The Home Stretch

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The Home Stretch

11 days before closing, what can go wrong?

QUESTION:

Aside from ensuring we have our down payment funds in order prior to close, what actually has to happen to receive a "clear to close" at this point?

FWIW - The seller picked the end of the month as she is closing on the purchase of her new home and moving in a week before we are scheduled to close.

ANSWER:

The good news is that you're around 95% of the way there. While it is still possible to hit a snag, it sounds like you're in a great position to close on your side (Assuming all is clear with your Commitment Letter, down payment, and any inspection / appraisal items have been settled).  The seller's side, on the other hand, may be in a position to delay closing if their purchase / move-in timeline gets pushed.

Outside of a force-majeure or a seller delay, the most likely barrier to close, at this point, is your final walkthrough. In the event that something happens to the house in the next week, you'll have to address it between close and the walkthrough. These items are often small, but can end up being contentious for various reasons (proximity to close, additional paperwork, and nature of negotiation). 

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Using a Real Estate Attorney instead of a Real Estate agent

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Using a Real Estate Attorney instead of a Real Estate agent

QUESTION:

I met a real estate agent at a an open house near me a couple of weeks ago, and mentioned to her that I was thinking of selling my place (I really want to move to the city that most of my family lives in), but was considering my options. She gave me her card, and arranged to have a developer look at my property last week. That developer made me an offer today, and this agent wants 3% for finding this deal.

That is all fine, but my question is: I don't really view this agent as my seller's agent (we don't have a contract). She has a prior relationship with that developer, and so I think she has a conflict of interest, and thus I should not use her to handle my side of this transaction, as one might in a normal listing.

I think my most prudent move here is to hire a Real Estate Attorney to handle my side of this transaction? ...which I've never done before (I've never sold property before). I'm curious what I should expect? Do such Attorney's charge a flat rate? Or is it a % of the sales price? And other than using the yellow pages or google, what is a good way to find a good one?

ANSWER:

The attorney v. agent questions is something that we've covered before, but not in this context.

We would recommend that in this instance you should ABSOLUTELY use an attorney for the deal.  Developers do this for a living every single day and it is always in their best interests to issue the most favorable terms to the buyer.

An attorney will usually charge a flat fee.  We tend to see anywhere from $750 to $5,000 per closing, depending on your location.

Unfortunately, there is no quick and easy place to turn, currently, to find a closing attorney (outside of your network, the Yellow Pages or maybe Avvo), but we're working on that... Stay tuned.

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Is it okay to use multiple realtors?

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Is it okay to use multiple realtors?

Is it okay to use multiple realtors? If not how best to decide?

QUESTION:

I've gotten a few recommendations for realtors and I found two that I like, but they're fairly different.

One works for a small group that seems very local to the few towns I'm looking at and they know those towns well having grown up and lived in the area for decades. The other works for one of largest firm in the area but doesn't know the areas as well.

Both said they can set me up with alerts for MLS, so does that mean they both have access to all the same houses and it's just a matter of which ones they bring to me?

ANSWER:

While you can certainly work with multiple agents on the buy-side, it is not recommended, unless you clearly define the types of properties they should present and limit the geographic scope so they don't overlap. The last thing you want is to have to clear the air after both send you the same listings (which is more likely than not). 

Because all agents have access to the same MLS listings, it is always recommended to work with the one who has a deeper knowledge of a local area and more experience with that type of property (type, $/SF, size, etc.), especially if you feel that both will service you just as well as the other.  When it comes to the offer and contract, you'll want the agent who understands the in's and out's of the local homes and pricing - after all, real estate is a hyper-localized industry.  

If you've found an agent who fits all of those criteria, you may want to consider starting with them to see how it goes before looking to the second. 

As an FYI, when selling a home, you won't encounter this problem as you will enter into an exclusive listing agreement with a selling broker/agent.

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Rental Property Investment Factors

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Rental Property Investment Factors

What factors should you consider when buying an investment property to rent out?

QUESTION:

We have been considering buying property for renting, despite all the horror stories. We like the idea of running our own business and having some investment diversity.

