Purchasing Property in New York City
C.T. Lee & Associates has prepared the following step-by-step guide for you to understand the process of purchasing an apartment in New York City and the many issues to take into consideration:
- First, find a broker and look at property listings based on your needs. Contact our firm if you have no broker and we can refer one to you!
- Tip: the seller’s side pays all brokers fees so there is no harm to you as a buyer to find a broker who is knowledgeable about specific buildings and neighborhoods in New York.
- Tip: condo or co-op? Most foreign buyers choose to buy a condo because there are far less restrictions. Although condos generally cost at least 10% more than a co-op, the buyer owns the property outright and can make decisions without approaching a board. Alternatively, buying into a co-op means you are buying shares in a corporation (at closing you will receive a stock certificate) and many decisions need to be approved by the co-op board. These decisions could include: who can live or lease the apartment, whether repairs or additions can be made, and even whether you can own a pet. Co-ops also typically have a “flip tax” whenever the owner wants to sell the apartment, which can range from 1-10% of the purchase price. The general policy for these restrictions for co-ops is to have long term respectful tenants but foreign buyers usually find co-ops too restrictive.
- Next, put an offer down. In a “seller’s market” where there is more demand than supply, buyers should bid equal or slightly greater than the asking price. In a “buyer’s market” where there is more supply than demand, the buyer can bid lower than the asking price. Once the seller accepts the offer, have your broker give the seller’s broker the name and contact information of your attorney. The seller’s broker will create a “deal sheet” with everyone’s contact information and send it to all parties.
- Tip: indicate that the offer is all cash if no loan will be taken out. This is much more attractive to a seller because there is no bank to deal with and the transaction is faster. All cash buyers sometimes even have the leverage to bid lower.
- Tip: obtaining a loan as a foreign buyer is extremely difficult because the buyer usually has no credit history in the U.S. so the bank cannot assess how risky it would be to lend money. However, there are banks that lend to foreign buyers, especially if the buyer is willing to put down at least half of the purchase price in cash.
- The seller’s attorney will now send a contract of sale to your (buyer’s) lawyer designated on the deal sheet. Your lawyer must respond to the contract within a reasonable period of time, which is generally up to two weeks.
- Tip: look for a good attorney! This is will be one of the biggest purchases you make in your life. It makes no sense to look for the cheapest attorney.
- Buyer’s lawyer and seller’s lawyer will negotiate certain terms of the contract. These usually include deadline dates for when inspection must be done, bank loan must be obtained, or date of closing. Other negotiated terms include what to do if the seller is staying in the premises after the closing date and any specific repairs that should be made. If buyer is buying a co-op, the buyer’s broker or buyer’s lawyer also needs to obtain the co-op financials, bylaws, and house rules.
- Tip: one of the most important jobs of a buyer’s attorney is to view the board “meeting minutes” for the monthly board’s monthly meetings. This holds true for co-ops but also condos that have boards. A lot can be revealed in the meeting minutes including continuing problems, increase in maintenance, and even your future neighbors.
- While the contract is being negotiated, you should hire a home inspector to enter the apartment and inspect it for any problems. The home inspector will create a report. The buyer’s attorney and seller’s attorney will then negotiate on how to handle the problems. Usually, it is agreed that the issue must be fixed before closing or the seller must pay a certain amount based on the issue. Other times the buyer and seller will just agree on a fixed amount for all repairs that the seller will give as a credit to the buyer.
- Tip: the earlier you do a inspection the better. Some buyers even hire an inspector before contracts are issued so they can negotiate the price down more. However, this is usually bad practice because the buyer usually does not want the purchase price to be lower than market since it may affect the price they sell at later.
- Tip: the goal of the lawyers is to protect the downpayment. If anything goes wrong, the seller will try and keep the downpayment and the buyer will try to get it back. But neither lawyer’s job is to obstruct the transaction.
