International buyers have always been a part of the NYC residential real estate market. Each year there are waves of buyers from different parts of the world. Foreign investment in the US residential markets – especially in NYC – occurs when certain market and financial conditions align. Foreign buyers invest when the dollar is weak, as it is cheaper for them to buy under such advantageous conditions. Additionally, when they experience economic instability in their own country or other desirable cities like London or Paris , foreign buyers focus on residential property in New York City, because in any case NYC in particular is considered a safe place for real estate investment.
As real estate brokers, we are often asked by sellers if their home is one that may be attractive to a foreign buyer, especially when it is widely advertised with a focus on overseas.
This week’s Ask an Expert column from the popular real estate blog Brick Underground featured information for overseas buyers who wish to buy in NYC, which I recommend that sellers review.
Some sellers do not know that overseas buyers mainly buy condominiums in NYC, since co-ops typically require applicants to have substantial assets in American banks, along with domestic social networks and tax returns for two to three years. Thus, condominiums are usually the investments of choice, and most often, new development condos are favored.
In the Brick Underground article, the question arose as to how a foreign buyer might obtain a mortgage. There are a limited number of banking options available, but generally there are enough options for foreign buyers who are qualified to obtain a mortgage; it just takes a little bit more time due to the complexity of the transaction.
Most US banks have created programs to accommodate international buyers. Foreign buyers can usually finance 50 to 75% of the purchase price, depending the size of the loan. Documentation requirements can be stringent, but some lenders are willing to waive these requirements in return for a slightly higher interest rate, to offset the increased risk associated with loans not fully corroborated. Moreover, most lenders require foreign buyers to show proof of income, assets, and monthly payments and carrying charges for any other real estate owned. US credit is not required, but a few banks require an international credit report.
An overseas buyer must be aware of certain tax implications of owning and selling real property in the United States. To ensure a smooth purchase process of a home or apartment in NYC, one is always advised to check with their accountant and/or financial planner for the most up-to-date rates and procedures, as they are subject to change. It is imperative for a foreign buyer to retain capable advisers on all aspects related to buying—including a knowledgeable real estate broker, a good lending institution, and an experienced real estate attorney.
Fortunately, we have very strong relationships with lenders and mortgage brokers in New York who are happy to work with foreign buyers.
If you are a foreign buyer looking to invest in New York real estate or are interested in more information, please do not hesitate to contact me for a free copy of my New York City Real Estate Buyer’s Guide, by emailing firstname.lastname@example.org or calling 212-937-7011.
All the best–
Negotiating to purchase a home can be an daunting process, especially in New York City – which is one of the most competitive places to live and work. The competition in Manhattan to purchase residential real estate can be fierce! However, if you find yourself in a situation where you have to negotiate against multiple offers to purchase your ideal apartment, remember the four P’s: be Prepared, Plan, be Proactive, and Personable.
Even though it may be tempting to negotiate on your own behalf, most people feel uncomfortable doing so because of lack of expertise and objectivity which may undermine your effectiveness. For this reason, I recommend using an experienced broker who has a good track record in and understands the nuances of negotiation. This usually is a crucial part of the purchasing processes of a home where you can feel satisfied and pleased with your purchase.
- Have your professional members who would be involved in the purchasing process ready including: real estate broker, attorney, and mortgage broker.
- Have your papers in order: a completed REBNY financial statement and mortgage pre-approval letter, should you need a mortgage.
- Know what’s on the market and what has been sold recently – with this knowledge, you’ll be able to establish a well-educated value and its relevance to your intended purchase.
- Learn as much as you can about the seller: their profession, age, cultural orientation, marital status etc. More often than not you can find much of this information online which can greatly enhance your understanding of the negotiating style of the seller and help you negotiate much more effectively to reach a mutually beneficial deal.
- Ascertain the seller’s motivation which gives you a much better sense of how flexible he or she may and how eager they want to sell which would have a direct effect on the ultimate purchase price. A cautionary note, do not assume that anything about the seller’s motivation to sell unless you can verify that, because the wrong assumption may prolong the negotiating process and could end up in failure.
- Planning any negotiating process require special skills and extensive experience. In order to negotiate effectively and arrive at the best possible price you need an experienced broker who would develop a negotiating strategy.
- You should ask your broker to share with you his/der negotiations strategy and show you why and how he or she are taken this or that negotiating strategy. This would include the number of moves, the objective behind each move, and how this process of give-and -take will eventually lead to a meeting of the mind.
- Remember that even under the best of circumstances no broker, however skilled in negotiation, can gage exactly how the negotiations would evolve. That said, a negotiating strategy ought nevertheless be developed to provide you with a better sense about the process and why, for example you might have to pay more than you expect or how and why you might even pay less than anticipated.
- Finally, if you happen to be a skilled negotiator do not dictate to the broker how to proceed with the negotiations a step-by step, particularly because you are not in direct contact with the other broker who is representing the seller. You certainly can make some suggestions but let your broker utilize your ideas as he or she sees fit.
