Blog Posts

When reviewing a condo offering plan (a huge document that, when accompanied by its amendments, explains basically everything about a building), one of the first sections your attorney will visit is the "Special Risks" section. The good and bad thing about this section is that the developer must disclose every single possible thing that could go wrong in order to make the Attorney General's office (A.G.) happy.

A few things to look for:
1. Chances are only the first $100K of your deposit on the contract for the apartment is FDIC insured.

2. Sponsor retains voting control of the condo board, often until 75%-95% of the building is sold. Sometimes they can waive control of the board prior to that time. After a certain % of the building is sold and the condo board is formed, the sponsor may be able to have more than one vote on the board or appoint more than one representative.

3. As long as the sponsor still owns (for example) 25% of the building (or up to 5 years after the first closing), the board may not be able to make any material changes to the common areas, change employees, enter into contracts for work/services, borrow money on behalf of the condo, or exercise a right of first refusal UNLESS these changes are required by law or the condo's insurer or are approved by the sponsor.

4. Most buildings don't establish a reserve fund for the building (most or all of the building's systems should, in theory, be new) but they do require approx two months common charges to be put into a reserve fund by each buyer at closing.

5. Some buildings require the condo board to buy the super's unit and the costs are rolled into the first year's budget. Others require the buyer to pay for the unit out of pocket, which could be $10K - $25K in extra closing costs! Some buildings rent the super's unit to the condo and at a later date, sell it to the board.

6. Purchasers should be aware that the amenities and the full building staff (doormen, porters, etc) may not be in place in the building after closings begin, sometimes for a year after closings start. The hours and dates for move in may be restricted because of construction.

7. Construction may be noisy and messy while work in the building is being finished.

8. Real estate taxes are estimates (frequently estimated by the sponsor's tax attorney) and may change (New York City can come up with their own numbers).

9. Pay attention to what can go into the commercial space in the building. Sometimes the commercial space may be banks, bars, parking garages, theatres, spas or commercial office space. Usually there is a promise that nothing "obscene or pornographic" such as an "Adult Physical Culture Establishment" (I'm translating this to mean "strip club"?) will be in the common space. Sometimes they also promise that no abortion clinics or family planning establishments or dry cleaners will be in the commercial space. One Gramercy area building neglected to tell buyers that a McDonalds would be going into the commercial space.

10. Sponsors usually reserve the right to rent out unsold apartments and may be able to rent them out as short term furnished rentals.

11. Buyers frequently can not "flip" their units until at least one year after the first closing.

12. Window treatments may need to be white on the window side of the building to promote architectural unity.

13. Check for "lot line" windows and whether you would be required to pay to brick them up should another building go up next door.

14. Check to see how much over budget the sponsor is allowed to go (sometimes by 25%) when it comes to common charges; Always plan for the worst.

15. Check to see how late the sponsor can be on delivering the building (sometimes a year after the closings are projected to begin) before you can pull out of the deal. Toes says: Make sure your landlord is flexible on lease extensions!

Other items to keep an eye on:
Check whether labor mentioned in the budget is union or non-union. If the budget calls for union labor, assume that the common charges will be a bit higher.

What building systems / mechanicals have been updated? No matter whether it is a ground up building or a conversion, find out what warranties are in place on the roof, boilers, elevators, etc. (Note: The appliances in your apartment should be under warranty.)

Frequently, any major repairs needed on terraces that are not the fault of that unit owner are divvied up between ALL unit owners.

You may be charged a fee (example, $150) to clean the interior and exterior of your windows twice a year.

Sometimes after the first few years of being members of a building's "Club" or "Spa" for free, the unit owners will be responsible for paying fees through increased common charges.

Doublecheck how the square footage of the apartment is measured (i.e. are the common elements of the building included in the square footage?)

Toes says: I can't underscore enough how important it is to hire a NYC real estate attorney. You want to hire someone who has seen hundreds (if not thousands) of NYC condo offering plans and knows what to look for. And you want an attorney who knows how to amend the contract / structure the deal so you are protected against whatever issues arise.

[ CLOSE ]

About 15 months ago, a buyer (and friend) of mine put down a deposit for an 787 sq ft one bedroom, 1.5 bath apartment at The Link, an El-Ad Properties development (El-Ad is also the developer for the Plaza).

A week before the closing, we went in for the walk-through to find that the sinks were misaligned, the painting wasn't finished, two outlets weren't working, and there was a plethora of other small problems. When we walked into the bathroom, we noticed that there was no shower door or shower rod. We were told, "This line doesn't have them."

The sales office bathroom had a shower door! The website shows a shower with a shower door! The offering plan doesn't say anything about the "A" line NOT having a shower door. There ensued a week-long battle between both sides' attorneys about who was responsible for paying for the shower door. In the end, my client had to pay to have a shower door installed because the developer refused to pay for it.

