Liquid assets are taken into account. A pattern of bonuses in the past years, if verifiable, may be helpful. If you do not qualify according to this formula, some landlords may accept a guarantor to co-sign your lease. The approval process can take 1-7 days based on the landlord’s review of your financials. If you meet the landlord’s qualifications, payment of one month’s rent and a refundable one month’s security deposit is standard.
Condominiums (Condo’s) Apartments are owned by individuals for residential and/or investment purposes. Within condo guidelines, owners are free to establish terms such as rent and length of lease. The approval process can take 10-30 days based on a credit check and individual owner's requirements. Expect application fees and move-in fees. Security deposit may exceed one month's rent.
Cooperatives (Co-op’s) Buildings are structured as a corporation. Rather than owning an apartment outright, individuals own shares according to the size and value of their unit. There are many restrictions on the rentals of co-ops regarding length of lease, roommates, etc. The approval process can take 30-45 days. Prospective tenants must submit extensive personal and financial information, and interview with the Co-op board. Expect large application fees and move-in fees ($150+). Security deposit may exceed one month's rent. Co-ops can often be problematic for international clients or new hires without an established credit history.
Cooperative (and some Condo) Board Processing A co-op is made up of the individual shareholders (those we usually think of as the apartment owners). The co-op board establishes rules and standards for the building and consists of shareholder/residents who volunteer to help screen prospective tenants and review board packages. Your application and lease package will need to be approved by both the coop board and the building management representatives.
Qualifying A co-op board will need clear cut, specific proof of a prospective tenant's assets and liabilities. Most tenants are required to earn approximately 40-50 times the monthly rent in guaranteed income. Liquid assets are taken into account. A pattern of bonuses in the past years, if verifiable, may be helpful. If you do not qualify according to this formula, some co-ops may accept a guarantor to co-sign your lease.
Processing Fees Co-ops and condos have processing and move in fee requirements, which can range from a couple of hundred dollars and up. There is usually a refundable move-in deposit used to cover damages, if any, which occur during move-in.
Board Approvals Co-ops are elusive about a specific time period for approval. It can take just a few days to a month or longer, and includes a review of your financials by management and the co-op board as well as a board interview. You should plan on waiting the maximum time suggested by the management and board. The time period begins when all documents required are fully executed, submitted and completed to their satisfaction. If you omit requested information, this will only delay your approval process. Do not book movers until you are approved.
WHAT TO BRING ON YOUR APPOINTMENTS / LANDLORD REQUIREMENTS
Items Required From Every Tenant
Completed and signed application
$50-$100 per tenant for credit check (cash or check payable to Spire, Inc. or landlord, non-refundable)
Employment letter/offer letter on company letterhead, signed by manager or supervisor stating:
Annual salary
Position/title
Length of employment (start date)
Guaranteed bonuses (if any)
Your two most recent pay stubs
Your two most recent bank or brokerage statements
Items Required From Every Guarantor
Completed and signed application
$50-$100 per guarantor for credit check (cash or check payable to Spire, Inc. or landlord, non-refundable
Verification of income (typically one of the below is sufficient):
Tax returns from last two years (front page and signature page only)
Letter from your CPA (accountant) verifying past years’ income and projected current year
Employment letter/offer letter on company letterhead, signed by manager or supervisor stating:
Annual salary
Position/title
Length of employment (start date)
Guaranteed bonuses (if any)
Items Required At Lease Signing
Certified Check, Bank Check, or Money Order as payment for 1st month’s rent and 1 month security deposit payable to landlord.
Certified Check, Bank Check, or Money Order as payment for brokers’ fee payable to Spire Group.
Standard Requirements
Approximate costs of Application Process: (credit reports/application fee) - Both applicants and guarantors are required to submit credit reports, no exceptions.
Credit reports and application fees are $20 per applicant
Lease signing requirements: Once all completed application materials have been submitted, Spire Group Inc. can usually get our clients approved for their apartment or rental property that same day.
Almost all applications are approved within 1-2 business days.
Renter must have completed all application materials. This includes reference letters and supporting documentation.
Approved clients are expected to sign lease immediately and provide necessary funds. Lease signings take place within 24 hours of application approval.
Renters sign their lease and provide necessary funds regardless of when the lease starts.
Funds: Renters generally provide 1st month's rent and equivalent of 1 month's rent as a security deposit.
This money is fully refundable in case a client gets rejected.
When paying the deposit ask for a receipt that states, the money will be refunded if you are rejected.
When signing a lease, renters should have funds for rent, security and broker fee (if any).
Money should be in a certified form Bank Checks: Certified checks or Money orders.
Personal checks are not accepted.
Miscellaneous Fees:
Sometimes landlords/management companies require new tenants to pay a move in deposit.
This fee can range from $250 - $600.
Move in fees are usually refundable as long as there is no damage done to a building while moving.
Some landlords/management companies require renters insurance.
When renting in a condominium or in a co-op, renters should expect processing fees, move in fees and other miscellaneous fees sometimes in total of $250 - $1100 in non-refundable fees.
Be sure to ask your Spire Group Inc. broker if there are additional fees; especially if renting a Condo or Co-Op. Fees for pets or for temporary walls are also common.
The Budget: For obvious reasons, a budget is an important factor in determining what apartment or rental property a renter can afford. The price of a property depends on a variety of factors - size, location, condition, features, neighborhood amenities, schools among others. It is key to determine a budget at the beginning of the application process to have an understanding of what you can afford.
A general price guideline for apartments:
Studios range from $1,800 to $2,500 per month
One bedrooms range from $2,200 to $3,700 per month
Two bedrooms range from $3,500 to $6,500 per month
Three bedrooms range from $4,500 to $10,000 per month.
General Closing Procedures
Approval Requirements differ depending on the landlord/management company and/or on the building. The following are general guidelines that apply in most instances:
Renters need to show income of at least 40-50 times monthly rent.
Rent should be 25% of renters' annual income. Ex: annual income = $100,000, rent $25,000 per year.
Renters must show a secure and stable employment history.
Renters needs to have good credit history. A major component of the approval process is based on the credit report.
What makes a credit report bad?
A couple old late payments are usually ok.
High revolving balances are not good.
Past due payments that are outstanding are bad.
Delinquencies and collections are very bad.
A public record (a day in court) is bad
A Landlord-Tenant record is very bad.
If you think your credit report is bad, advise your Spire Group Inc. broker so they can prepare you for the application process. Landlords/management companies have different ways of dealing with credit problems.
Some landlords/management companies allow renters to increase security deposit while others require a guarantor. Some may simply reject the application. Your Spire Group Inc. broker will advise you in order to save you time, money and frustration.
Renters must show a good rental history.
Rental, credit and employment information is generally referenced and submitted in form of a letter or sometimes by a phone call.
Renters need to have a social security number. If you do not have a social security number or are not applying for one you must have a guarantor co-signing your lease.
Bank Statements: In most cases landlords/management companies require copies of a renters' 3 most recent bank statements from a checking, savings, stock account or any other financial institution.
Renter should have backup detail sheets available upon request.
Most rent application forms require listing bank account information.
Letter of Employment: Renter should get a Letter of Employment on their company's letterhead, with the following:
Position
Length of employment
Annual income.
In majority of cases an offer or an acceptance letter for a new position is not sufficient to show employment.
