Step 1: Pre-qualify for a Mortgage
All-cash buyers can skip this step. If financing, it is advised that you pre-qualify for a mortgage with a
brokerage firm prior to beginning your housing search. Determine how much of an investment you can
afford. If you don't know how much a bank is willing to lend you, you may waste everyone's time looking
at complexes that are too expensive. Additionally, a pre-approval assures the seller that you are
qualified, providing you with an advantage when bidding on a home.
Getting a Pre-approval letter is a cursory process that involves calling up a lender or mortgage broker,
spending a few minutes on the phone answering questions about your income and financial history, and
pretty much immediately receiving a letter stating that you are preapproved for a loan up to X amount
at an interest rate of Y.
Step 2: Decide Your Property Type
In buying a home, there are many different housing types for you to consider. Each has its own benefits
depending on your financial situation and your personal homeownership goals. The following is a list of
some of the property types that you can choose from and some important things to consider.
A single-family home is a building intended to house one family.
- To a large degree, "your space" is your own. You can modify or improve it as you wish.
- Re-sale value is generally the highest on single family detached homes.
- Generally there are no property management fees as there are in condominiums and manytownhouses.
All maintenance and repair costs-- interior, exterior and everything in between-- are yours.
Lack of amenities (for example, pools, playgrounds, etc.) that you may find in other types of housing.
You are responsible for landscaping and lawn upkeep costs.
In most areas, single family homes are more expensive than townhouses or condominiums.
It is worth investing in this type of property if you know that you value complete freedom and privacy;
but you also must be able to take full responsibility for any repairs or renovations that need to be done.
A multiple- family home is a small home with rental units.
The rent you collect will increase your income and will provide you with more money to pay
your mortgage. The bank or mortgage lender may be more willing to take a larger mortgage or
may accept a lower household income because they know that you will also be collecting rent.
By having multiple “doors” (as they are referred to in the industry) to rent, it lessens the risk of
having no income for the landlord.
It helps spread out the cost of repairs and capital improvements.
The initial purchase price of a two or three family may be slightly more than the cost of a single
family home. You will be held to a higher standard for down payment and reserves.
A problem caused by one tenant can quickly be magnified and cause issues with other tenants,
i.e., a bathtub overflowing on the third floor allowing water into all the units below it.
Multiple tenants can also cause issues. With more people you have the possibility of having
more drama between tenants. Drama can ensue and you as a landlord can be responsible for
some of those issues. Police departments and cities are starting to charge property owners for
Weighing these various pros and cons against each other can help you determine which is best for you.
Real Estate investing carries with it risk, but is also carries with it the possibility of big profits and cash
Cooperative or "Co-op"
Co-op is a building or development that is owned by its shareholders and is organized as a corporation.
Ownership of shares in the corporation entitles each shareholder to hold the lease for one or more
apartments or houses. Shareholders share responsibility for the use and maintenance of public spaces in
the building, such as the lobby, laundry room and hallways. Shareholders also have some control over
who is allowed to buy into the building; to review their financial solvency, decide whether pets will be
allowed, decide whether and when certain improvements will be made building wide, whether
subletting will be allowed, and other issues.
Co-op is cheaper than Condo.
All your neighbors have been screened by a board. They are financially stable, they can afford
their home, and they have letters of reference from a variety of sources. They have agreed to
abide by house rules.
Rental activity is tightly controlled-- not forbidden, usually, but controlled. You don't have to
worry about your owner-mostly building turning into a renter-mostly building.
If a resident is being obnoxious, you can actually take action that works.
One of the issues with co-ops is subleasing, most co-ops allow the owners to sublease for one to
two years and then move back into the apartment. The renters oftentimes have to be
interviewed by the board and disclose their finances.
Because of the nature of ownership, coops do have more restrictions. The cooperative owns
everything. You just own shares that entitle you to occupancy of a specific unit.
Mortgage rates on co-ops are more expensive than for condos, as it is easier for a bank to resell
a condo-with no co-op Board involvement-should it have to foreclose on the property.