As I visit more and more new developments, my eye has become trained to look for the tiniest details. Many new development bathrooms no longer include towel bars, toilet paper holders, or shower doors! More and more frequently, I am finding that developers are cutting these out of their apartments, most likely to cut construction costs and keep their price per square foot lower.

How ridiculous is it for someone to pay $1,150/sq ft (15 months ago!) for a "new luxury condo" and not have a shower door or even a shower rod!? Here are some tidbits I have noticed with clients buying new developments.

At 184 Thompson, a condo that is being converted from a rental building, if a closet door wasn't in good shape, they simply removed the door and left the closet sans door for the buyer to deal with. But the apartments are only about $1,050 a sq ft for a condo in the Village, so you get what you pay for.

At 88 Greenwich, toilet paper holders and towel bars are not included, but the developer did include wonderful amenities like an iPod docking station, step stool integrated into the kitchen, and trash bin.

Meanwhile, a client of mine moved into the Orion and his dishwasher didn't work and it took the building TWO months to repair it.

A colleague of mine has a client who just closed at the Atelier, a Moinian Group property. When they went to the walk through, the apartment was dusty, the paint wasn't completed, and there were a number of other problems with the apartment.

I sold an apartment at 120 Greenwich and the apartment was done to PERFECTION when my client moved in. However, it was a model apartment, so of course it was perfect.

On the positive side, I was thrilled to go to Maison East and Rutherford Place today and see that they do actually have toilet paper holders and towel bars. Maison East actually includes the washer/dryers - not just a washer/dryer hook up.

So what is a buyer to do?

TOES SAYS:

1. When buying in a new development, your attorney will read the offering plan, but to be on the safe side - you should read it also!

2. If the sales office says the building will be ready in the early spring, assume they mean the late summer. I have yet to see a building be ready earlier than what buyers/brokers are told.

3. If you get to your walk-through and find that the apartment still has work that needs to be done, schedule a second walk-through to make sure everything on the "punch list" has been completed. Postpone your closing date until everything on the punch list is complete if you have the luxury of doing so. Hopefully by delaying the closing you will expedite the process of getting things done.

4. Consider buying one of the apartments that was used as a model.

5. Assume that the hallways, lobby, fitness center, roof deck, and any other amenities will be completed at least 6 months later than when the building says they will be completed.

6. When buying off of a floor plan for a building that is not even in the ground yet, assume that the common charges being quoted to you are lower than what they will end up being when you move in. It is in the developer's interest to low ball the projected budget for the building to make the common charges look attractive to potential buyers.

In general, I love new developments and after the "dust settles," so do my clients. Young Wall Streeters in particular don't want to deal with the hassles of a co-op and they don't want to gut renovate an existing apartment. They want a gorgeous, never-lived in product. When you move into an apartment that has been lived in, there will always be something that needs to be renovated or fixed. Since the elevators, lobby, and other amenities are brand spanking new in a new development, you wont have to worry about assessments or common charge increases for any major capital improvements any time soon; unless of course there was shoddy work done that demands a redo.

By going into a new development purchase with reasonable expectations and a checklist of things to keep an eye on, you will have a much better experience! Best of luck in your search!

[ CLOSE ]

A while ago, I wrote about the 2 family townhouse I bought in Bedford-Stuyvesant, Brooklyn; after searching & searching. Although I wasn't sure whether I was going to move there or not, after contemplating my commute & the fact that I don't need the space right now, I decided to stay in the city in my alcove studio.

I had a contractor renovate my kitchen and bath in my current co-op, so I thought that since I had been through a renovation before, I sort of knew what I was doing...Not so much!

So what have I learned about renovating a three-story, two-family townhouse so far?

1.I Firmly Believe That You Get What You Pay For: I interviewed three contractors and only one gave me a detailed, professional estimate. It also happened to be the contractor who my neighbor in Bed Stuy (who is also a real estate agent) highly recommended. Generally, we ("we" being "real estate agents") are told not to recommend contractors because no one loves their contractor and it will come back to bite us in the arse ("Oh, my broker recommended him and he was TERRIBLE"). However, I am willing to go out on a limb here because my contractor, Mike Zych of Mike Zych Construction, was fabulous. He finished on time, and he would have been on budget had I not decided mid-project that I wanted to do a few extra things in the house. Although the other two contractors came in slightly lower than Mike, there is nothing like having a very detailed estimate so there is no confusion about exactly what you are getting for your money. I am sure that if I had gone with the lower estimates, that the costs would have ballooned to more than what I paid for Mike's team to do the work. And despite the hundred annoying questions I probably asked him, he and his assistant, Renata, kept me sane during the process.