Letter of Landlord Reference: Letter of reference from a previous landlord is one of the most important reference letters a renter can submit to a landlord/management company who is processing their application.
Pay Stubs: copies of renters' 3 most recent pay stubs are usually required.
Students need to have a guarantor co-sign their lease.
Certain buildings won't accept students. This is legal in NY State and not challengeable in a court or law.
Tax Returns: Some landlords and some management companies require potential renters to include a copy of their most recent Federal Tax Return (1040).
Renters should have their tax return available just in case it is required.
Self-employed renters: if income comes from different sources, you will be required to submit tax returns and a letter from a CPA stating the nature of your business, as well as, projected future income.
Business owners looking to rent are almost always required to submit a tax return.
If renters do not meet the above mentioned criteria there are usually two possible solutions:
Renters can get a co-signer or guarantor to co-sign the lease for you.
Some owners will allow tenants to prepay 6 months to 12 months rent up front.
Guarantor or co-signer: A guarantor or co-signer is a person who guarantees the entire rent for the entire lease term and lease renewals should a renter default on their rent payments. A guarantor can be anyone who agrees to sign on behalf of a renter and who is willing qualified to act as a guarantor.
Qualifications of a guarantor or co-signer: documents required from a guarantor are similar to applicant(s):
Application Form: Same form as the applicant fills out.
Credit Report: A guarantor's credit report must be in good standing.
Federal Tax Returns: A guarantor is required to submit federal tax returns as proof of income.
Guarantor must show annual income of 80-100 times monthly rent.
A Guarantor is not required to be present at lease signing.
In some cases, landlords/management companies require a guarantor to reside in the tri- state area (New York, New Jersey or Connecticut).
Typical Questions Answered
How much is Spire Group Inc.'s broker fee?
Spire Group Inc. does not charge for information provided by the website nor do we charge for viewing of apartments or rental properties with through our brokers. Clients pay a broker's fee ONLY if they rent a property through Spire Group Inc.. If the property is a NO FEE apartment in which case you will not incur brokers fee.
Unfurnished apartments: With a 1-2 year lease, Spire Group Inc. usually charges 15% of annual rent.
Furnished/Short Term rental fees: Please call or email for our discount pricing.
When should a prospective renter begin an apartment or property rental search?
Potential renters should begin their search 4-6 weeks prior to an anticipated moving date. Apartments are not usually ready more than 6 weeks ahead of a lease starting date.
What are Rent Stabilized buildings and/or apartments?
Rent stabilized buildings and/or apartments are buildings whose rent is regulated by the City of New York and State of New York. Rent increases are only about 2-4% annually. Once a renter secures a rent stabilized apartment, they have a right to renew a lease agreement indefinitely. A lot of brownstones, townhouses with more than 4 units and older tenement/elevator buildings in NYC fall into this category. These types of building are owned and operated by small to medium size landlords/management companies.
How much is Spire Group Inc.'s broker fee?
Spire Group Inc. does not charge for information provided by the website nor do we charge for viewing of apartments or rental properties with through our brokers. Clients pay a broker's fee ONLY if they rent a property through Spire Group Inc..
Unfurnished apartments: With a 1-2 year lease, Spire Group Inc. charges ____% of annual rent.
Furnished/Short Term rental fees: ___.
A sizable amount of our listings are made of "No Fee" apartments.
Why choose Spire Group Inc.? What sets it apart from all the others?
Prospective renters seek out Spire Group Inc. Realty's service for 2 reasons:
First, our clients want to find the best deals coupled with the most value they can afford. They understand Spire Group Inc.'s brokers will save them considerable money in the long run. They understand that we offer a variety of services, covering all aspects of their property search. Our clients understand that even though they might be able to find 'No Fee' apartments, our brokers work extremely hard to negotiate the lowest possible monthly-rent payments. This amounts to long term savings that renters who don't use Spire Group Inc. probably would not get.
Second, our clients want to save the time and energy that gets wasted when trying to find and close on a property in NYC's dynamic real estate market. The process can be very frustrating without much result. Our clients come to us in order to utilize the guidance, knowledge and experience of our licensed brokers. Our management team brings over 50 years of combined NYC real estate excellence to the table. Our clients benefit by saving money, time and effort.
What does 'No Fee' mean?
A lot of the apartments prospective renters see listed as 'No Fee' via the internet or advertised in newspapers actually use a flat fee agency. Prospective renters cannot get information about these properties without first paying a flat fee to these agencies. The fee is supposed to give the renter access to the agency's database. Fees can range from $50-$250, even though these agencies are not legally allowed to charge more than $15 for their services. Very few agency subscribers rent their apartments this way. A lot these agencies provide almost no support service to clients. They have little or no staff and they operate basically as internet-information agencies. Therefore they cannot possibly provide the expertise of a licensed broker. Be wary of information obtained in this manner as the information tends to be unreliable and outdated.
How can I find a "No Fee" apartment?
Sometimes landlords/management companies or brokers offer rental properties or apartments for 'No fee' (meaning no broker fees or rental application fees). These 'deals' tend toward being some of the most expensive apartments on the market. Most 'No Fee' apartments are found in high-rise, doorman buildings or newly constructed buildings. Generally 'No fees' are offered because of the sheer size of a building. These apartments are priced fairly and not great deals but they are not bad ones either. Sometime Spire Group Inc. represents certain landlords/management companies or buildings that offer 'No Fee' apartments. These tend to be in luxury/doorman buildings and are priced at $2000 per month and up. In this instance the fees are paid by the landlord/management company. In this case Spire Group Inc. passes on the savings to clients and provides all our services to you free of charge. Not all 'No fee' properties are found in doorman buildings. Sometimes landlords/management companies of elevator or walk up buildings will advertise apartments as 'No Fee' on the web or in newspapers. Generally these apartments are not good deals because landlords avoid additional costs and charge the tenant higher monthly payments. Fairly priced properties with a broker's fee would probably cost LESS money than a 'No Fee' apartment in an elevator or walk up building.
Is having a pet a problem?
Having a dog narrows the selection of properties down to 15% of what is currently available on the market. Cats tend not to be as much of a problem. Clients tell your broker about pets to save time and money.
Besides rent stabilized buildings, what other types of apartment buildings are there in NYC?
There are rental buildings, co-ops, and condo buildings.
Rental buildings: Usually full service, modern, doorman buildings; rents are generally high but are at market level. Annual rent increases might be considerable, depending on market conditions. These buildings are managed by big corporations trying to maximize profit. Spire Group Inc. has access to these listings as well as more affordable more economically priced rental properties. We have access to most of the rental listings in the New York City Area.
Co-op and condo buildings: These are also usually full service buildings. Units are owned by individual owners who are not very familiar with market conditions. It possible to get good deals in co-ops or a condo building. The drawback is that new tenants might have to meet with the co-op or condo board. This process can take over a month and requires the applicant to undergo rigorous screening. Many co-ops do not allow lease renewals. This means more apartment hunting after the first term of your lease. Spire Group Inc. is selective about co-op buildings because of the inflexibility and arbitrary rules.