The price of a property we're considering is reasonable and it has stable tenants that are interested in staying. The property is in an up-and-coming area so appreciation looks good. It is also close to us, so we can easily check in.

One issue we are debating is cash flow. Because we have to use financing, we have a mortgage (+IPT) which at current rents, has low positive cash flow (really, considering all expenses, probably zero). The current landlord mentioned what was thought the rents should be, and these values are inline with local rents for the same sized units I researched. This increase in rents, would cover all expenses (so MIPT + estimates for repairs, CapEx, etc.) and the cash flow would be much better. However, first year ROI is only 3%.

How much cash flow buffer is enough? I read crazy stories about people only investing in things that have 20%+ ROI but I can't see that happening in such expensive areas.

ANSWER:

This is a great idea.

The factors that you should consider when buying an investment property depend entirely on your strategy and objectives.  If you want a passive investment with yield, the most important number to consider is your Cap Rate (NOI/Purchase Price). Understanding your Pro Forma figures (what you COULD rent for) is very important, as well as the potential appreciation, but these figures can not be guaranteed. A more active investment with a value-add component would require an entirely different analysis that takes into account your cost of improvement and forward-looking ROI.

Also, keep in mind that generally, the more expensive/prime the location, the less yield you will see - as these are the more stable locations with lower risk. If you want high yield, you'll likely be looking at a cheaper unit in a less desirable neighborhood. 

You'll want to keep at least a 6 month buffer on monthly carrying costs to account for a vacancy factor (time the unit sits without a tenant) and any repairs/CapEx/OpEx.

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Lock-In Profit or Let It Ride?

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Lock-In Profit or Let It Ride?

We often get questions - like the one below - regarding whether a client should sell after seeing neighborhood appreciation or stick around to see what happens.  

QUESTION: 

Should I Take All Profits From the Sale of Old House and Invest in a Better House?

I'm living in DC and purchased a brand new condo a year ago. This was my first home purchase. I bought early in the construction process and was able to get a very good price compared to what the other people in the condo community paid. The neighborhood is quickly changing for the better, so I expect property values to continue to increase. 

That being said, a neighbor in the condo just sold, and based on that selling price I'm comfortable estimating I could sell for $100k more than I paid a year ago. Assuming that is true, would it make sense to invest all of the profit in a new house ($100k more than my current home)? I feel like that is the safest investment, but I'm new this and wanted to hear what insight you have. Thanks in advance for your help. 
 

ANSWER:

Getting into a new condo during the construction process is a great way to turn a profit in a gentrifying area. I've seen this work out well for clients in many different cities, but I've also seen sellers miss the boat when it comes to taking profit off the table.

Your decision of whether to hold or sell should be based on a number of different factors, but is usually driven by 1) the amount of appreciation that you can capture, and 2) the new housing stock (comps) that will be introduced in the neighborhood in the future. If there are more new units like yours being built, chances are that a buyer will opt for the newer condo - with all else being equal - and your condo may sit on the market or sell for a lesser price.

If you can take the profit now and find another area with similar appreciation, you'll be able to trade-up into something even nicer.

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99 Havemeyer

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99 Havemeyer

Townhouse-like triplex in prime Williamsburg with a private parking garage under $1.3M from Alyssa Brody at Compass? Yes please.

99 Havemeyer offers you the terrific opportunity to own a truly unique 2-bedroom, 1.5-bathroom triplex complete with a spacious recreation room and private parking garage with direct access into the apartment. The first level offers a bright open living/dining room layout with 11-foot floor-to-ceiling windows. The eat-in kitchen features white quartz countertops, mosaic tile backsplashes, Italian crafted cabinetry by Miton, and stainless steel appliances from Bosch and LG. Both of the spa-like bathrooms are wrapped in Porcelanosa white porcelain tiles and the master bath features a Vita deep soaking tub with glass enclosure. Other notable highlights of the triplex are its custom California closets, white oak flooring, vented washer/dryer, central air and heat and a home security system. The spacious master bedroom boasts a sizeable secluded private balcony.