2. Ikea Cabinets Actually Look Nice: Considering I knew that for part of the time I would own the house, either all or part of it would be occupied by renters, I didn't want to spend a mint on cabinets. I was pleasantly surprised that the Ikea cabinets look great. How long they will last is another story. I'll get back to you in a few years. Bottom line: About $3K for two Ikea kitchens. Here is the kitchen BEFORE & AFTER:

Oh, and I took out the dropped ceiling to make it loftier and more open. Here is the BEFORE & AFTER, look at the glass at the top of the door to see the end result:

3. Countertops Take Forever: If you are a renovation rookie like me, you bring in a floorplan and sit down with the guy at Home Depot. He draws a sketch of your kitchen & you pick out what countertops you want. You think you're done? Hardly. It turned out that the smaller of the two kitchens didn't have enough counterspace to even justify its own order. So I had to order the same countertops for both kitchens (which thankfully looks ok). All of the cabinets AND appliances need to already be installed before the countertop people can go to measure the kitchen and make sure the floorplan you gave them was correct, and they need to make sure they cut the countertop to fit the sink and faucets correctly. THEN, they order the damn things, which takes another 10 days. Then they have to come install the countertops. God forbid you also get the 4 inch backsplash (a good idea so water or anything tenants might spill doesn't drip down behind the cabinets & start rotting stuff) and then they have to come back AGAIN to install that. Toes' Tip: Get those cabinets & appliances in early so you can get started on the lengthy countertop process. It takes WEEKS. Bottom Line: Silestone will survive virtually any tenant but you will pay out the wazoo for it. Budget $3K for two kitchens.

4. The Small Things Add Up!: When estimating the costs of doing a renovation, don't forget the small stuff you are going to have to purchase. Like doorknobs. And light fixtures. And did you know that almost no one makes a 24 inch over the range microwave, and the only one out there is like $350 bucks!? I must admit that I didn't realize how much these things would add to my bottom line. I priced out the countertops, cabinets, and appliances before beginning this process, but not the smaller items.

Doorknobs: My dad poked fun at me for ordering $60 doorknobs since there are renters in the house. Yes, he is right - maybe I shouldn't have spent the money. But crystal/glass doorknobs keep with the period of the house (it was built in 1899) & they look beautiful. Unfortunately, they are also expensive. But I didn't want to buy $20 doorknobs only to turn around in 3 years when I want to move in and then spend another $60 on doorknobs. I'm pretty sure doorknobs last a long time. I searched about 7 websites for the cheapest crystal knobs out there. After they were installed (and look fabulous), my mom told me a story about people who stole the doorknobs out of her friend's house because they were being evicted and they were mad that they had to move. THANKS, MOM! Luckily, I know some of my tenants personally & I have a great renter's insurance policy, so I think I will be ok. If not, lesson learned! Bottom line: in a 3 story house, I had 22 doors. That's $1,320 for doorknobs.

Light fixtures: I wanted to keep with the style of the house & there are gorgeous ceiling medallions throughout the house. Since I plan to move in at some point, I wanted to spend the money on a few nice light fixtures in the highly visible areas and try to buy less expensive ones for the hallways and rooms where the fixtures wouldn't be as noticeable. Despite my strategy, nice light fixtures are about $120 each. There are 20 lights in the house! I spent about $120 on 6 of the fixtures, $80 on 6 of them, and $30 - $50 on each of the rest. That's $1,600 on light fixtures. Ouch.

5. Most Dryers Do Not Run On 110: After I purchased the washer/dryer for the basement, my contractor's electrician informed me that the dryer I bought only runs on 220. When I called PC Richards & Home Depot to discuss dryers that run on 110 (it actually doesn't say on their websites, even in the detailed information about each dryer), I found out that there are few 110 dryers available and they are not very effective. Basically, you can dry, like 2 pairs of jeans at the same time. This is the only thing I was a bit perturbed with my contractor about. It would have been nice to get a head's up about this. The issue hasn't been resolved yet. Evidently it can be a nuisance to deal with Con Edison to have them run 220 into the house (even though the electric in my house was upgraded during the renovation). So I may need to return the electric dryer and order a gas dryer, in which case my contractor will need to vent the dryer to the outside. Either way, I forsee this costing me more money, which is annoying. But considering that this was a big renovation job (2 gutted kitchens, a gutted bath, two walls/doors being moved, new windows, new electric, 2 upgraded baths, dropped ceilings being removed, etc.etc), I think it was a pretty minor mishap.

After my tenants get all settled in & I see what the heat and hot water really cost, I will give an update on how my investment is turning out!

[ CLOSE ]

We used to tell buyers and sellers that "it takes 10 days to 2 weeks to close" after co-op / condo approval or after a 30 day notice in a new condo had been issued.

After my last four sales took what seemed like forever to close, I took a survey of The Corcoran Group agents to try to figure out if it was the banks I was recommending, if I needed to take a closer look at the mortgage bankers I work with, or if it was an industry-wide problem.