Seller's Guide
We’re experts in delivering the highest price in the shortest timeframe with seamless, personalized service. In our Seller's Guide you will find valuable reference materials that every seller should have, including:
• Step-by-Step Checklist
• Seller Tips
• Closing Costs
• Partner Information
• Glossary
Seller Tips
1. About Pricing - The Most Important Tip You’ll Ever Get!
Nothing is more essential to the successful sale of your property than strategic pricing. Generating the highest possible price in the shortest timeframe with the least hassle is more science than art. Beware of high-pricing strategies used to win your business that routinely under deliver and can in fact keep your property on the market indefinitely. Instead, set the amount at or just slightly below market value to beat the competition, generate foot traffic, spur competitive bids, and get you the top results you deserve.
2. Disconnect Your Emotions
The beautiful handmade dollhouse in your den is surely a treasure – but not for buyers. You must de-personalize your home to the point of anonymity. Buyers need to envision their potential home, not yours. A blank canvas is the only effective way to accomplish this. Buyers will instinctively fill the space with ideas that make their own hearts sing. De-clutter your space and remove all photos and knick-knacks that remind prospects this house currently belongs to someone else.
3. Renovations That Work
If you only upgrade one thing in your home ... paint the walls. Nothing positively effects buyer perception as much as a clean coat of neutral paint (linen white or beige). This relatively low-cost investment creates an impression of grander space, brightness, and cleanliness that pays you back tenfold. Not far behind are flooring and cabinetry. When items visible to the naked eye appear worn, it only invites concern that built-in construction like plumbing and electricity are in poor condition. Make their first impression the right one. Whichever improvements you take on, keep all payment receipts, as these augment the value of your home.
Standard Requirements
Standard Fund Requirements
The Budget
Location, size, amenities, building type, school locations and nearness to public transportation are crucial to determining what a property will cost. We suggest that buyers review financing options to determine what amount of money they can put toward a deposit and then determine what they can afford for a monthly mortgage payment. Some people may want to see if they pre-qualify for mortgage status in order to know what budget they will be working within.
Type of Property
The next thing to determine would be the type of property you'd like to buy. Would you like an apartment, condominium, coop or commercial property?
Apartment Purchase
For apartment purchases there is no approval process, besides normal financial inquiries. Buyers are entitled to have complete control over any renovations they wish to make. Maintenance costs are the sole responsibility an owner and with this the owner gets total control over maintenance and repairs. Transferring deeds or reselling an apartment do not require approval. The size of a property can vary according to a budget and location of the property.
Condominium Purchase
Condo owners buy the apartment and also own a percentage of the common building areas, i.e. entrance areas, hallways and recreational areas etc. The condominium is considered real property; because of this fact, owner's have the right to do use the property any way he/she sees fit. Owners are subject to pay property taxes which can either be escrowed into a part of a monthly mortgage payment or which are paid annually as an expense. Monthly maintenance fees are generally paid to the building's condominium association.
Coop Purchase
Buying a coop is tricky, but Spire Group Inc.'s team of qualified agents can help. When purchasing a cooperative apartment the purchaser is really purchasing shares in a cooperation. The shares correspond to the units in which you live. coop fees include a monthly mortgage payment and maintenance fees for the building. Maintenance fees are sometimes high but both mortgage payments and maintenance fees generally result in higher tax deductibles.
Estimated Fees
Cooperative Apartment:
For Seller: Broker Fees: Are typically 6%. Fees vary according to property size and amount of marketing
Attorney Fees: Approximately $1,500
Managing Agent: $450
Flip Tax: Consult Managing Agent
Stock Transfer Tax: $.05 per share
Move Out Deposit Fee: $1,000
New York City Transfer Tax: 1.00% of price up to $500,000 1.425% of entire price when it exceeds $500,000
New York State Transfer Tax: 0.4% (.004) of price
Payoff Bank Attorney: If seller has mortgage $30
UCC-3 Filing Fee: If seller has mortgage $350
For Purchaser:
Own Attorney Fee: Approximately $1500
Bank Fees/Application/Credit/Appraisal/Bank Attorney/Miscellaneous Fees: $1,600
Short-Term Interest: One month max*
Move-In Deposit: $1000
Managing Agent or Co-op Attorney Fee: $600
Lien Search: $300
Maintenance Adjustments: One month tax
Mansion Tax: 1% of entire price when price exceeds $1,000,000
*Prorated for month of closing
Condominium/Townhouse:
For Seller: Broker Fees: Are typically 6%. Fees vary according to property size and amount of marketing
Attorney Fees: Approximately $1,500
Managing Agent: $450
Move Out Deposit Fee: $1,000
New York City Transfer Tax: 1.00% of price up to $500,000 1.425% of entire price when it exceeds $500,000
New York State Transfer Tax: 0.4% (.004) of price
Miscellaneous Title Company Fees: If seller has mortgage $200
For Purchaser:
Approximately $1,500
Bank Fees: Points 2%
Application/Credit/Appraisal/Bank Attorney/Miscellaneous Fees: $1,600
Short-Term Interest: One month max*
Real Estate Tax: Escrows 2-6 months
Recording Fee: $200
Mortgage Tax: 1.75% of mortgage on loans under $500,000 or 1.875% of entire amount on loans over $500,000
Fee Title Insurance: Approximately $450 per $100,000
Mortgage Title Insurance: Approximately $200 per $100,000
Miscellaneous Title Charges: $300
Managing Agents Fee: $250
Adjustments:
Common charges: One month max*
Real Estate Taxes: 1 to 6 months
Mansion Tax: 1% of entire price when price exceeds $1,000,000
*Prorated for month of closing
*Expect to pay eight months Real Estate Taxes. These taxes are combined between seller as an adjustment and escrow established by lender.
*Note: When purchasing condos from a sponsor, the purchaser will be required to pay New York City and New York State Transfer Taxes; see above for amounts.
*Also, buyers are required to pay sponsors attorneys fee; this fee is approximately $1,000.
Multi-Family Residential/Commercial Property
For Seller:
Broker Fees: Are typically 6%. Fees vary according to property size and amount of marketing
Attorney Fees: Approximately $5,000
New York City Transfer Tax: 1.425% of price up to $500,000 2.625% of entire price when it exceeds $500,000
New York State Transfer Tax: 0.4% (.004) of price
Payoff Bank Attorney: If Seller has mortgage - $350 Miscellaneous $200 Transfer Security Deposit T.S.D.
For Purchaser:
Own Attorney Fee: Approximately $5,000
Bank Fees: Points 2%>
Application/Credit/Appraisal/Bank Attorney/Miscellaneous Fees: $5,000-$10,000
Short-Term Interest: One month max*
Mortgage Tax: 2.75% of entire amount on loans over $500,000
Real Estate Tax: Escrows 2-6 months
Fee Title Insurance: Approximately $450 per $100,000
Mortgage Title Insurance: Approximately $200 per $100,000
Miscellaneous Title Charges: $1,000
Adjustments: Rents* T.B.D. Real Estate Taxes 1-6 months *Prorated for month of closing
General Closing Procedures
General Closing Procedures:
What is a closing?
A closing is where a buyer gives a seller money in exchange for ownership and title to a particular property. This bargained for exchange, or consideration, transfers ownership and title of the property. The seller also needs to sign over other documents including a deed. The place of closing is normally at the bank attorney's office. The parties present will be: seller, bank attorney, real estate brokers, sellers attorney, buyers attorney and title closer.