The amount of money that may be financed is determined by each cooperative. Some buildings
require substantial down payments. Generally speaking, in Manhattan prospective purchasers
should be prepared to "put down" at least 20 to 50% of the purchase price (depending on the
building) when purchasing a cooperative apartment.
Every co-op is a unique situation. There are co-ops that have essentially no meaningful restrictions,
there are co-ops that require all kinds of things that very, very few people indeed can meet.
Condominiums or "Condos"
A condominium is a building or development with individually-owned apartments or houses. The owner
has his or her own deed to the unit. The owner also holds a common or joint ownership in all common
areas or facilities that serve the project-land, roof, entrance elevators, hallways, etc. The condo
association elects a Board of Managers to administer the maintenance of the common property. Condo
owners pay their own property taxes on their units, and they pay monthly-usually low-common charges
for operating expenses and taxes on the shared areas of the property.
Because condos have no Board to approve prospective buyers, condos are easier to buy.
Condo boards and resident owners tend not to like rental units, there's far less that they can do
to prevent rentals.
Comparing with house, there's no need to buy and maintain a lawn mower, snow blower or
other expensive gear, which also reduces storage needs.
Since you actually own your condo, you can take advantage of tax deductions such as the
interest on your mortgage.
Condos are usually located in urban areas and within walking distance to shops, restaurants and
other places of interest.
Some also have resort-like amenities, such as pools and fitness centers that would be cost-
prohibitive in a house.
Condos tend to be smaller and cost more per square foot than co-ops.
Condominiums often appreciate in value much slower than single-family homes. This is because
you don’t own any land, which is the biggest driver for appreciation. Instead, you only own the
living space. There’s a big difference.
With people living busier lives, condos are an attractive choice because of their convenience and low-
Step 3: Find the Right Building
The lexicon of dwelling types is practically infinite. If you’re considering a move to the Big Apple, we’ve
got a simple glossary to help you navigate the maze of apartment options.
‘Pre-War’ VS ‘Post War’ VS New Construction
A pre-war apartment was built before World War II, with thick walls and sturdy construction, often
featuring crown moldings, arched doorways and other old world elements. On the positive side, they
tend to be very solidly constructed with more gracious proportions, from room size to closet size to
ceiling height. On the negative side, prewar buildings tend to have fewer amenities, and unlike the
newest crop of construction, comparatively few allow in-unit washer dryers.
Postwar buildings basically span the period from World War II up until the latest circa-2000 construction
boom. Usually, walls between apartments in post-war buildings are much thinner than their
predecessors, thanks to inexpensive modern innovations like drywall. They are likely to have amenities
like laundry rooms and fitness centers, and their windows, bathrooms, and elevators are often larger
than prewar, but many are also known for their low ceilings and slapdash construction that shows up in
noise-transmitting walls and floors.
New construction buildings born in the most recent (post-2000) construction boom and afterward tend
to lavish much attention on style and design. Hallmarks include an emphasis on floor-to- ceiling
windows, open kitchens, and amenity spaces that can range from full-service gyms and screening rooms
to pet spas, landscaped roof terraces and children’s playrooms with a full schedule of classes and
activities. Many units were designed to accommodate washer-dryers. All of this comes at a cost: The
sense of spaciousness provided by huge windows and open kitchens allow developers to shave actual
square feet from living areas. Amenities boost the common charges. Newer buildings may be less
conveniently located than older housing stock.
‘Doorman’ VS ‘Attended Lobby (or ‘Concierge’)’ VS ‘Full Service’ VS ‘No Doorman’
These terms are sometimes confused or misused. Simply put:
A doorman is a uniformed individual who helps residents and invited guests into the building;
An attended lobby features an attendant or concierge behind a desk inside who can welcome visitors
and also help with receiving deliveries and the like;
A full-service building has all the trimmings you would expect such as porters, a resident manager, and
possibly a concierge in addition to round-the- clock doormen.
Some buildings have none of these services (i.e., “no doorman.”)