The consensus from my colleagues is that it now takes 3 weeks to close. "Its like pulling teeth" and "I'm tearing my hair out" were common statements about clearing deals to close.

Bank of America and Wells Fargo received the most votes for being "the worst." The problem is that they often give the best rates, so a lot of us recommend them all of the time and therefore the results are definitely skewed. One of the mortgage bankers I work with left Wells Fargo because they had laid off so many people that it was frustrating to get deals done. But he went to Bank of America which seems to be just as slow.

One comment was that "Chase was bad for a while but they're catching up. Citibank is fine. HSBC too." But another agent said Chase was slow also. Chase/Citibank's rates seem to be higher than Wells and B of A, so I don't usually refer them, but if they're faster getting deals to close, I might have to start!

One great comment came from my colleague, Gene Keyser:

"Delays are because of multiple iterative approval and re-approval processes stemming from a new rule where any loan that a bank floats into the secondary market must be bought back by the issuing bank in the event of a foreclosure. They have a lot of skin in the game now." (And hense are being a lot more cautious).

Doug Heddings over at TrueGotham.com also recently blogged about the longer timeline to close in today's market:

"...it is imperative to mention that banks are also slowing the process considerably these days with tighter lending standards.

So realistically, one should expect a closing of a Manhattan co-op to take approximately 2-4 months from the time a contract is sent out. Having said that, things like holidays, vacations of Board members and other pressing business that a Board may have to address are all factors that can lead to further delays."

In the last year, I have seen banks asking for more and more information and underwriter after underwriter is reviewing and re-reviewing the mortgage file. A new HVCC change also isn't helping as regulators try to separate the appraisal process from the lending institution - now you are seeing out of towners commuting to Manhattan from all over to conduct appraisals. For a more detailed explanation on this, I refer to Andrew Goodman, owner of Gotham Valuation:

The HVCC is a new code adopted by Fannie Mae, that has been in full effect as of May 1st, 2009. The objective of the HVCC is to change the way which appraisers are engaged by lenders originating most loans. Whereas appraisers were previously engaged by loan originators (mortgage brokers), the HVCC mandates that appraisers now be hired by third party appraisal management companies which have no vested interest in the outcome of the appraisal.

The effect of this legislation has not all been positive. In many instances appraisal management companies are engaging appraisers who lack required Manhattan specific market knowledge. In these instances it is not uncommon for properties to be either under or overvalued.

Banks have also lost co-op stock certificates or UCC forms and instead of taking 2 weeks, it is taking up to a month to find them. In the last few months, clearing to close seems to be taking longer and longer.

Now that I know that 3 weeks is the new 10 days, I can prepare my buyers and sellers accordingly! When they've identified the property and are shopping around for the best rate, I can send them a list of representatives from the four most frequently used NYC lenders, plus one mortgage broker who can shop smaller banks for them. Buyers may have to choose between a speedier transaction and lower rates.

One word of caution here is that you don't want too many banks to run your credit report because it will lower your credit score! Usually we recommend that people go to a max of three lenders within a short time span, which generally will not lower your FICO score.

Since I know that this isn't just a problem that I am facing with my own deals, I can stop tearing my hair out. What I am hearing from mortgage bankers is that in the next six months, depending on transaction and refinancing volume, banks should start ramping up the number of employees they have, which should help transactions move more quickly. Additionally, if the pendulum starts swinging back the other way to make getting financing easier, the process should be less frustrating for everyone involved.

Keeping my fingers crossed (but not holding my breath!)

Tips for getting your closings done as quickly as possible:

Toes says: if you paid cash for your apartment or paid off the mortgage on your co-op, put your stock certificate and proprietary lease in a safe place! Make sure your attorney knows where these documents are. If you lose them, it can slow down the transaction.

Toes says: if you are selling your apartment and you have a mortgage on the property, make sure your attorney contacts your bank as soon as possible to locate the stock certificate/proprietary lease. Some banks will "search" for these items for four weeks before they will declare these documents "lost" and issue new ones.

Toes says: If you purchased an apartment in one name, and you are now using a different name, ie, your married name, you must notify your attorney! Title / lien searches may need to be done in BOTH names. It is frustrating when everyone thinks you are cleared to close and it turns out that the title or lien search was done in a different name than what is on the stock certificate / proprietary lease or deed. New title / lien searches will have to be ordered, delaying the closing.

Toes says: Keep your condo/co-op offering plan, HUD settlement statement, stock certificate / proprietary lease / deed (depending whether it is a co-op or condo) in a safe place. Also keep any amendments to the offering plan as well as the past two years of building financial statements that are given to you in that same "safe place." If you lose your offering plan, it can be around $150 to replace. If you lose your copies of the building's financial statements, a management company will charge between $25 and $200 (!) for each year of financials that you need. When selling your apartment, the buyer's attorney will need at least two years of financial statements as well as the offering plan and any amendments.