Buyers need to apply for a mortgage as soon as the contract is signed by both parties. The mortgage process takes up to 45 days and can involve several procedures:
If buying an apartment, coop, condo or any other property with a board or association, prepare your application package with your Spire Group Inc. broker. These packages tend to vary from building to building. Most boards use the same financial requirements as the bank. Keep an extra copy of your mortgage application and any related documentation. Buyers, are required to get personal, professional and financial letters of reference. If renting, get a letter of reference from your current landlord. Ask what information is needed and for copies of sample reference letters. The board package is important, therefore, answer all questions in a clear, concise manner and give an accurate description of your financial qualifications. Before submitting your application package, write a cover letter, organize the presentation and review it with your Spire Group Inc. broker.
The board package is submitted after a buyer receives his/her mortgage-loan commitment letter; it is submitted to a building's Managing Agent. The Managing Agent checks the application, evaluates credit and references, and then submits the package to the board. The board then reviews the completed package. Additional information may be requested or if the package is passed, an interview is scheduled. There is either an interview committee that approves new applicants or a board will do it during its monthly meetings. Your Spire Group Inc. broker can assist you as to the date, time and any other preparations for your interview.
Closing is scheduled after the board approves an application package and completes the interview process. This generally takes 2 weeks for final approval and can vary depending on the availability of the parties involved; i.e. managing agent, buyer, seller, lawyers and banks.
General Closing Costs Defined:
Additional Fees: Sometimes borrowers are required to pay additional fees. Some of these including Wire Fees, Tax Service, Survey Costs, Flood Certification, Settlement Charges, Messenger Fees, Sub-Escrow Fees, and Transfer Tax. Ask your broker to explain these fees.
Appraisal Fee: Fee charged which estimates whether or not a property is worth enough to support a loan. A qualified appraiser will look over the property and produce a report.
Attorney Fee: Fees paid to attorney representing you in real estate purchase (some closes require you to pay bank attorney fees or with condos, sponsor fees for sponsor attorney maybe required. Fees vary according to type of property and $ value of the property.
Condo Board Application or Co-op flip tax: Fees charged for processing condo applications or coop shares.
Credit Report: generally between $25 - $100 per report.
Document Preparation Fee: fee charged by bank or mortgage company for preparation of paperwork.
Escrow: (Taxes, Insurance) - In this case money figured into a mortgage for certain conditions like taxes and insurance etc. (see real estate terms defined for a more complete definition).
Inspection Fee: fee for inspection of property to make sure it is up to code and livable
Homeowner's Insurance: is required to protect against property damage from hazards; i.e. fires, floods etc.
Mortgage Insurance: Usually loans made from a down payment of less than 20% require mortgage insurance. This protects a lender if a borrower defaults on home loans.
Origination Fee/Points: Depending on the type of a loan and the rate a mortgage seeker chooses, he/she may pay points. 1 point equals 1% of the total loan amount.
Prepaid Interest: This amount pays the interest due from the date of funding to the end of the current month.
Recording/Transfer Fees: This covers the costs of changing the property title in official county records.
Title Insurance and Search: Fees that are charged for a title search and insurance fees. A title search is used to verify that that the seller is the true owner of the property being sold and that the seller has the right to sell it. Title insurance protects a lender in the event of a lien or other problems with the title for the property in question, that was not disclosed at the time of sale.
Time Until Closing: Generally sales take between 3-5 months to close depending on various factors. The most common factors affecting closing include: mortgage & financing, condo/coop board approval and negotiation.
Recommended Amount To Put Down: The amount needed to purchase property varies according on the type, size and location of a property. For example is the property a single or two family dwelling, coop or condo. Spire Group Inc. recommends being prepared to pay about 10-20% of total price. Some properties may accept a smaller percentage for qualification. You will also need to set aside additional monies for closing costs.
Contract of Sale: is a legally binding agreement between a purchaser and a seller in which each party gives consideration, (bargains for an exchange) to define the terms of the sale.
NOTE: Sometimes there are other fees which may be charged. This generally occurs when the property is a condo or coop. Our brokers will be happy to discuss these with you.
The mortgage broker compiles the buyer's financial information and then presents the loan application
The bank sends an appraiser to assess the property
The underwriters review the loan and issue a commitment letter.
Typical Questions Answered
Typical Questions Answered
What do I need to facilitate the buying process so I do not miss out on a great deal?
The New York City real estate market is extremely competitive. The most desirable and affordable properties can go to contract in a matter of days. The most important factors in getting a deal to closing include the following:
Annual Income - Generally you can borrow up to about 2xs gross annual income. Monthly mortgage and maintenance payments should not exceed 1 weeks gross salary. If you have significant liquid assets you may be able to borrow more.
Financial Statements - should be prepared by an accountant. It should lists net worth including assets, liabilities, salary, bonus, etc. Spire Group Inc. submits offers with financial validation. The most qualified buyers are usually the ones whose offers are accepted. Having a complete financial statement is very important when there is an apartment or property with multiple bids.
Asset Valuation - A down payment alone does not qualify a buyer for a coop or a condo in Manhattan. Usually, a coop board or condo association wants guarantees for mandatory maintenance fees. They want assurances against unexpected loss of income. Many coops require liquid assets totaling 1 year's worth of maintenance and mortgage payments after closing. Also, some buildings require liquidity up to three years of combined costs. Ask your Spire Group Inc. Broker to assist you with specific requirements.
What is the importance of a credit check and how does it fit into the buying process?
A credit check is generally performed by a mortgage broker and pertains to your credit history. Resolve disputed claims and have them removed immediately from your credit report. Keep all pertinent documentation which illustrates that the issue is resolved. Also, we recommend buyers choose a mortgage broker because mortgage brokers can save time and money. We work with various brokers throughout the New York Area; if you are interested ask your Spire Group Inc. broker for more information.
Question: What does being pre-qualified mean?
Prequalified, also called pre-approved, is when a perspective buyer tells a lender income level, debt and credit information, so the lender can provide an estimated loan amount, based on these criteria. Being a prequalified buyer will reassure a seller that any offers made are bona fide and that a buyer can actually make the purchase. In fact, most offers submitted by Spire Group Inc. are often accompanied by a buyer's pre-qualification letter; this letter notify sellers that financing is an option.
Ask your Spire Group Inc. broker to provide you with information about financing, estimated monthly mortgage payments, and any other necessary qualifications. Pre-approval letters make for strong offers because the lender has already pulled a credit report, checked debt/to/income ratio and done an analysis of your finances. Also, it is preferable to be pre-approved so that there will be no surprises when the credit report is received.
Why select a real estate attorney?
The real estate market in New York City is a very dynamic market. Having a real estate attorney who specializes in the NYC market is very important. First, they know the intricacies of the laws and regulations. Second, they can respond quickly to any problems that arise and can therefore expedite the closing. Ask your Spire Group Inc. Broker to assist you in selecting a qualified real estate attorney.
What is a closing?
A closing is where a buyer gives the seller money in exchange for ownership and title to a particular property. This bargained for exchange, or consideration, transfers ownership of the property. The seller also needs to sign different documents including a deed. The place of closing is normally at the bank attorney's office. The parties present will be: seller, bank attorney, brokers, seller's attorney, buyer's attorney and title closer.
What are the steps in the application process?
For mortgage applications and for coop or condo boards, buyers need to gather relevant financial documentation. Required documentation includes 2 months of most recent bank statements, brokerage statements and any other assets. In addition to current income verification, boards and banks require a minimum of 2 years of federal income tax returns. Self-employed buyers need to provide at least 3 years of federal tax returns and a letter from an accountant verifying income.