An elevator building has an elevator (pretty obvious), but no doorman or concierge. Generally, these
apartments feature voice or video intercoms through which residents can buzz up their guests.
One thing to note about moving into elevator buildings: many NYC elevators are quite small, and are not
necessarily large enough to hold large furniture items (i.e. king-size mattresses) on moving day. And
since the whole community of the building depends on use of the elevator to get around, many elevator
buildings place restrictions on when elevators can be used for moving, such as no moving on weekends
or only with limited reservations.
If you're moving into an elevator building, be sure to confirm your moving plans with your super, and
make sure your crew knows what's up before they arrive to move you in, or you may run into unwanted
13 Questions to Ask about the Building
Are there enough elevators to accommodate the number of residents, especially during rush
hour? In a tall building, are all of the elevators “local” or is there an express option to speed
What restrictions are there on your ability to sublet the apartment? Are there any fees?
Heat and A/C
If the heat and air conditioning are centrally controlled, what time of year does the building
switch over? (You could be poaching/freezing for a long time.)
Over the past few years, the explosion of grocery delivery services, meal delivery services,
Amazon shopping and all other forms of online shopping have severely strained the ability of
even full-service doorman buildings to store and/or deliver to residents. Some have banned
certain types of delivery altogether, so be sure to inquire.
Are all of the amenities included, or are there some pay-to- play options?
Check that the property you are interested in is close to the facilities you require. For example
shops, supermarkets, laundry, pharmacy, public transport, parks, hospitals, gym, etc.
Is the board liberal or conservative? (For clues, ask to see a copy of the house rules.) A board's
personality will influence your day-to- day existence and can even affect resale values.
Flood Zone and Evacuation Zone
Post-Hurricane Sandy, it's important to be aware of your building's vulnerability to flooding.
Find out whether the building was affected by Hurricane Sandy. If it was, you and your attorney
need to make sure the damage was fixed properly, by professionals, and find out how the
building will address vulnerabilities going forward (and how much your share of that will cost).
You should also check to see if it lies in a FEMA-designated flood zone. If it is, you will need to
be prepared for the possibility of future disruption and if you are taking out a mortgage, you
may need to purchase flood insurance on your apartment, even if it's on the 15th floor.
Finally, determine whether your building lies in a NYC flood evacuation zone. There are no
insurance consequences to being inside a NYC evacuation zone, but you may be ordered to
evacuate in another severe storm.
Has the building had a bed bug problem within the past year, how was it handled, and what is
the status? Red flags include a long-term problem (6 months or longer); an infestation that is
centralized in the apartment of a 'hoarder', notoriously difficult to control or even gain access
to; a recent bed bug problem in your own unit, or any unit in an adjacent cloverleaf pattern
(above, below, beside your prospective apartment).
Even if you don’t want one now, does the building allow pets? If so, are there any restrictions on
number, breed or size? Will you need to pay a fee to keep a pet, use the service elevator or
even carry your dog through the pet?
If your apartment doesn’t already have one, may you install a washer/dryer?
What public elementary schools are in your zone, and are they considered “good”? Even if you
don’t have kids, your next buyer may care. You can investigate on websites like
InsideSchools.org and GreatSchools.org and stop by the local playground to ask a few a parents
about the schools and any scuttlebutt about future rezoning initiatives.
How is garbage disposed of—for example, can you leave it on the service stairs for pickup or do
you have to bring it down to the basement yourself?
Step 4: Find a Good Real Estate Attorney
Home buying is a complex process and even more so when it’s your first home. Each state has its own
requirements on who and what needs to be involved, and that’s exactly why you should start your
journey with a consultation with an experienced real estate lawyer.
Why do you need a real estate attorney?
Only an experienced professional, who is closely familiar with the documents involved in a home
purchase, can catch all the problems or mistakes and save you future expenses to correct them. Don’t
wait until closing to bring up issues. Work with your advisors to fix everything beforehand.
An attorney who specializes in residential real estate will review your purchase contract before you sign
it. This is especially recommended for first-time homebuyers. Excitement and anxiety tend to take over
when you buy your first house, which makes it easy to miss critical terms.