Although closings are taking longer these days than they used to, being organized can make a big difference in the time it takes to close.

(PS - Special thanks to my attorney, George Kontogiannis, for assisting with this post!)

[ CLOSE ]

I seem to be living in co-op HELL these days. See my post on the nightmare of the proprietary lease renewal here.

My latest adventure was working with a customer who was going through a divorce. I didn't think it was a big deal that he didn't list alimony or child support payments on his financial statement because none had been determined yet. Word to the wise: Going through a divorce? Don't buy a co-op.

Co-ops are generally looking for:

- 20 - 25% down payment (sometimes more, rarely less)
- 18 months at a minimum and most likely 2 years of mortgage and maintenance payments left over in reserve in liquid assets (401Ks and IRAs do not count!) after the down payment (Sutton Place and Park/5th Ave buildings frequently look for much higher reserves - this at least gives you a ballpark requirement for most co-op buildings)
- A 25 - 28% debt to income ratio (if your payments are $3,000/month, you need to gross about $12,000/month)

So if you are going through a divorce where you may be required to pay alimony or child support in the future, a board is going to be very concerned about your future debt to income ratio, even if your current numbers are great.

In this case, my customer had 2 years of payments in reserve, he was putting more than 20% down on the apartment, he had a great job history, a credit score of 770 and had a 26% debt to income ratio.

After submitting the board package, the board's managing agent asked for my customers divorce settlement paperwork. I explained that the divorce wasn't final and no paperwork had been drawn up yet. We ended up having to get a letter from the wife stating that her husband wasn't going to have to pay alimony or child support. I felt terrible for my customer and can not imagine how awkward it must have been for him to ask his wife to do this for him.

But even the letter from the wife wasn't enough for this building. The board then asked my buyer to put a year's worth of maintenance payments ($11,000) into an escrow account for an indefinite period of time. Although the broker rumor mill is that other people in the building have asked for and received their escrow $ back after one year, there is really no absolute guarantee that the building will give it back until my buyer sells his apartment. Different buildings work their escrow agreements differently.

Toes says:

If you are going through a divorce, buy a condo!

If you can't buy a condo, be prepared to furnish any paperwork that has been drawn up, or be prepared to have an attorney or your soon to be ex draft a letter to the board about estimated (or better yet, maximum) alimony or child support payments.

If you are going through a divorce be prepared to offer a year or two of maintenance to be kept in an escrow account to make a co-op board feel comfortable with your future debt to income ratio and reserves.

If you buy a co-op when you are going through a divorce, you'd better be be overly qualified to buy the apartment! Don't submit joint bank statements because naturally the board will assume that only half of the funds in that account will end up being yours. As my mother always said, "a woman should always have her OWN MONEY!"

When buying a co-op, plan to bear your heart and soul to the co-op board. Nothing is sacred! NOTHING.

[ CLOSE ]

I am representing a seller in a building with a difficult managing agent or a difficult co-op board (it is hard to say which & it could be a combination of the two. Perhaps they aren't being difficult, it might be that they just don't care?). The buyer was approved by the board to purchase the apartment on Thursday, December 20th. Normally, we'd schedule a closing date and be done in about two weeks, perhaps a little bit more due to the holiday season. So we should have closed before January 4th.

The co-ops proprietary lease expires in about 30 years, and her lender (Wells Fargo) will not give her a 30 year loan until the Managing Agent (MA) sends them a letter saying that the board intends to renew the proprietary lease. It is my understanding that every lender is going to require that a co-op's proprietary lease be valid for more than 30 years or they are not going to issue a 30 year mortgage. So this isn't a problem with Wells, it is something any lender would require.

Of course the board is going to renew the proprietary lease! This should be a routine procedure. But the MA says we must wait for the next board meeting in order to address this issue, citing that she doesn't have the authority to write the letter.

Originally the meeting was supposed to be the first week in January, so we figured this issue would just set us back 2 weeks. Then the board cancelled their January meeting and decided to wait until February 6th to meet!

Despite repeated calls to the Managing Agent by the seller, and both the buyer's and seller's attorneys the M.A. says her hands are tied and we have to sit tight until February. The seller also called his neighbor who is on the building's Board of Directors, but hasn't received a response. Meanwhile, the seller is paying for a vacant apartment and the buyer's mortgage rate lock has probably expired. Luckily for her rates have probably gone down since she locked in a rate, but she may face penalties or incur additional fees for extending her rate. And she'd obviously like to move into her apartment!