When do I need to move? Find a target date for moving. If looking to finance, expect to take about 3 months from purchase to close. Buyers, begin your search 4-6 months before prior to an estimated moving date.
Question: Where do I want to live?
New York City is a city of diverse neighborhoods, all with their own unique appeal. Before beginning your search, decide what is important. For example, proximity to public transportation or proximity to your job. Are your preferences for a quiet residential neighborhood or a bustling hub of activity and nightlife? Try to be open to different areas as sometimes neighborhoods other than your first choice are more affordable and offer many of the same features. Visit our detailed neighborhood guide for information on all our neighborhoods. Also, ask your Spire Group Inc. broker to include any recommended, areas as you may not be aware of them and they may best suit your needs.
What is the best way to win over sellers?
If you really want to buy a particular property that has a lot of interest, sell the seller on the fact that you are a qualified buyer. It doesn't matter whether you plan to buy a studio or a building, chances are that there is a limited number of properties available in your price range. In a competitive market attractive properties can be in contract before they appear in the classified ads.
Brokers tend to notify serious buyers first. Make sure that you are ready to buy; have all your paperwork in order including financial documentation and pre-qualification for a mortgage. Communicate yours needs, budget, timetable, and neighborhood preferences.
Make yourself available to view properties. By being flexible with viewing properties during the workweek, you can avoid weekends shoppers, congested open houses and a lot of the best buildings tend to show properties between 10-3, M-F.
How do I make the deal happen? After finding the property you want, immediately make a verbal offer. Consult your Spire Group Inc. broker for the best ways to extend an offer to a seller. There are a lot of different reasons, other than money, that influence a seller in choosing the right buyer. If the verbal offer is accepted, have your broker get confirmation of the offer and acceptance in writing. Once the written offer is accepted and signed, your Spire Group Inc. broker prepares a transaction summary. This is sent to the seller's and to the buyer's attorneys for review. Using the signed offer and acceptance, the seller's attorney then prepares a contract of sale. After the buyer's attorney reviews the contract, negotiates terms and evaluates the property's financial statements, the buyer then signs the contract and presents the down-payment check. Generally, down-payments range from 10% - 20% of the contract of sale. This money is often held in the selling attorney's escrow account to be sent to the seller's attorney. The seller then executes the contract.
Note*: Verbal offers are not legally binding. In fact, in the New York City area an offer is legally binding when both the buyer and the seller sign a contract of sale. Sometimes sellers are tempted by higher offers. To avoid problems, be prepared and have your attorney move quickly through reviewing financials and completing the contract."
Buyer's Guide
A TIMELINE FOR PURCHASING
1. Mortgage Pre-Approval: (1 - 2 days)
A mortgage professional, preferably one who specializes in Manhattan real estate, will calculate your financials so you can determine what you can afford. Though each building is different, typically purchasing a condominium will require at least 10% down, and a cooperative will require at least 20 % down.
2. Find an apartment: (1 - 6 months)
Though the search time is highly variable, the average person sees 5-20 apartments before choosing one. Individuals who conduct a bulk of their research online typically view only 4-5 properties before deciding.
3. Negotiations: (1 hour - 2 weeks)
Once you decide to make an offer on a property, some items in the apartment may be negotiable – from rugs and curtains to washer/dryers, light fixtures and appliances. Apartments are delivered " as is and swept clean".
4. Sign a Contract: (1 - 2 weeks)
It is customary for a real estate attorney to represent each buyer and seller. The seller’s attorney draws up the contract to be examined by the buyer’s attorney. Upon agreement, the buyers sign the contract and send a check for the down-payment. The contract is binding only after the contract is signed by both parties.
5. Apply for and get a mortgage: (3 - 8 weeks)
Once the contract is executed, a commitment letter from the lender must confirm mortgage approval. The Board requires this proof of financing as part of the application package.
6. Complete a Co-op or Condo Board Package: (1 - 4 weeks)
Cooperative apartment buildings require a complete Board package to be approved and an interview to be conducted before a closing can take place. Condominiums only require a complete Board package to be approved, an interview is not usually required. In order to review a potential purchaser, the Board of Directors for a Coop demand extensive information in a Board Package. Your agent will guide you through all of the requisite materials, ensuring that all materials needed are complete and in order. Typically included in this application are: a financial statement, all requisite support for your financial statement, two years of tax returns, bank statements, letters of personal and financial reference, a letter of employment verification, the contract of sale, bank documents (if financing) indicating that your loan is in place. Your Spire agent will then forward the package to the managing agent of the building. The managing agent will inspect the package to ensure it is complete and forward it to the Board of Directors, who will then decide to interview (or reject) the applicant based on the "package."
7. If purchasing a Co-op: Board Interview (30 min – 1 hour)
Co-op boards typically meet once a month and some Boards do not meet in August. Every Board is different, but generally, a Board meeting will be held in the evening on a weeknight. Although a board interview may be granted, this does not guarantee board approval. If your application meets initial approval, you will be invited to be interviewed by the Board. Your Spire agent will prepare you for the interview. He/She will convey what to expect and coach you so as to maximize our chance for approval. After approval by the Board, the attorney will schedule a day and time convenient for all parties for the closing.
8. Receive Approval from Board: (1 day – 1 week)
The managing agent will generally alert the seller's broker when a potential buyer has passed the board.
9. Schedule a Closing: (1 - 2 weeks)
Managing agents generally set the date for closings, and lawyers for sellers and buyers coordinate with the appropriate banks on available dates and times. Your attorney will provide you with a list of checks to bring, which will typically include a second check for at least 10% of the purchasing price, and will let you know the date, time, and place of the closing.
10. Closing: (1 - 2 hours)
Bring your checkbook, making sure to have a few extra checks. Your closing should run approximately 1-2 hours, as long as everyone is on-time and all paperwork is complete and in order. Possible delays may occur due to financing, Board approval, or closing date discrepancies. With the help of your Spire agent, such contingencies are likely to be avoided through preparation.
BUYER TIPS
CHOOSING A PROPERTY TYPE
The New York City residential market consists primarily of Co-ops (75%) and Condos (25%), with Cond-ops a rare alternative (<1%). Each has distinct advantages and disadvantages. Single-family, multi-family, and investment properties are also available.
CO-OP (Co-operatives)
Building owned by a corporation; you are a shareholder. This is a unique form of ownership found almost exclusively in Manhattan. You, as purchaser, own stock in said corporation, which entitles you to a ‘proprietary lease.’ Generally, the larger your apartment, the more shares of the corporation you own, though factors such as location in the building, view and light are also taken into account. Co-op shareholders contribute a monthly maintenance fee to cover the building expenses, including items such as heat, hot water, insurance, staff salaries, real estate taxes, and the underlying mortgage of the building.
CONDOMINIUM
Real property, like owning a house. The buyer receives a deed of ownership, and owns what is ‘between the walls.’ The appeal of owning a condo is the low down payment, providing maximum financing ability and that there is typically no Board approval, though requirements are becoming stricter. Condo pricing remains 10-30% higher than for co-ops. Each unit has a separate tax lot and each purchaser must pay individual property taxes on his/her unit - these taxes are deductible. The deed also grants a small percentage of the ‘common elements’ of the building such as the halls, stairwells, basement, etc. Each owner pays a ‘common charge’ to the condominium association to pay for items such as heat, hot water, repairs and employee salaries. This monthly fee is not tax deductible.
