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Where To Start - If You’re Renting?
Before you start looking for an apartment, it's important to know what you're looking for and what it takes to get it.
Searching for an apartment for rent in Manhattan is a unique experience. The most desirable and affordable apartments in NYC rent quickly and most are available for immediate occupancy. It is important to be prepared and ready when you find the apartment you want.
Know what you want:
- What is your targeted moving date?
It's a good idea to start your search as close as possible to your target move-in date, and no more than a month ahead of time. Vacant apartments are available for immediate occupancy. An occupied apartment may not be available for a couple of weeks, but the landlord will sign the lease for future occupancy. Hence, most rental decisions are made on the spot.
- Reserve a day or two to see apartments with your agent, have a general idea of your budget, and familiarize yourself with the many neighborhoods that are New York City.
- How much can I spend?
As a rule, landlords require their tenants to earn an annual income of 40 to 50 times their monthly rent. Specifically, if you earn $50k a year, you qualify for an apartment that rents from $1000 to $1250 a month. If your salary is does not meet the rent to income rule, or if you’re a student, you’ll need extra rent and security and/or a "Guarantor," who’ll co-sign the lease. (For more information, see Guarantors, below).
- When two or more unmarried tenants sign a lease, (roommates), landlords, in general, don’t combine incomes. Most often, one applicant needs to earn 40 to 50 times the monthly rent.
- Where do you want to live?
Manhattan is a city of diverse neighborhoods, all with their own unique appeal. Decide what's most important to you. Do you want to be close to work, or is proximity to a subway station sufficient? Is it convenience or ambience that's most important? It's good to be open to alternative ideas. Neighborhoods other than your "first choice" might be more affordable. Your agent will explain a number of neighborhood options that can meet your needs and recommend other areas that you may not be aware of. Remember that you are relying on our knowledge to get the best deal.
Know what it takes
- Qualifications:
- In America's most densely populated city, the competition for housing can be fierce. Landlords all have very specific application requirements that are unlike any you will find elsewhere: Verifiable Income: The average minimum is 40 to 50 times the monthly rent.
- Good Credit:
A credit check is a part of the application process. A pattern of late payments or bankruptcies or if you’re new to this country and do not have a social security number or a credit history, additional rent or security, paid in advance, or a " USA Guarantor" may be required.
- Documentation:
All landlords require the following documents in order to process an application:
- Application Form:
You’ll need to provide employment history, previous addresses and landlord information, references and financial assets, including savings and checking account numbers.
- Letter of Employment:
A typed document (on company letterhead) listing your salary, position, and length of employment, Including corporate contact information for verification purposes. If you are just starting a new job, an offer letter is sufficient. If you are self-employed, a copy of the first two pages of your most recent Federal tax return or a letter from your attorney or accountant.
- Pay Stub:
A copy of the most recent pay stub from your current employer
- Photo Identification:
A valid Driver's License, Passport, or Student ID.
- Note: any co-applicant must also provide the above documentation.
- Guarantors:
If you do not meet the minimum income requirements or have a credit problem, a Guarantor may be required. This is a co-signor, usually a family member, who agrees to guarantee the terms and conditions of the lease in case you default. They must earn between 80 and 100 times the monthly rent and have a solid credit history.
- Some landlords require that the Guarantor live in the tri-state area, (New York, New Jersey, or Connecticut), and to provide the following:
- * A copy of the first two pages of their most recent Federal tax return
- * If self-employed, a letter from an attorney or accountant verifying their annual income
- * A completed application form as a "Guarantor"
- Deposit Money:
You’ll need one month's rent and one month's security to complete the application process.
- Payment must be in the form of a bank certified check, traveler's checks, money order, wire transfer, or cash.
- Landlords do not accept personal checks for the initial rent and security and will not consider an application without it. Therefore, we strongly recommend that you make the necessary financial arrangements before going to see apartments.
- You should also have your employment and Guarantor documentation with you when you arrive in our office.
Find your apartment
- Unlike most real estate brokers who first meet their clients on the street, we welcome clients to our office for an initial consult. During this time, we familiarize you on the current market and build a profile of your needs based on budget, desired location, types of apartments available, and other considerations.
We utilize a wide array of tools to expedite your apartment selection process. Our extensive database of available apartments is updated continuously throughout the day by means of direct contact between our listings department and the city's best landlords and management companies.
Our photo library is an ever-expanding collection of thousands of apartments to provide visual and spatial representation of select buildings and apartments. You will receive a better understanding of the market before you leave the office.