I am tempted to write a letter to the entire building letting them know what is going on. I don't know if the Board of Directors (except the seller's neighbor) is even aware that this is happening. And I suspect shareholders in the building would not be happy to learn that the MA / Board are unnecessarily holding up a sale for SIX WEEKS!

My seller's attorney (who has done thousands of co-op transactions in Manhattan) tells me that this is preposterous and that he has never seen it happen before.

Toes says:
1. If you are on your building's Board of Directors, find out when your proprietary lease expires and make sure that the Board votes to renew it when it gets down to 30 years prior to its expiration.

2. If you are on your building's Board of Directors, give your Managing Agent a directive to contact you if a problem is holding up a sale in the building.

3. If you are selling your property, talk to your managing agent and ensure that the proprietary lease is not expiring close to 30 years from when you anticipate a closing.

[ CLOSE ]

About 15% of Manhattan co-ops don't allow pets. I think by now everyone knows that if you have one dog, two dogs, or (god forbid) three dogs, your chances of finding a Manhattan apartment decreases dramatically. Finding a co-op building that will accept your dog is charted below in order of difficulty:

1. Dobermans, Rottweilers, Pit Bulls, or any other "aggressive breed" dogs - you're pretty much screwed. Maybe 10% of Manhattan co-ops will take you. Tip: Focus on new condo buildings that haven't already established their pet rules yet. Try to get grandfathered in somewhere! If your budget/tastes are more "co-op" in nature, take your dog(s) to the best trainers in Manhattan and make sure they have a very nicely written reference letter from obedience school.

2. More than one "large" dog. Generally this is defined by "over 40 pounds." Tip: look at condos or try to buy when your dog is a puppy. The vast majority of co-op applications ask for the breed and weight of your dog. Hope that no one notices that you listed in the co-op application that it was a 40 lb golden retriever, in which case the board is likely to suspect that your dog is going to one day exceed 40 lbs. I would wager that about 40% of co-ops will not take two or more dogs over 40 lbs. (Some buildings will take one dog over 40 lbs but not two).

3. More than two pets. Some buildings restrict owners to having only one or two pets per apartment. This is one of those situations where having a real estate broker who will call every single listing agent for you to confirm that having more than two pets is ok will save you a LOT of time.

4. Some co-ops don't provide a weight restriction but you have to be able to carry your dogs through the lobby. There are other buildings that only take dogs under 25-35 lbs. Some buildings don't take dogs at all. Some buildings will make you take the service elevator with your dog. Some buildings will want to interview your dog. More on that to follow.

Tip: Do not trust statements like "pet friendly!" in listing descriptions. Sometimes "pet friendly" means the building allows CATS (birds, etc), allows ONE pet, allows SMALL dogs, etc. Your real estate agent will likely need to confirm with every listing that your situation is ok.

The next step once you find an apartment that you love in a building that will take your dog(s) is to find out if the building interviews pets. This is becoming more and more common. All it takes is one yappy dog that won't stop barking when the owner leaves, a dog that "goes" in the hallways, elevator, lobby, Rhodedenrum just outside of the building, or dogs that growl at other dogs, people, or kids, and the board has to start interviewing everyone's dogs.

Interviews, really?
What happens at a doggie interview? I asked other brokers and buyers to share their stories and here is what I found... Someone on the board may bring their own dog to the interview to see how your dog interacts with their dog. A board member may go in and out of the apartment door to see if your dog barks when someone gets off of the elevator or passes by the apartment. They may speak in a really loud tone and clap their hands to see how your dog reacts. One board-member swears that a buyer must have sedated their dog for an interview! The dog was really sweet and quiet at the interview but was a non-stop barker from day one.

What if I'm buying a pied a terre? Do I really have to fly my dogs up for an interview?
Sometimes, yes. It depends on the board. If they waive the interview for you, are they going to have to make exceptions for everyone else? Sometimes these issues are more about whether you are going to be a team player and respect the board's rules. However, if the dogs really aren't going to be there for more than a few weeks a year and they meet the board requirements, some brokers say to not mention them. You can always say you've inherited them or adopted them at a later date. As long as dogs are allowed, your dogs are "regulation" size and breed, and they're well-trained, chances are that no one will care. It's usually only when someone's pets are a problem that it matters.

Getting Your Pooches Approved:
It never hurts to put a reference letter for your dog into the co-op package. Include reference letters from a trainer, dog walker, boarder or neighbor regarding how well behaved Rover is (doesn't bark, is potty trained, loves kids, plays well with others, etc). Have your dog groomed, make sure he or she is well rested, has been fed, and has gone to the potty before the interview and you'll be just fine!