- After the contract is fully negotiated and the buyer and seller sign, the buyer usually sends a check for 10% of the purchase price to the seller’s attorney. The seller’s attorney puts the downpayment (called “earnest money”) into their escrow account. The money is only released from the escrow account at closing, if the deal falls apart, or after litigation and a court orders so.
- Tip: the process up to this point could be as quick one week or as slow as one month.
- The buyer’s lawyer next should hire a title company to examine the title of the property. Here, the title company will search to see if there are any liens on the property, violations against the property, or any other claims of title against the property. Once the title report is received, then any issues must be resolved before the closing or the seller should agree to pay the buyer to fix the problem. The title company will also sell the buyer title insurance
- Tip: you should always buy title insurance, which is a one-time purchase. The concept of title is that each previous owner legally owned the property. If there is a break in title and you bought a home that a previous owner did not own and therefore could not sell to you, the title company will pay for the entire purchase price. Although this situation rarely happens, it is not worth gambling. Common examples of why a previous owner may not own a property is divorce (spouse owned half the property), estate (invalid will), and fraud.
- If there is a loan, it is the buyer’s job to follow up with the bank to obtain the loan. But the buyer’s lawyer should check in periodically to make sure everything regarding the loan is on track. Remember: the buyer must present certain proof that the bank will loan them money (called a “commitment letter”) by a certain negotiated date and if the buyer misses this date and does not inform the seller, the buyer could lose the whole downpayment!
- Immediately before the closing, the seller’s lawyer and buyer’s lawyer calculate adjustments. For example, if the seller pre-paid for property taxes, then the buyer must pay back the seller for the days that seller already paid for. Adjustments are usually calculated through a daily rate.
- Finally, at the closing, the buyer and seller sign the closing documents, bank documents (if there is a loan), and keys are exchanged. The parties present at the closing are seller, seller’s broker, seller’s lawyer, buyer, buyer’s broker, buyers lawyer, bank attorney, and title closer.
- Tip: an all cash closing is typically much faster because no bank is involved. We have done all cash deals in one week, but typically they take about three weeks. ]