- Upon completion of the initial consultation, your agent will show you a carefully selected list of available apartments. The combination of the agent's knowledge and experience and your customized profile guarantees that the apartments you see are the apartments you want. This process has been perfected through over two decades and will save you time, money, and effort.
Our goal is to find you an apartment in one day!
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Where To Start - If You’re Buying?
The most desirable and affordable properties can go to
contract in
a matter of days. You don't want to lose your best choice
because you're
not prepared and ready to make the necessary decision. If you
are ready
to commit to finding a new home, the following information
will guide
you through the exciting process of buying an apartment in New
York
City.
What is the target date for your move?
If you plan to seek mortgage financing, you should know
that it takes
an average of three months for a purchase to close.
Therefore,
you should begin your search four to six months before you
wish
to move.
A. Finanical Needs
- Annual Income:
You can generally borrow up to about twice your gross
annual
income, and more, if you have significant liquid
assets. Otherwise,
your monthly mortgage + maintenance payments ideally
should
not exceed a week's gross salary. - Financial Statement:
A financial statement should be prepared by your
accountant listing
your net worth (assets, liabilities, salary, bonus,
etc.).
We submit all offers with financial substantiation and
suggest
having your financial statement completed as quickly
as possible.
With many apartments receiving multiple bids, it's not
always
the highest bidder, but the most "qualified" buyer
whose offer is accepted.
- Asset Valuation:
A down payment alone will not qualify you to buy a co-op
or a
condo in Manhattan. To guarantee timely collection of
your
maintenance payments, the Board will look for
assurance against
unexpected loss of income. Most cooperative buildings
require
liquid assets to cover a minimum of one year's
maintenance
and mortgage payments after closing.
Many buildings require in liquidity up to three years of
combined
costs.
Your Stock Group professional will guide and assist you
with
the specific necessary requirements.
Reserve a day or two to see apartments with your agent,
have
a general idea of your budget, and familiarize yourself
with
the many neighborhoods that are New York City.
- Credit Check:
Check your credit history. Resolve any disputed claim
and have
it removed as soon as possible. Keep all of the
documentation
that shows the matter has been resolved.
- Choose a Mortgage Broker:
Mortgage
brokers
save time and money. Your agent can assist you in
selecting a
mortgage broker. Be "Pre-Qualified" - "Pre-Approved":
All offers submitted by us are accompanied by the
buyer's pre-qualification
letter if there will be financing. Being pre-qualified
means
that you've told the lender your income level and debt
and credit
information and the lender has provided an estimate of
the loan
you can afford. A buyer with pre-qualified loan
financing has
the advantage of reassuring the seller that they are
serious
and qualified for the purchase.
A consultation with a mortgage broker will provide you
with an
overview of financing options, estimated monthly
payments, and
necessary qualifications. The strongest offers are made
with
pre-approved letters. This means the lender has pulled
your credit
report, checked your debt-to-income ratio and has
performed a
detailed analysis of your financial situation. It is
preferable
to be pre-approved so that there will be no surprises
when the
credit report is received. - Select an Attorney:
It is essential to select an attorney who specializes in
Manhattan
real estate. In today's fast market, it's important to
use
a professional who's knowledgeable and can respond
quickly.
We can assist you in selecting a qualified real estate
attorney. - Application Process:
For your mortgage and Board applications, you will need
to gather
financial documentation such as the last two months of
your
bank and brokerage statements and other proof of
assets. In
addition to current income verification, Boards and
banks require
a minimum of two years of federal income tax returns.
If you are self-employed, you will need to provide a
minimum
of three years of federal tax returns and a letter from
your
accountant verifying your current income. - Where do you want to live?
Manhattan is a city of diverse neighborhoods, all with
their
own unique appeal. Before you begin your search,
decide what
is important to you: do you want to be close to work
or is
proximity to public transportation sufficient? Do you
prefer
a residential neighborhood or a bustling hub of
activity and
nightlife? It is good to be open to alternative areas.
Neighborhoods
other than your "first choice" might be more
affordable
and offer many of the same features. Your agent can
recommend
excellent areas that you may not yet be aware of. - What's your budget?
If you are considering buying an apartment in NYC, the
first
step is determining your price range.
The following are the two basic rules:
- You can generally borrow twice your annual gross income.
- You need to have cash for a down payment.
- Many co-ops require at least 25% down, sometimes more.
