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New York Insider Tips – December 2017

Considering a co-op or condo on the lowest residential floor in a building? The typical “wet over dry” rules prohibiting the movement of kitchens or baths may not apply to you, giving you more renovation flexibility. Do your research ahead of time.

When buying a single-family home “on spec” in Westchester, be mindful of design options added during your construction process – it can create a mortgage approval issue. Over-improving the home with “abnormal for the neighborhood” additions may result in an appraisal issue if your deviations from typical planned unit model result in a home with a higher contracted build price than its comp-based value.

In a tight market, finding homes to bid on can be a challenge. Having an agent who thinks outside the box to find options is crucial. Methods can include owner direct mail overtures, revisiting buildings with the agent’s recent sales where they may have met owners, networking with co-broker lists to find off-market opportunities, reaching out on recently-expired listings, tempting the listing agents of on-market rentals, and more.

With stocks at record levels, potential purchasers of NYC co-ops may be tempted to borrow against their investments to fund a portion of their down payment to keep their money in the equity markets. Be forewarned, though, that boards will consider this as secondary financing when calculating debt-to-income ratios for approval, and may go as far as to prohibit it all together.

An offer on a co-op in New York City is not complete without a financial summary summarizing the potential shareholders’ income, assets, debt and other details. This document, commonly referred to as a REBNY (or Real Estate Board of New York) Financial Statement, should be completed honestly and completely as sellers will hold buyers to their disclosures during the approval phase.