COND-OPS
Co-op residential with designated commercial condo space. The homebuyer is still a shareholder in a corporation – so this is still by definition a co-op. A common misconception is that cond-ops are co-ops with condo rules. However, this is not necessarily the case. While cond-ops tend to be less restrictive, the condo aspect only applies to the businesses in the building.
SINGLE-FAMILY HOME
A building intended to house one family, (i.e., a detached stand-alone home). Single family homes are generally more expensive than co-ops or condominiums and there can be additional costs to renovate. It is worth investing in this type of property if you value complete freedom and privacy; but you also must be able to take full responsibility for any repairs or renovations that need to be done. Though a suburban staple, single-family homes make up a small fraction of NYC home sales.
MULTI-FAMILY HOME
A building intended to house more than one family, often managed by an investor or tenant owner. Although the initial purchase price of a two or three family home may be slightly more than the cost of a single family home, you may actually be able to borrow more money and the house may be more affordable because you will collect rent from your tenants. The rent you collect will increase your income and will provide you with more money to pay your mortgage. Therefore, the bank or mortgage lender may be more willing to take a larger mortgage or may accept a lower household income because they know that you will also be collecting rent. A relatively small number of NYC brownstones fall into this category.
Advantages/Disadvantages of Each Property Type
Co-op Board Interview Tips
With the majority of NYC apartments being co-op, the Board Interview is a required step for most homebuyers in the city. And while applicants are naturally concerned about possible rejection, the board interview is actually more formality than anything, typically resulting in approval by a wide margin.
Rest assured that simply being invited to the board interview is a good sign – meaning that you have already been vetted and appear likely to gain approval before you walk in the door. So, if you are asked to interview, your paperwork has likely already checked out.
The sit down is an opportunity for the board members to ask you specific questions about your application and get to know you better, both personally and professionally. The style of the meeting can be formal or informal, depending on the building and its members. In either case, you’ll want to incorporate the following tips as you prepare to become their newest shareholder.
1. Dress to impress and arrive promptly
Treat the meeting like a job interview in which you are the leading candidate. Act naturally and professionally.
2. Be prepared for probing questions.
The board has great latitude in the kinds of questions it can ask about your personal life. Do not react to any challenging or invasive questions. Answer all questions concisely. Never volunteer any information that you are not asked for.
3. Familiarize yourself with the details of your own application.
You should be able to quickly and concisely answer any questions asked about your application, without having to refer to it regularly. Thirty seconds of paper shuffling in response to a question about your financial standing or employment history will not inspire confidence. That said, bring a copy of the application with you just in case.
4. Couples should decide in advance who will answer certain types of questions.
For example, one of you may agree to answer all financial questions while the other will address all other questions. Try to avoid discussing your answers with your spouse in front of the Board.
5. Do not try to sell yourself.
Do not take the meeting as an opportunity to express what an amazing neighbor you are going to be. Just answer the questions that you are asked as simply as possible and let the Board direct the conversation. Applicants are rarely turned down for being boring.
6. Use these recommended responses to questions about your building participation.
Q: Are you’re interested in joining the board or becoming an active member of the building/community?
A: Yes
Q: When would you like to move in?
A: If we’re offered the opportunity to become shareholders, we’d love to move on .
7. Never volunteer any information you are not asked for.
Do not engage in any unsolicited conversations except for pleasantries at the beginning and end of the meeting. Avoid revealing any more information than what is specifically asked for. Oversharing is the one variable that can turn your likely approval the other way, since you could unintentionally give them cause for concern.
8. Do not ask questions of the board.
Like oversharing, questions can unintentionally convey negative information to the Board. For example: “Do you have any plans to renovate the lobby?” is the kind of seemingly innocent question which may offend the board member who was in charge of the lobby renovation or suggest that you intend to campaign for large capital expenditures in the building. If you have any additional questions, direct them to your real estate agent or your attorney. Remember, you have already agreed to purchase the apartment. There is nothing else you should need to know at this point, and if there is, save it for after your approval. If asked for questions, a better response is, ‘Building management, my broker, and attorney have already answered all of our questions so if given the opportunity to become shareholders, we’re excited to move forward’.
9. A short interview is better than a long one.
While there are no hard and fast rules, a short, cordial interview with few board questions and remarks is often indicative of an easy approval.
10. Do not expect an answer at the end of the meeting.
Most Boards do not give their decision until a day or two after the meeting. Your real estate agent and attorney will take the necessary steps to determine if you have been approved.
Following these tips will go a long way to getting you approved. In most cases, the approval is really yours to lose at this final confirmation stage. So relax and be positive. You’ve got this!
FREQUENTLY ASKED QUESTIONS
1. How does working with Spire help me?
All Spire agents are senior-level real estate experts with proven track records that meet the highest standards of market knowledge, neighborhood specialization, and integrity. Each agent specializes in niche markets that resonate with them and the people they serve, resulting in smarter solutions for buyers, sellers, landlords, investors, and developers that open up new possibilities and enrich lives. Commitment to better living for everyone we touch is what drives our success.
Your agent will work along side his/her sales manager to save you time by customizing a list of properties tailored to your financials and specifications
Your agent will make sure that you are an informed buyer by educating you about the current market, your options, the process and more
Your agent will aggressively negotiate on your behalf, making sure you get the best deal
2. Should I use multiple brokers, from different real estate firms to make sure I don’t miss any properties?
Spire agents have access to every property in NYC. Our listings department works around the clock, with access to the top databases, to make sure that our inventory is always comprehensive and current. Furthermore, Spire cooperates with numerous other agencies, sponsors and owners to guarantee that no property is overlooked. Working with only one agent not only doesn’t limit your options, but in fact makes the search process more efficient.
3. How can I have access to properties under exclusive deals with other real estate firms?
An exclusive listing means that the seller of that property is represented exclusively by his or her selling broker. Your Spire agents will be able to show you the property and represent you throughout the process. You won’t miss out on any properties or pay any extra fees.
4. Do I have to pay a broker fee?
No. Sales commissions are paid by the seller, not the buyer. When a property is co-brokered, the commission is shared between the buyer’s broker and the seller’s broker.
Standard Requirements
Standard Requirements
The Budget: Location, size, amenities, building type, school locations and nearness to public transportation are crucial to determining what a property will cost. We suggest that buyers review financing options to determine what amount of money they can put toward a deposit and then determine what they can afford for a monthly mortgage payment. Some people may want to see if they pre-qualify for mortgage status in order to know what budget they will be working within.
Type of Property: The next thing to determine would be the type of property you'd like to buy. Would you like an apartment, condominium, coop or commercial property?
Apartment Purchase: For apartment purchases there is no approval process, besides normal financial inquiries. Buyers are entitled to have complete control over any renovations they wish to make. Maintenance costs are the sole responsibility an owner and with this the owner gets total control over maintenance and repairs. Transferring deeds or reselling an apartment do not require approval. The size of a property can vary according to a budget and location of the property.
Condominium Purchase: Condo owners buy the apartment and also own a percentage of the common building areas, i.e. entrance areas, hallways and recreational areas etc. The condominium is considered real property; because of this fact, owner's have the right to do use the property any way he/she sees fit. Owners are subject to pay property taxes which can either be escrowed into a part of a monthly mortgage payment or which are paid annually as an expense. Monthly maintenance fees are generally paid to the building's condominium association.