They will work with your mortgage loan officer, the home seller’s attorney and agents to make sure that
dates are set for: attorney approval, home inspection, mortgage commitment, and other contingencies.
This is critical, because many states have certain requirements and limitations on the timelines for these
events. Missing any of them could add extra fees or prevent you from backing out of a deal even if you
find something catastrophically wrong with the property.
The attorney will inspect important documents for common mistakes such as typos and misspelled
Mortgage Loan Documents
Plat of Land Survey
The legal description of the home is critical to get right, as it can impact your ability to remodel and add
improvements, and can influence your property taxes.
The bill of sale is another important part of the transaction that categorizes and inventories any
personal property, such as appliances, that are to be included as part of the deal.
They are also extremely helpful in negotiating for unpaid prorated expenses due to you from the seller,
such as: property taxes, condominium assessments, and utilities. Attorneys don’t typically counsel
homebuyers through the purchase negotiations, but you can ask yours for assistance.
What real estate attorney will do?
Help you understand the purchase contract, including how you will take title on the property.
Check that there are no covenants, easements, liens, etc. registered against the property that
will impede your use of it.
Prepare and register all the legal documents.
Clarify the terms of the mortgage and work with your bank, if necessary, to modify them.
Scrutinize the adjustments, including taxes owing and utilities costs paid, prior to the transaction
Attend the closing and review all the papers you will be required to sign.
Arrange title insurance protection to protect you from losses due to title defects.
Ensure you receive a valid registered ownership subject only to the liabilities you have accepted.
Real estate attorney fees
Costs for an attorney vary across the country, but figure up to a couple thousand dollars, depending on
the complexity of your transaction and how involved you want the attorney to be during the process.
Some attorneys charge a flat fee from contract to closing and others will charge an hourly rate, often
between $100-$300 per hour.
You control the relationship, so be upfront with any potential attorneys about how much you can afford
and what the limits are.
Request a retainer agreement
The retainer agreement outlines the attorney’s charges and responsibilities. Ask your agent to
recommend an experienced, full-time attorney who is state-licensed and specializes in residential real
estate law. Most lawyers will have a boilerplate agreement that covers the majority of the client’s
needs, but if you have special considerations be upfront so that it can be added to the agreement.
How to select your real estate attorney?
Select an attorney with whom you already have a relationship.
If you have previously used a real estate attorney to help you with a real estate transaction and
had a positive experience with that attorney, don’t hesitate hire him or her again. Since you
have already worked with this attorney before, you will have a good idea of the quality of the
legal work and understand the attorney’s process for handling your real estate closing. Plus, the
attorney may be willing to negotiate a lower fee since you are a repeat customer.
Contact the bar association in your state.
The bar association will be able to provide you with a list of attorneys in your area that
specialize in real estate law. Using the state bar as a resource has the added benefit of ensuring
that the attorney you choose is properly licensed to practice law in your location. You typically
can either call the bar association or visit their website to find such a list of attorneys.
Ask for a recommendation from friends, family members, or colleagues.
Ask people you know that have bought or sold real estate whether they would recommend the
attorney that they hired. You can even ask your real estate agent for a recommendation.
Personal recommendations are a good tool to use when selecting an attorney, because they
give you an opportunity to understand how the attorney handled your friend or family
member’s particular case.
Examine lawyer review websites.
Many resources exist online that allow clients to provide reviews of attorneys whom they have
hired to represent them in different types of legal matters. By reviewing other individuals’
experiences with a particular attorney, you can judge whether an attorney might be the right fit
for you. For an example of a popular lawyer review site, https://www.avvo.com/review-your-
Keep in mind that online reviews may not tell the whole story. If an individual is angry about the
outcome of his or her case, for instance, he or she may not totally explain the circumstances,
but may simply blame the outcome on the attorney.
Search online for local real estate lawyers. Do a simple google search or a search on a website
like lawyers.com to find attorneys in your area who handle real estate cases. This will help
ensure that you choose an attorney who actually practices in the area of real estate law.
