Tuesday, February 20, 2007

New Apt

I'm in the process of buying a co-op which has been a long process; rather than bore with the details of my hunt, I thought I'd share a few lessons learned:

  1. Co-op vs condo: the long and short seems to be that in a condo, you own the apt. and everything is your responsibility, while in the co-op you own shares, which entitle you to live in a certain unit (the collective shares responsibility for the building). Additionally, co-ops often have boards which oversee what happens in the building (ie building improvements & whether a prospective tenant can buy into the building). Nothing revolutionary here; I managed to find a "cond-op" so some of the restrictions aren't present, but i still get the advantage of everyone being responsible for the building.

  2. Agents - can't live with 'em, can't live without 'em: my agent has been with me for three moves now. While she has helped me tremendously, I often wonder about their added value. At the end of the day she collected 2.5% of the purchase price in exchange for putting me on the list for 6 open houses, showing me one apt (to which she was late), and trying to convince me that the housing market is on fire (while I don't doubt this in NY, I also am confident in saying this is not a nation wide trend, and even here things aren't as fast as they've been).

  3. Steps: I guess I never knew the steps involved (and neither did my agent really - see above): 1) find an apt 2) make a bid 3) once bid is accepted, legal review 4) sign contract (and make down payment) 5) find a mortgage 6) close (as mentioned above, some co-ops require board approval in the process)

  4. Negotiate - if you've read Freakonomics then you know about incentives in real estate; I can only vouch for this. Once the two agents knew that i was willing to pay the ask, and negotiate on other closing costs, I had much greater success in achieving concessions.

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