See more here.

About the Neighborhood:

Williamsburg is a vibrant, festive neighborhood that doesn't just follow trends but also creates them. From outdoors movie screenings, farm-to-table restaurants like Reynard, to the annual food and flea markets on the waterfront like Smorgasburg, Williamsburg has established itself as a leader and creator of the latest fads. Private rooftop parties, lively music concerts, and award-winning eats all within the neighborhood. There's no need to venture far for a great time.  Can't miss spots include: Peter Luger Steakhouse, Brooklyn Brewery, and the Roebling Tea Room.

Transportation: J | M | Z | G | L

99 Havemeyer #2A

Unit Details:

  • Price: $1.25M
  • Type: Condo
  • CC:  $465
  • Tax: $26
  • 421(a): Yes
  • Bed/Bath: 1/1.5
  • SF: 1,102 SF
  • Garage: 2 Car

Unit Features:

  • Private Balcony
  • 11' Ceilings
  • Private Garage
  • No pets
  • W/D in unit
  • Soaking tub 
  • California closets

Location:

 

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Is My Broker Legit?

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Is My Broker Legit?

The NY Times published a pretty legit article this AM entitled "Is My Broker Legit?"

They mentioned a couple of quick hits:

  1. Make sure the broker is licensed
  2. Expect a contract
  3. Google them
  4. Get a referral
  5. Cash is a red flag

But you all know that this is just the beginning. Don't stop there. You'll also want to know:

  1. Have they worked in the neighborhood before?
  2. Do they have experience in that price range?
  3. What was the last property they bought or sold that was similar?
  4. Do they know neighborhood pricing trends?
  5. Are they currently representing clients similar to you?

A home purchase or sale is a big deal - don't stop with the easy questions. 

Need some more advice? Check out our free guide 5 Questions You MUST Ask Your Agent.

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300 East 23rd Street #11A

300 East 23rd Street #11A

Welcome home to this modern and spacious 2 bedroom and 2 bathroom condo with a private balcony in one the most sought-after buildings in the Gramercy Park area. 


About the Unit:

This apartment features 10’ floor-to-ceiling windows, a State of the art open chef's kitchen by Gruppo Italia with white lacquer cabinetry, stone countertops and back-splash, Sub-Zero & Bosch appliances and Dornbracht fixtures, a polished stone breakfast bar for 4, central heat and air, an in-unit washer/dryer, custom closets and dark espresso Merbau wide-planked hardwood floors throughout. 

The master bedroom is connected to a luxurious en-suite bathroom with a glacier glass tile accent wall, glass stand up shower and Terrazzo flooring. The second bathroom features a Zuma deep soaking tub. 

*There is currently a tenant in the unit.  Pictures from previous listing.


About the TEMPO:

The TEMPO has a 24 hour, full service doorman, package delivery room, state of the art fitness center, sauna and massage treatment room, a 2,000 sq ft outdoor garden with movie screening area, and a 3,300 sq ft outdoor sky lounge offering spectacular panoramic views of the city with seating, lounging beds and outdoor kitchen. 

90% financing allowed.


About the Neighborhood:

Just steps away from Gramercy Park, and The National Arts Club, the TEMPO is in walking distance to Union Square, numerous subway lines, and the city’s best shops, restaurants and nightlife such as: Irving PlazaThe Edition HotelGramercy Tavern, ABC Kitchen, and one of the hottest new restaurants in NYC - Sugarfish.


300 East 23rd #11A
The Tempo

Property Details:

  • Price: $2,350,000
  • Type: Condo
  • CC: $1,732/MO
  • Tax: $902/MO
  • 421(a): 2022
  • Bed/Bath: 2 / 2 
  • SF: 1,205 SF
  • Balcony: 68 SF 

Property Features:

  • 90% Financing
  • W/D In-Unit
  • Walk-In Closets
  • Central Air
  • Full-time Doorman
  • Gym
  • Live-In Super
  • Storage Available
  • Bike Room
  • Concierge
  • Pets Allowed

 

View listing on Street Easy

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