Out of Town Buyers & Getting Dogs to the Interview:
Dogs under 20 lbs can usually go on an airplane with their owners. Over that, they have to fly as cargo and dog lovers really don't trust their dogs to the airlines. If they can't always get your luggage where it needs to go safely... Are your dogs going to be safe? If there are dog owners on the co-op board, they should hopefully understand that you don't want to drive your dogs from California or wherever just for a co-op interview. Add a cover letter to the package explaining the situation. Or video tape the dogs interacting with kids and other dogs and include a dvd in the board package. IF the board has no sympathetic dog owners, you might have to get the dogs there for the interview. Perhaps try a service like http://petairways.com/

Best of luck, happy hunting, and woof, woof!

[ CLOSE ]

I bought my Village studio with help from my grandfather in 2003. After living there for 2.5 years, I've been subletting it out for 1.5 years and making positive cash flow. I would have kept it forever but the building only allows subletting for 2 years out of every 5 years in one year lease periods. When it was time to sell, I didn't want to annoy my tenant with constant showings. She was planning to move out May 1, so I put my apartment on the market April 1 with the plan to sell it quickly so that it wouldn't sit vacant for too long. Here is some insight on how a broker sells her own home. I hope you find it helpful!

1. Looked at comps in my building. The last studio in my line went for $365K, but it was a sponsor unit and didn't require board approval, which commands a higher price. Still, the market is a little hotter now than it was in the winter, and I'm on a higher floor, so I determined that my apartment was worth $369K. The highest price ever received for a studio in my building is $380K. That apartment was completely gut renovated with a new wall mounted plasma TV and surround sound and it had a much nicer view than my own, so I knew I wasn't getting $380K.

2. Price the apartment $10K lower than it is worth, $359K, to get lots of people in the door, multiple offers, and a price above the asking price. TIP: If you want to sell your apartment quickly, price it 2 - 3% below market value and you will generate so much interest that you end up getting what you wanted in less time, or you will get more than you were hoping for. Every time an owner has allowed me to price an apartment below the market price, this has happened. When New Yorkers see that a dozen other people are interested in an apartment, they get competitive and they want the apartment more. Once someone has offered $359K for an apartment, it isn't much of a stretch for them to offer a few thousand dollars more to out bid someone else. If you have a 30 year fixed mortgage, it is only $30 a month to finance an extra $10K.

3. I believe in "the system." A property gets the most exposure when it is on the market at a 6% commission. Even though I'm a broker and I could try to market my apartment without my company in order to "save" money, I know that the way to get top price for a property is to use a brokerage firm. 85% of apartment sales are co-brokered deals, not broker direct to buyer or owner direct to buyer. To bring in the most *qualified* buyers in the shortest period of time, I fill out an exclusive agreement with my company, Citi Habitats. It is worth paying the extra money - you get what you pay for.

4. Luckily, my tenant attends Parsons School of Design and the apartment looks better than when I lived there. The paint colors and furniture are fantastic and appeal perfectly to someone looking for a Village studio. No need to paint or stage the apartment, SWEET! (If the apartment needed a coat of paint, or if her furniture was horrible, I would have waited for her to move out and then I would have staged the apartment in order to get top dollar).

5. Line up cleaning service, virtual tour and professional photos (which my company pays for when we have an exclusive listing) for the week before the apartment will go on the market. That way the listing is perfect when it hits the market - great description, quality photos, and a virtual tour. Allows me time to prepare a postcard mailing to the building announcing the listing (Citi Habitats also pays for this).

6. Call the mangement company to confirm the building open house policy. Building doesn't allow them. Damn. It is so much harder to sell an apartment when you have to show by appointment. I can only show 8 people an apartment in 15 minute intervals on a Sunday between 12 and 2pm by appointment, whereas I always get 20 - 35 people at my first open house for a new listing. Some people only search open houses, or they sit down with the NY Times in the morning and circle all of the open houses. Apartments not having an open house can easily be forgotten, simply because of the inconvenience of having to make an appointment when a buyer can just drop in to 10 other apartments. Confirmed the maintenance, assessments, sublet policy, financials, planned capital improvements, etc, with the managing agent.

7. Spent two hours making sure every detail about the apartment and building were accurate in our database, which we share with our sister company, The Corcoran Group. Wrote and re-wrote the description for the apartment so it would be perfect the first time. Otherwise, we have to change it in the database and show sheets and send a separate email to our sales department to get it fixed on our website. Better to get it right the first time.

8. Got the photos within three days of the shoot, upload them to the website, database, and postcard mailing and send them to our marketing department so they can create show sheets. It takes them a few days to prepare the sheets and I want to have them for the first showing.

9. Contact my mortgage guy to do a handout with different mortgage rates and what the monthly payments would be at various rates before and after tax deductions. It helps buyers to see in print exactly what they are going to be paying.

10. Sign the exclusive agreement and send it to our sales department to put it into the database on a Monday. It takes about 48 hours for the listing to make it through the various database feeds and show up in the databases used by all 200+ member firms of the Real Estate Board of New York. By putting it in on Monday, everyone should see the listing on Wednesday, giving them plenty of time to work me into their Sunday schedules.