5 questions to ask a real estate attorney
How long have you been practicing?
Before you hire an attorney, it is helpful to determine how much real-life legal experience he or
she has. If you're asking for help with something simple like a purchase agreement, maybe you
wouldn't mind having someone with one to three years of experience; but if you're dealing with
a real estate development or something complex, you probably want somebody with eight to 15
You also should ask if the attorney graduated from an accredited law school. And if the school is
out of state, find out how much of the lawyer's experience is in your state. A list of American Bar
Association-approved law schools can be found at the ABA's website.
How many cases like mine have you handled?
Ask if the attorney has dealt with transactions similar to yours. If he has, he will be better able to
foresee potential problems and head them off.
How would you handle my case?
It's not out of line to ask an attorney for a brief overview of what he plans to do on your behalf.
In fact, it can help you determine which attorneys are knowledgeable about real estate law.
Seasoned real estate attorneys will give you a rough outline of the actions that need to be
taken, such as the filing of certain documents.
How will you bill me?
Knowing the fee schedule for your attorney can help to avoid unpleasant surprises later. Most
attorneys work on an hourly basis, meaning they will charge you a certain amount for every
hour they spend working on your case. Standard hourly fees range from $150 to $200.
Who else will be working on my case?
Some law firms hand off the initial work on cases to a junior attorney, a paralegal or someone
knowledgeable about the law, but not necessarily to a licensed attorney. During your initial
consultation, ask who will do the most work on your legal matter and make sure you're
comfortable with that person before proceeding.
Step 5: Make a Successful Offer
When you see a place you like, the next step is making an offer. Offers are made orally in New York City.
Typically, the elements of an offer are
Expected closing date
The amount of the broker’s commission
The percent of the purchase price that will be financed through a mortgage
Mortgage contingency (the right to walk away with your deposit if you are unable to secure a
mortgage commitment letter) and/or a funding contingency (frees you from the contract with
your deposit if the bank fails to fund the loan for any reason except one that is your fault).
Unfortunately for buyers, sellers are unlikely to agree to any of the above unless the market is
slow or they're having trouble selling.
Included and/or excluded personal property (i.e. window treatments, lighting fixtures, etc)
Financial situation: current income, job description, net worth, and debt status
The right to take possession before closing and pay rent to the seller (less commonly)
Tips to Win a Bidding War
If you find yourself competing for an apartment, here are a few things to keep in mind:
Offer all cash if you can. In today's topsy-turvy financing world, this eliminates a major element
of risk that the transaction won't go through if you can't get financing.
Act interested. Wouldn't you rather sell your home to someone who is thrilled with it than
someone pointing out flaws or acting blasé because they think enthusiasm will compromise
their negotiating leverage?
Most people bid in round numbers. Try making an offer with an odd number, so you'll come in
just above a close offer-- like $753,000 instead of $750,000.
Put a deadline on your offer, like 48 hours, so you'll have a clear idea on when to expect a
response. Additionally, the seller may feel more compelled to take your offer.
Accommodate a seller's special needs like agreeing to a quick close, buying furniture, or letting
the seller stay in the apartment for a period of time after closing.
Step 6: Sign Contract and Make Deposit
Once you have an accepted offer in hand, it’s time for your attorney to get busy. Generally speaking, it
takes about 10 business days to go from accepted offer to signed contract.
After your lawyer concludes that the financial condition is satisfactory, that the by-laws of the building
are acceptable to you, and that the contract of sale is also acceptable, your attorney will allow you to
sign the contract. At that time you will usually be required to present a deposit of 10% of the purchase
price. The contract plus the deposit will then be forwarded to the seller for signature. This money will be
held in the seller's attorney's escrow account until closing.