- You may have heard about FHA and VA mortgages where financing
is available up to 97% of the purchase price. This
generally
does not apply in Manhattan; most purchase deals involve
conventional
financing. You may be able to obtain maximum financing
for a
condominium, but most co-op boards do not allow more
than 75%.
Some buildings do not allow any financing at all.
| Average co-op prices in today's market: |
| Studios |
$200,000 - 500,000 |
| 1 Bed Room's |
$550,000 - 900,000 + |
| 2 Bed Room's |
$900,000 - $2,000,000 + |
| 3 Bed Room's |
$2,000,000 - $3,000,000 + |
| Condos average 25-40% higher
for a comparable
apt. |
B. START YOUR SEARCH
- "Sell yourself" as a qualified buyer.
Whether you're buying a studio or a building, there may be
only
a limited number of properties available in your price
range.
In a tight market, good properties often go to contract
before
they appear in the classified ads and agents always
notify
their serious buyers first. The best way to be first on
the
call list when an agent gets in a hot new listing is to
prove
to them you're a "ready buyer:" Have your financial
documents in order, get pre-approved for mortgage
financing
if applicable, and take the time to thoroughly explain
your
needs. Be direct about your budget, timetable, and
specific
apartment or neighborhood priorities. - Be available and flexible to view properties.
Many of the "better" buildings
permit showings only between 10 A.M. and 3 P.M. during
the work
week. By making yourself available to view a property
during
the work week, you avoid the congestion of weekend
shoppers and
the heavy competition of "open houses". There is nothing
more exciting than being the first buyer to make an offer.
C. MAKE THE DEAL
- When you find the property you want, make
a verbal offer immediately.
- Strategize with your agent about
how to best present your offer to the seller. There are many
factors
besides price that can influence the seller's choice of
buyer.
- Verbal offers are not legally binding. When a seller
accepts
a verbal offer it means they are ready to do business. Your
agent
will place all offers in writing.
- Once the offer is accepted, your agent will prepare a
transaction
summary which will be sent to both the seller's and
buyer's attorneys.
- Based on this information, the seller's attorney will
prepare
a contract of sale. After your attorney has reviewed and
negotiated
the contract and reviewed the building's financial
statements,
you will sign the contract. At that point, the contract
and your
down-payment check - customarily 10% of the contract of
sale
price held most often in the selling attorney's escrow
account
- will be sent to the seller's attorney. The seller will
then
execute the contract. The offer only becomes legally
binding
when both buyer and seller sign the contract of sale. In
this
market, sellers are often tempted by higher offers, so
it is
imperative to be prepared and make sure your attorney
moves quickly
to review the financials and complete the contract.
D. CLOSE THE DEAL
- Unless the purchase is an "all cash"
deal,
you should apply for a mortgage as soon as both parties sign
the
contract.
- The mortgage process can take up to 45 days and involves
several
stages:
- Your mortgage broker needs to compile your financial
information
and present your loan application
- The bank sends an appraiser to assess the value of the
property
- The underwriters review the loan package and issue a
commitment.
- Immediately, while your loan is being processed,
review
and prepare your Board package with your agent!
- You will be provided a purchase application package which
varies from
building to building. A Board's financial requirements mirror those
requested by the bank, so keep a copy of the mortgage application
and all related documents.
- In addition, you will need to gather letters
of reference: personal, professional, financial, and, if
you
are currently living in a rental, a letter from your
current
landlord. Your agent has examples of what needs to be
compiled
and examples of referral letters.
- Do not take a Board package
for granted. You need to answer all questions and give a
clear,
concise picture of your financial qualifications. Your
agent
will review the collected materials, organize the
presentation,
write the cover letter and submit the package.
- When you receive your mortgage/loan commitment letter, the
Board package immediately is submitted to the building's
Managing
Agent. The Managing Agent reviews the application,
checks credit
and references, and submits the package to the Board.
- The Board will review the completed package. Sometimes
they
may ask for additional information to evaluate the
submitted
information. Should the package be submitted without
question
a Board interview will be scheduled.
- The timing of the interview
depends on the Board: some Boards have an interview
committee
that meets on demand while others schedule interviews
during
their monthly meeting. Your broker will inform you
of the
time and date of the meeting and they will prepare you
for the
interview.
- Closing is customarily scheduled after the
Board has
approved the package and completed the interview process.
- Depending on
the availability of all parties involved (managing
agent, buyer
and seller, both lawyers, both banks), closing usually
take place
within two weeks of final approval.
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