- When buyers are circling around a well-priced and desirable new listing be aware that the first person who makes an offer can have an advantage over others. Waiting is not always the best choice especially if you know the apartment is priced well and is a good deal when considered against other comparable unites.
- While the strongest offers are all cash, most buyers cannot afford this option. The next best option is to make an offer which is not contingent upon financing. This suggest to the seller that you are confident to secure a mortgage which is often treated as if you are an all cash buyer. Needless to say, you should check with your banker prior to making such an offer because you need to be comfortable with the risks involved.
- If you are financing, and would like a financing contingency, a pre-approval letter or commitment letter from a bank will be necessary. You can sweeten the deal for sellers by also putting down a larger down payment and end up financing a lower amount.
- Other terms that can aid in making a deal at the price you agreed to pay are related to:
- CLOSING DATE: If it is possible, make sure to offer to close the sale at the seller’s convenience.
- QUICK CONTRACT SIGNING: Another competitive posture is to agree to sign a contract within a short period of time and to facilitate that you would need a proactive attorney.
- Make a good impression on the seller’s exclusive agent by taking the time for a friendly chat when appropriate to give the broker for the seller a better sense of your sincerity. Seller’s broker often conveys his/her impression of the prospective buyer especially when they feel that the buyer is solid and enjoys a good reputation.
- Some buyers shy away from letting the broker or owner to know how much interest they have in a property believing that it puts them at a disadvantage. In fact, letting the broker about your interest and even enthusiasm about the prospective purchase works to your advantage as well as it demonstrates your level of commitment to buy that particular property.
- In a written offer, be sure to compose a personal letter and attached to your offer. In so doing you convey to the owner how happy you are at the prospect of purchasing his/her home. Given that most owners have deep sentiment and attachment to their home, they would want to sell their property to someone who appreciate the property and ‘loves’ it as much as they do. Writing such a letter is especially important under a competitive bidding scenario.
- If for whatever reason your offer isn’t chosen, let the seller’s broker know that you remain interested and ask that your offer is kept as a backup.
If you want to learn more about Negotiations or becoming an ‘expert buyer’ of Manhattan residential Real Estate, contact me for a meeting or for a free copy of my complete New York City Real Estate Buyer’s Guide by emailing email@example.com or calling 212-937-7011.Read More »
This series features advice on how to build the best team of professionals who will help you with the buying or selling of your Manhattan home. Assemble your Home Team by also reading Part 1: Real Estate Agent, Part 3: Mortgage Specialist and Part 4: Professional Renovator.
Whether it’s buying or selling an apartment, you’ll want a reliable real estate attorney on hand. Your real estate broker focuses on searching for the perfect apartment for you as a buyer or preparing a comprehensive marketing plan for your apartment as a seller, as well as develop a negotiating strategy and the terms of purchase or sale. To that end, you will need an attorney at the ready to begin the contract process or purchase of sale. If you are purchasing a home, the attorney will perform due diligence on the property you wish to purchase and negotiate the contract of the sale sent by the seller’s attorney. If you are selling, your attorney will draw up and negotiate a contract of sale. At the end of the process of buying or selling, it is the real estate attorney that sets up the “closing” of the sale which occurs when you officially purchase or sell your home. So how do you choose a good real estate attorney?
Ask friends to recommend an attorney they have had a good experience with, who managed the process successfully to their satisfaction. Your real estate broker might also know an attorney who is skilled in residential real estate transactions. When you’re ready to call or meet with the attorney candidate, have a list of questions that you want to ask them. Those questions and considerations may include:
- Do you only handle residential transactions or are those just a part of your practice? If residential transactions aren’t their only practice, ask how many residential real estate transactions they have handled.
- What’s their fee structure? Some attorneys charge per transaction while others charge by the hour (which can get costly). Find out if there’s a different fee structure in the case of a deal falling through.
- As a seller, it’s important to know that a contract goes out almost immediately upon a negotiated sale, so look for an attorney who is responsive and acts quickly. Don’t hesitate to ask how fast they can produce a contract once they have a summary of the deal terms. If it is longer than 24 hours (not including weekends), ask why it would take that long.
- If you’re purchasing, you’ll want to be certain that your attorney commits to the due diligence required for the building and negotiate the contract quickly. Often the time it takes to finalize a deal is critical. Therefore you should ensure that they are set up to conclude the process in just a few days.
- Ask them if they would be available for urgent phone calls on evenings and weekends. There are real estate attorneys who give out their cell phones when the deal is time-sensitive or when there is a concern about a new and urgent matter. In an active market, issues pop up more often than you might think!
- You should feel secure that they know and are familiar with the customary real estate practices from beginning to end. If you’re dealing with co-ops, you’ll want to know that they’re familiar with the practices of co-op boards and the entire application process.
Some of top qualities you’ll want in a real estate attorney are:
1) Solid experience with residential transactions
2) Someone who can review or send out the necessary documents quickly – even on short notice – which is important for many buyers/sellers
3) Someone you like well enough on the phone or in person, who communicates and responds clearly and with whom you feel comfortable working. After all, the process from contract signing to closing could take 3-4 months or longer so it is helpful that you trust and have the the attorney you chose!