- Tip: if the buyer cannot attend the closing a power of attorney can be created. But this should be done at least several days before closing because the title company and the bank must approve the power of attorney in order to close.
小提示 b): 购买产权公寓 (Condo)还是合作公寓 (co-op) 呢？大多数的国外买家喜欢买一些产权公寓，因为相比之下购买产权公寓所收到的限制和约束要少的多。即使它比普通的合作公寓起码要贵10%。但是即便这样，买家会拥有所购公寓的全部产权并且可以自己做决定而不用通过董事会。相比较之下，购买合作公寓意味着您购买的是一家公司的股份（在购买之后您会收到一份股票持有证书）。所以在这种情况下，您的许多决定都需要通过公寓董事会的认可才行。这些决定大致包括，谁可以居住或者租赁公寓、是否可以对公寓进行修理、甚至是否可以在公寓内养宠物等等。除此之外，合作公寓有一个特殊的地方：当公寓的主人想要出售的时候，合作公寓大概会收取购买价格1%到10%的卖方过户费 (flip tax)。它的这一系列的政策限制主要是为了寻找长期的承租人或者说居住者。但是一些国外的买家通常认为合作公寓限制太多而不愿意去尝试购买。
- 通过房产经纪的帮助下报价（offer）。卖方的市场 (Sellers’ market) 情况一般是：僧多粥少。简单来说就是说需求往往比供应要多的多。因此，买家需要出和叫价相等甚至稍微高一点的价格来锁定房产，因为卖家会有更大的决策权来寻找更加满意的价格。然而，另一种就是买方的市场了（Buyers’ market），这种市场通常就是供应大于需求。因此，买家通常就可以出比叫价要低的价格来锁定房产了。这种情况下，买家拥有更多能力来决定成交价格。一旦卖家接受您的报价之后，您就需要联系您的经纪人然后请他（她）把您的律师的姓名以及联系方式递交给卖方律师。然后卖方的房产经纪会起草一份成交记录单（deal sheet）,里面会包括双方所有人的联系信息然后他（她）会把这份记录单发给所有参与此次购房活动的人，比如说双方的律师。
小提示 a) 如果没有贷款的话，请一定指出买方的报价全部都是现金。这个会成为一个吸引卖方的点。因为交易过程中不会有银行的加入，所以交易会相对来说快得多。甚至全部用现金买房的买家有些时候会拥有叫低价的权利。
小提示 b) 作为一位外国来的买家在美国获得贷款是非常难的。因为买家通常不会在美国有信用记录，所以银行不能评估借钱给他们的风险有多大。然而，还是会有一些银行会贷款给国外买家的，尤其是当买家乐意用现金支付最少一半的房价的时候。
- 买房的律师和卖方律师会就合同的几点内容进行商议。一般包括一些具体的事情的截止日期，比如说，房产检查、银行贷款、交易截止日等等。除此之外，一些其他的可商议的合同细节包括：如果在交易截止日之后卖家还待在所售房屋中应该怎么办，或者房子的哪些具体的地方需要维修等。如果买家是买合作公寓的话，他（她）的房产经纪或者房产律师也需要获得该公寓的资金和财产证明（financials）,规章（bylaws），以及公寓守则（house rules）等文件。
小提示：买方购房律师最重要的一项工作就是审阅月董事会月会的管事会会议记录。（board “meeting minutes”）这项工作对于合作公寓和拥有董事会的产权公寓均有效且必须。因为很多事情都可以从这个会议记录中透露出来。比如说，公寓的一些长期的发展问题（continuing problems）（比如，电梯运行是否良好之类）,公寓维持费用的增长，甚至您未来的邻居的情况等等。
- 当合同的细节在商议的时候，您需要聘请一名房屋检查员（home inspector）进入您即将购买的房产中进行购买前检查来排除房屋的一些问题。然后，检查员会做一份报告。接下来双方律师会坐下来商讨如何解决这些问题（如果有的话）。通常情况下，这些问题是需要在成交之前就要解决的，然后卖方视情况需要支付一定的修理费用。其他情况下，买卖双方会就一定的修理费用达成共识，然后卖家会给付给买家这部分的修理费用，但是房子的价格是不会改变的。
小提示b) 律师的主要目的是保护成交的头期款（down payments）。如果有什么地方进行的不对劲的话，卖家会尝试着留下这比头期款，然后买家会尝试着把它拿回来。但是买卖双方两个律师的职责都不是妨碍交易。
- 接下来，买房律师需要聘请产权公司（title company）来检验房屋产权。在这里，产权公司会调查房屋是否已经被抵押，房屋是否违规，或者一些对于此房屋的其他的关于产权的一些索赔（claims）等等。一旦产权报告被接收，任何问题都需要在房屋成交之前解决。或者卖家需要同意支付买方一定的费用来进行维修。除此之外，产权公司也会卖给买家产权保险 （title insurance）。
- 如果您是贷款买房的话，作为买家，您的责任就是联系银行来获得贷款。但是买方的律师需要定期的记录以确定贷款的进度是否保持正轨。请记住：买家必须在商定好的时间展示给卖家一些能够证明银行贷款的证据。（承诺信 “commitment letter”）如果买家错过了这个日期而没有通知卖家的话，买家就会失去他们所有的头期款！
- 在成交之前，买卖双方的律师会立即计算调整费用。比如说，如果卖家预付了房屋所有税（property tax），买家此时必须付还给卖家这些钱。这些调整的费用通常会以税的日利率（daily rate）来计算。
小提示 a) 因为没有银行的介入，所以全现金的交易会快的多。我们律所曾经处理过的全现金交易只用了一周的时间，但是通常情况下，整个过程大概会需要三周的时间。
小提示 b) 如果买主不能参加交易的话，就需要请代理人全权处理了。但是这个授权至少需要在交易日前几天完成，因为这必须要经过产权公司和银行的批准才能够交易。