Coop Purchase : Buying a coop is tricky, but Spire Group Inc.'s team of qualified agents can help. When purchasing a cooperative apartment the purchaser is really purchasing shares in a cooperation. The shares correspond to the units in which you live. coop fees include a monthly mortgage payment and maintenance fees for the building. Maintenance fees are sometimes high but both mortgage payments and maintenance fees generally result in higher tax deductibles.
Estimated Fees:
Cooperative Apartment:
For Seller: Broker Fees: Are typically 6%. Fees vary according to property size and amount of marketing
Attorney Fees: Approximately $1,500
Managing Agent: $450
Flip Tax: Consult Managing Agent
Stock Transfer Tax: $.05 per share
Move Out Deposit Fee: $1,000
New York City Transfer Tax: 1.00% of price up to $500,000 1.425% of entire price when it exceeds $500,000
New York State Transfer Tax: 0.4% (.004) of price
Payoff Bank Attorney: If seller has mortgage $30
UCC-3 Filing Fee: If seller has mortgage $350
For Purchaser:
Own Attorney Fee: Approximately $1500
Bank Fees/Application/Credit/Appraisal/Bank Attorney/Miscellaneous Fees: $1,600
Short-Term Interest: One month max*
Move-In Deposit: $1000
Managing Agent or Co-op Attorney Fee: $600
Lien Search: $300
Maintenance Adjustments: One month tax
Mansion Tax: 1% of entire price when price exceeds $1,000,000
*Prorated for month of closing
Condominium/Townhouse:
For Seller: Broker Fees: Are typically 6%. Fees vary according to property size and amount of marketing
Attorney Fees: Approximately $1,500
Managing Agent: $450
Move Out Deposit Fee: $1,000
New York City Transfer Tax: 1.00% of price up to $500,000 1.425% of entire price when it exceeds $500,000
New York State Transfer Tax: 0.4% (.004) of price
Miscellaneous Title Company Fees: If seller has mortgage $200
For Purchaser:
Approximately $1,500
Bank Fees: Points 2%
Application/Credit/Appraisal/Bank Attorney/Miscellaneous Fees: $1,600
Short-Term Interest: One month max*
Real Estate Tax: Escrows 2-6 months
Recording Fee: $200
Mortgage Tax: 1.75% of mortgage on loans under $500,000 or 1.875% of entire amount on loans over $500,000
Fee Title Insurance: Approximately $450 per $100,000
Mortgage Title Insurance: Approximately $200 per $100,000
Miscellaneous Title Charges: $300
Managing Agents Fee: $250
Adjustments:
Common charges: One month max*
Real Estate Taxes: 1 to 6 months
Mansion Tax: 1% of entire price when price exceeds $1,000,000
*Prorated for month of closing
*Expect to pay eight months Real Estate Taxes. These taxes are combined between seller as an adjustment and escrow established by lender.
*Note: When purchasing condos from a sponsor, the purchaser will be required to pay New York City and New York State Transfer Taxes; see above for amounts.
*Also, buyers are required to pay a sponsors attorneys fee; this fee is approximately $1,000.
Multi-Family Residential/Commercial Property
For Seller:
Broker Fees: Are typically 6%. Fees vary according to property size and amount of marketing
Attorney Fees: Approximately $5,000
New York City Transfer Tax: 1.425% of price up to $500,000 2.625% of entire price when it exceeds $500,000
New York State Transfer Tax: 0.4% (.004) of price
Payoff Bank Attorney: If Seller has mortgage - $350 Miscellaneous $200 Transfer Security Deposit T.S.D.
For Purchaser:
Own Attorney Fee: Approximately $5,000
Bank Fees: Points 2%>
Application/Credit/Appraisal/Bank Attorney/Miscellaneous Fees: $5,000-$10,000
Short-Term Interest: One month max*
Mortgage Tax: 2.75% of entire amount on loans over $500,000
Real Estate Tax: Escrows 2-6 months
Fee Title Insurance: Approximately $450 per $100,000
Mortgage Title Insurance: Approximately $200 per $100,000
Miscellaneous Title Charges: $1,000
Adjustments: Rents* T.B.D. Real Estate Taxes 1-6 months *Prorated for month of closing
General Closing Procedures
General Closing Procedures:
What is a closing?
A closing is where a buyer gives a seller money in exchange for ownership and title to a particular property. This bargained for exchange, or consideration, transfers ownership and title of the property. The seller also needs to sign over other documents including a deed. The place of closing is normally at the bank attorney's office. The parties present will be: seller, bank attorney, real estate brokers, sellers attorney, buyer's attorney and title closer. Buyers need to apply for a mortgage as soon as the contract is signed by both parties. The mortgage process takes up to 45 days and can involve several procedures:
If buying an apartment, coop, condo or any other property with a board or association, prepare your application package with your Spire Group Inc. broker. These packages tend to vary from building to building. Most boards use the same financial requirements as the bank. Keep an extra copy of your mortgage application and any related documentation. Buyers, are required to get personal, professional and financial letters of reference. If renting, get a letter of reference from your current landlord. Ask what information is needed and for copies of sample reference letters. The board package is important, therefore, answer all questions in a clear, concise manner and give an accurate description of your financial qualifications. Before submitting your application package, write a cover letter, organize the presentation and review it with your Spire Group Inc. broker.
The board package is submitted after a buyer receives his/her mortgage-loan commitment letter; it is submitted to a building's Managing Agent. The Managing Agent checks the application, evaluates credit and references, and then submits the package to the board. The board then reviews the completed package. Additional information may be requested or if the package is passed, an interview is scheduled. There is either an interview committee that approves new applicants or a board will do it during its monthly meetings. Your Spire Group Inc. broker can assist you as to the date, time and any other preparations for your interview.
Closing is scheduled after the board approves an application package and completes the interview process. This generally takes 2 weeks for final approval and can vary depending on the availability of the parties involved; i.e. managing agent, buyer, seller, lawyers and banks.
General Closing Costs Defined:
Additional Fees: Sometimes borrowers are required to pay additional fees. Some of these including Wire Fees, Tax Service, Survey Costs, Flood Certification, Settlement Charges, Messenger Fees, Sub-Escrow Fees, and Transfer Tax. Ask your broker to explain these fees.
Appraisal Fee: Fee charged which estimates whether or not a property is worth enough to support a loan. A qualified appraiser will look over the property and produce a report.
Attorney Fee: Fees paid to attorney representing you in real estate purchase (some closes require you to pay bank attorney fees or with condos, sponsor fees for sponsor attorney maybe required. Fees vary according to type of property and $ value of the property.
Condo Board Application or Co-op flip tax: Fees charged for processing condo applications or coop shares.
Credit Report: generally between $25 - $100 per report.
Document Preparation Fee: fee charged by bank or mortgage company for preparation of paperwork.
Escrow: (Taxes, Insurance) - In this case money figured into a mortgage for certain conditions like taxes and insurance etc. (see real estate terms defined for a more complete definition).
Inspection Fee: fee for inspection of property to make sure it is up to code and livable
Homeowner's Insurance: is required to protect against property damage from hazards; i.e. fires, floods etc.
Mortgage Insurance: Usually loans made from a down payment of less than 20% require mortgage insurance. This protects a lender if a borrower defaults on home loans.