For more advice on finding a real estate attorney or other real estate questions, please contact me at firstname.lastname@example.org or call 212-937-7011.
All the Best—
Once you have researched the market, viewed many apartment & home choices, and assessed what is important to you, there comes a time when you are ready to place an offer on your favorite home. Here are four steps in preparation for the process of making your initial offer.
I. Determine the Value and How Much You Will Offer
Research and review with your real estate agent:
–Similar sales activity with both current listings and recent & past sales in the neighboring area and within the building
–The property’s pros & cons and how that might affect its value.
II. Establish the Terms of Your Offer
Important components of an offer include:
–Terms of a sale include closing date, any inclusions (i.e. window treatments or light fixtures) or special terms (i.e. seller pays the flip tax), all cash sale or the amount of financing, and whether the sale is contingent on obtaining a mortgage. An offer that is either all cash or not contingent on financing is a considerably stronger offer and can sometimes aid in achieving a lower sale price.
–If you are financing, discuss the financing contingency with your broker and lender to find out whether waiving it is possible without taking undue e risk. In a seller’s market, a higher percentage of buyers often waive the mortgage/financing contingency when they feel certain that they will attain a mortgage.
III. Submit a Written Offer
It is a good idea for you to send your offer in writing to your broker to avoid any misunderstanding. It can be simple. Your broker will then submit the offer preferably verbally at first to gage an initial reaction from the broker or the seller and follow it with a written offer that would include the following:
Special terms, including basic employment information including recent employment history, job title & income, and overview of your finances.
Along with the offer letter, your broker includes your REBNY or other personal financial statement, mortgage pre-approval letter if you are financing and, if the offer is on a co-op where board approval is required, personal information about the buyer which is relevant to the purchase.
There may be times when you will be asked to submit the first two pages of your last two years federal income tax return and/or more detailed personal and professional information. In some cases, a direct personalized introductory letter from you as the buyer can be a distinguishing factor especially at the start of a negotiation. If carefully written, is often well received and aids in the negotiating process.
IV. Negotiations Begin
Once you or your broker place an offer, there is an inevitable back and forth that takes place. Every negotiation is different depending on circumstances, motivation and market conditions. In most cases a reasonable offer will elicit a counter-offer from the seller. It is common that offers and counter-offers take a place a few times until a price and terms of the deal are mutually agreed upon. A skilled broker will guide you during the negotiating process and work to secure for you the best terms especially the price.
With these four steps, you now have the basic information of what you need to make an offer on your next New York City home.
To learn more about the insider secrets and nuances of making an offer, contact me for a meeting or for a free copy of my complete New York City Real Estate Buyer’s Guide by emailing email@example.com or calling 212-937-7011.Read More »
While it’s very important to work with a skilled and knowledgeable real estate agent, there are many features that buyers should consider when searching for a new home. Being knowledgeable about each aspect can aid a buyer in assessing the value of an apartment.
Amenities: As focus has shifted to buildings that have a wide array of services and amenities, ranging from simple laundry rooms or bike storage, to pet spas and high-tech gyms, units in these buildings command higher prices.
Bedroom/room count: An apartment that has a gracious layout will have more value than one with an awkward layout. Additionally, a bedroom count that is in line with the square footage can be a major selling point for many people.
City, River, or Park views: Do you want to look out your window to see a park, a river, or city skyline? Views like these may bring in more sunlight, but also higher prices.
Design: Quality renovations that are recent and tasteful boost the sales price in almost any apartment. An apartment with a grand and gracious layout with good window placement almost always achieves a higher sales price. If an apartment is decorated to appeal to buyers, the sales price will almost always be higher.
Esteemed building: An apartment in a building that has a wonderful reputation and great financials will almost always sell for a higher price than an average building.
Fees (monthly): When monthly maintenance, common charges or real estate taxes are significantly higher than average, value is affected. The asking price must reflect the high monthly charges. On the other hand, if the monthly charges are below average this translates to a slightly higher price.
Gold Coast vs. Ghost Town: Do you want to live in a prime location like Fifth Avenue, Park Avenue, Central Park West, West Village or TriBeCa’s Gold Coast? Keep in mind that they are highly sought after with the matching high prices. If you’re aiming for a lower price, you can expect second or third tier locations to be further from public transportation, closer to commercial or industrial areas, or overlook areas with current heavy traffic or future construction sites.
Homeowner History: Because most buyers now consider condominiums more desirable due to ease of purchase and re-sale, as well as for the ability to rent with few restrictions, condos trade at higher prices than co-ops often by as much as 10 to 15%.
While the above considerations will get you started, if you want to learn more about becoming an expert buyer of Manhattan Real Estate, contact me for a meeting or for a free copy of my complete New York City Real Estate Buyer’s Guide by emailing firstname.lastname@example.org or calling 212-937-7011.Read More »