11. Sent out postcard mailing.

12. Drafted the NY Times ad (Citi Habitats pays for a NY Times ad every weekend). Deadline is Tuesday for the next Sunday paper.

13. Decide to run a potentially controversial "open house by appointment only." Make it VERY clear in our database and on our website that all showings are by appointment. Give a list of everyone who has an appointment to my doorman as proof that I am showing by appointment and not through a true "open house" in case someone balks.

14. Advertise the apartment on Craigslist to get some direct buyers. Especially with studio sales, buyers don't always have a broker yet. The target market for a studio in a building that doesn't allow pieds-a-terre is a 22 - 27 year-old first-time buyer. This generation uses Craigslist for everything. Additionally, our website ads feed into the NY Times on-line version on Thursdays, so to reach out to buyers early, Craigslist is a good place to start.

15. Before posting the ad, I draft an email explaining the financial qualifications buyers needed in order to purchase in the building. My building requires 25% down, doesn't allow students or pieds a terre, and isn't kind to freelancers or others who don't have a steady, fixed income. They also require 2 years of mortgage and maintenance payments in reserve after the down payment. I determine that my buyer must have at least $145K in the bank and must make over $105K. This is a ton of money! There are a LOT of unqualified buyers on Craigslist, so an email spelling out the financial requirements eliminates my wasting my time showing the apartment to unqualified buyers. Despite my disclaimer email, there is a ton of interest in the apartment, and I quickly line up 6 appointments for Weds night and 6 for Thursday night in 15 minute intervals. I make sure to casually mention which appointments are already taken so buyers know how desirable the apartment is. About 50% of the total inquiries that I receive realize that they aren't financially qualified for the apartment after they receive my email. Such is the nature of Craigslist buyers.

16. I advertise my apartment in my e-newsletter, which goes to over 2,300 friends, former co-workers, clients, and other agents. Basically, everyone who has emailed me since I started in this business goes in my e-mail list. They can remove themselves by the simple click of a button so I don't feel guilty for spamming.

17. Brokers and buyers start calling and emailing, so I know the apartment has officially hit the market. So exciting! I schedule 10 appointments for Sunday between 12 - 2pm. I receive an very unhappy call from the management company regarding the "open house," even though it clearly states that ALL viewings are by appointment only. I take down my "open house by appointment" ad, and try not to sweat it too much because all of the appointments are already full. I am still annoyed because it is very clear that this isn't a "free for all" open house. I have a list of everyone coming, what time they are coming, and I am escorting them to and from the lobby, so there is no security concern of people wandering the building unaccompanied. Either someone on my board is so bored that they scour the NY Times weekly to catch brokers having open houses in our building, or the other real estate agent who lives in my building tattled on me. The managing agent chuckles when I mention said broker's name, essentially confirming that she was the narc. I decide she is just bitter and must have nothing better to do so I go back to what I love most and do best... Selling and marketing apartments!

18. On the second Sunday, there is so much demand to see the apartment that I can't fit everyone in. I have a brief panic attack when I envision someone on the board seeing 5-10 people in the lobby backed up waiting for their appointments, but my problem solving skills kick in. I enlist two agents from my office so we can double up showings between 12 and 2pm. If they see people in 5-10 minute increments, I can get in at least 16 people.

19. Showings are a tremendous success and offers are coming in. I schedule "best and final" offers. In 10 days on the market I have 4 offers at or above the asking price. Two offers are from buyers who aren't really qualified, one who doesn't have a social security number and one who the board might consider a pied a terre. I choose the most qualified buyer. His broker was also smart enough to offer an odd numbered price, beating out the other offer by $1,200. Three hours later, I have already accepted the offer and sent out the deal sheet to the other broker when another offer comes in that is even higher than the "highest and best." I struggle with what to do, but I can't help but consider this other offer - the broker swears she didn't realize the offers were due by noon, she thought it was just sometime that day. I go back to the original buyer and ask them if they will match the new offer. They do! YAY!

The contracts are signed in under a week and the board package is being assembled as we speak. The buyer has better than a 25% debt to income ratio and has more than 2 years of mortgage and maintenance payments in reserve. He just started his job in September, so I ask the buyer's broker to let the buyer know that he may have to put maintenance in escrow since the building can be tough on new hires.

Toes says... Pricing is KEY, but planning and strategy is also very, very important. All your ducks should be in a row before formally putting an apartment on the market. The way you time your marketing pieces and advertising is critical to a successful first week on the market. The serious buyers all come in the first two or three weeks on the market, so you want to sell the apartment in less than 30 days or buyers will wonder what is wrong with it and why it has been on the market for so long. An apartment should come onto the market with a bang, not a whimper!

[ CLOSE ]