Origination Fee/Points: Depending on the type of a loan and the rate a mortgage seeker chooses, he/she may pay points. 1 point equals 1% of the total loan amount.
Prepaid Interest: This amount pays the interest due from the date of funding to the end of the current month.
Recording/Transfer Fees: This covers the costs of changing the property title in official county records.
Title Insurance and Search: Fees that are charged for a title search and insurance fees. A title search is used to verify that that the seller is the true owner of the property being sold and that the seller has the right to sell it. Title insurance protects a lender in the event of a lien or other problems with the title for the property in question, that was not disclosed at the time of sale.
Time Until Closing: Generally sales take between 3-5 months to close depending on various factors. The most common factors affecting closing include: mortgage & financing, condo/coop board approval and negotiation.
Recommended Amount To Put Down: The amount needed to purchase property varies according on the type, size and location of a property. For example is the property a single or two family dwelling, coop or condo. Spire Group Inc. recommends being prepared to pay about 10-20% of total price. Some properties may accept a smaller percentage for qualification. You will also need to set aside additional monies for closing costs.
Contract of Sale: is a legally binding agreement between a purchaser and a seller in which each party gives consideration, (bargains for an exchange) to define the terms of the sale.
NOTE: Sometimes there are other fees which may be charged. This generally occurs when the property is a condo or coop. Our brokers will be happy to discuss these with you.
The mortgage broker compiles the buyer's financial information and then presents the loan application
The bank sends an appraiser to assess the property
The underwriters review the loan and issue a commitment letter.
Typical Questions Answered
Typical Questions Answered:
What do I need to facilitate the buying process so I do not miss out on a great deal?
The New York City real estate market is extremely competitive. The most desirable and affordable properties can go to contract in a matter of days. The most important factors in getting a deal to closing include the following:
Annual Income - Generally you can borrow up to about 2x gross annual income. Monthly mortgage and maintenance payments should not exceed 1 weeks gross salary. If you have significant liquid assets you may be able to borrow more.
Financial Statements - should be prepared by an accountant. It should lists net worth including assets, liabilities, salary, bonus, etc. Spire Group Inc. submits offers with financial validation. The most qualified buyers are usually the ones whose offers are accepted. Having a complete financial statement is very important when there is an apartment or property with multiple bids.
Asset Valuation - A down payment alone does not qualify a buyer for a coop or a condo in Manhattan. Usually, a coop board or condo association wants guarantees for mandatory maintenance fees. They want assurances against unexpected loss of income. Many coops require liquid assets totaling 1 year's worth of maintenance and mortgage payments after closing. Also, some buildings require liquidity up to three years of combined costs. Ask your Spire Group Inc. Broker to assist you with specific requirements.
What is the importance of a credit check and how does it fit into the buying process?
A credit check is generally performed by a mortgage broker and pertains to your credit history. Resolve disputed claims and have them removed immediately from your credit report. Keep all pertinent documentation which illustrates that the issue is resolved. Also, we recommend buyers choose a mortgage broker because mortgage brokers can save time and money. We work with various brokers throughout the New York Area; if you are interested ask your Spire Group Inc. broker for more information.
Question: What does being pre-qualified mean?
Prequalified, also called pre-approved, is when a prospective buyer tells a lender income level, debt and credit information, so the lender can provide an estimated loan amount, based on these criteria. Being a prequalified buyer will reassure a seller that any offers made are bona fide and that a buyer can actually make the purchase. In fact, most offers submitted by Spire Group Inc. are often accompanied by a buyer's pre-qualification letter; this letter notify sellers that financing is an option.
Ask your Spire Group Inc. broker to provide you with information about financing, estimated monthly mortgage payments, and any other necessary qualifications. Pre-approval letters make for strong offers because the lender has already pulled a credit report, checked debt/to/income ratio and done an analysis of your finances. Also, it is preferable to be pre-approved so that there will be no surprises when the credit report is received.
Why select a real estate attorney?
The real estate market in New York City is a very dynamic market. Having a real estate attorney who specializes in the NYC market is very important. First, they know the intricacies of the laws and regulations. Second, they can respond quickly to any problems that arise and can therefore expedite the closing. Ask your Spire Group Inc. Broker to assist you in selecting a qualified real estate attorney.
What is a closing?
A closing is where a buyer gives the seller money in exchange for ownership and title to a particular property. This bargained for exchange, or consideration, transfers ownership of the property. The seller also needs to sign different documents including a deed. The place of closing is normally at the bank attorney's office. The parties present will be: seller, bank attorney, brokers, sellers attorney, buyers attorney and title closer.
What are the steps in the application process?
For mortgage applications and for coop or condo boards, buyers need to gather relevant financial documentation. Required documentation includes 2 months of most recent bank statements, brokerage statements and any other assets. In addition to current income verification, boards and banks require a minimum of 2 years of federal income tax returns. Self-employed buyers need to provide at least 3 years of federal tax returns and a letter from an accountant verifying income.
When do I need to move?
Find a target date for moving. If looking to finance, expect to take about 3 months from purchase to close. Buyers, begin your search 4-6 months before prior to an estimate moving date.
Question: Where do I want to live?
New York City is a city of diverse neighborhoods, all with their own unique appeal. Before beginning your search, decide what is important. For example, proximity to public transportation or proximity to your job. Are your preferences for a quiet residential neighborhood or a bustling hub of activity and nightlife? Try to be open to different areas as sometimes neighborhoods other than your first choice are more affordable and offer many of the same features. Visit our detailed neighborhood guide for information on all our neighborhoods. Also, ask your Spire Group Inc. broker to include any recommended, areas as you may not be aware of them and they may best suit your needs.
What is the best way to win over sellers?
If you really want to buy a particular property that has a lot of interest, sell the seller on the fact that you are a qualified buyer. It doesn't matter whether you plan to buy a studio or a building, chances are that there is a limited number of properties available in your price range. In a competitive market attractive properties can be in contract before they appear in the classified ads.
Brokers tend to notify serious buyers first. Make sure that you are ready to buy; have all your paperwork in order including financial documentation and pre-qualification for a mortgage. Communicate yours needs, budget, timetable, and neighborhood preferences.
Make yourself available to view properties. By being flexible with viewing properties during the work week, you can avoid weekends shoppers, congested open houses and a lot of the best buildings tend to show properties between 10-3, M-F.
How do I make the deal happen?
After finding the property you want, immediately make a verbal offer. Consult your Spire Group Inc. broker for the best ways to extend an offer to a seller. There are a lot of different reasons, other than money, that influence a seller in choosing the right buyer. If the verbal offer is accepted, have your broker get confirmation of the offer and acceptance in writing. Once the written offer is accepted and signed, your Spire Group Inc. broker prepares a transaction summary. This is sent to the seller's and to the buyer's attorneys for review. Using the signed offer and acceptance, the seller's attorney then prepares a contract of sale. After the buyer's attorney reviews the contract, negotiates terms and evaluates the property's financial statements, the buyer then signs the contract and presents the down-payment check. Generally, down-payments range from 10% - 20% of the contract of sale. This money is often held in the selling attorney's escrow account to be sent to the seller's attorney. The seller then executes the contract.
Note*: Verbal offers are not legally binding. In fact, in the New York City area an offer is legally binding when both the buyer and the seller sign a contract of sale. Sometimes sellers are tempted by higher offers. To avoid problems, be prepared and have your attorney move quickly through reviewing financials and completing the contract."