It is important to note that until all parties have signed the contract, and it has been delivered, the seller
can still entertain and accept other offers. This means that until your contract is signed by both you and
the seller, your deal may not sustain as the primary deal. Therefore, instruct your attorney to proceed
Step 7: Get Mortgage Commitment Letter
Once your offer on apartment is accepted, finalize your loan application in order to obtain a loan
commitment. Your Voda Bauer agent will work with your mortgage broker/bank to coordinate the
appraisal of the property and provide the bank with requested information on the building. The loan
process typically involves several steps from application to appraisal and finally approval. This process
may take up to 45 days to complete and hinges on your ability to provide all of the required financial
data to your broker/banker in a timely manner.
Step 8: Get Board Approval
While awaiting your mortgage commitment, work with your Voda Bauer broker to complete your board
package. Whether you’re buying a co-op or a condo resale, your purchase usually must be approved by
the building's board. This involves submitting an invasive, much bemoaned application package
assembled by you and your broker. A typical board package requires at the minimum the following:
Personal and business recommendation letters
Financial statements and supportive documents
Your Voda Bauer agent will help you complete the package and deliver to the managing agent for initial
review. Upon determination that it is complete and that credit checks were acceptable, it will be
forwarded to the Board of Directors for final review.
Condos may make you work just as hard as a co-op, but basically have to accept you, unless they
exercise their right of first refusal and buy the apartment out from under you. This almost never
happens. And in new construction, there is not even an application package.
Most Often Asked Questions by Co-op Boards
Often if a Board has questions relating to financials they will ask them before the
interview, but be prepared for the meeting. Take a copy of the package with you.
You will be asked for detailed explanations of financials, especially if self-employed.
Do you feel confident that you can comfortably carry the mortgage and maintenance?
Feel Good Questions
Why did you choose this building?
What made you choose this apartment?
Why do you want to live in this neighborhood?
How long have you been looking? How many apartments did you look at?
House Rules, etc. (You will be asked questions designed to see if you’ve read the house rules and
will abide by them.)
Do you have any questions about this building?
Do you have any pets?
What kind of renovations will you be doing? How will you finance this renovation?
Are you going to use the apartment for residential purposes only?
Do you work out of home? What kind of traffic will there be? (Security)
Would you run for the Board? What skills could you offer?
Do you play any musical instruments?
Do you entertain often?
Do you smoke?
Board Interview Tips
No two interviews are alike! Some Boards meet prospective buyers only after they have decided
favorably on their application, others use the interview as the time to scrutinize both the financials and
the candidates. As your real estate professional we have, from years of experience, created this list of
“hints” to help you face your interview.
Dress conservatively. Suit and tie for men. Suit and minimal jewelry for women.
Be on time, If not early. Let them be late! Often you are part of a larger agenda of the whole
board and the interview is delayed. Be patient.
Be prepared for personal questions. Handle them without being defensive. They just want to
be comfortable that you’ll be a great neighbor.
Have a copy of your application with you and be familiar enough with it to quickly and concisely
answer questions about it without looking (shuffling through papers gives a bad impression).
Specifically your financial statement. And be prepared to answer any questions concerning your
Couples should decide in advance who will answer certain types of questions (for example, one
spouse answers all the financial questions, and the other handles the rest).
Discuss “all issues” before you arrive. If two or more people are being interviewed – Don’t
contradict or interrupt one another.
Don’t ask questions. For example, especially ones that should have been answered prior to your
signing a contract such as building repairs, financials, etc. This is your interview, not theirs.
Don’t answer any questions you’re not asked.
Don’t discuss renovations. Unless asked, and then downplay the extent of the work you intend
Don’t offer any personal information. That is not requested.
Don’t expect a decision on the spot. More often than not, a review by the full Board must be
Post interview requests. In some instances, the approval might be contingent upon
maintenance being held in an escrow account.
After the interview, the managing agent will contact you or your agent with the Board’s
decision. In some cases this may take up to a week or longer.
Enjoy it. Be relaxed and confident. Who knows? Someday it may be your job to interview the
Step 9: Inspection
Upon board approval, notify your attorney who in turn will coordinate the closing date. The day before
or the morning of the closing (but usually after the seller has vacated), your Agent will accompany you
on an appointment to inspect that the property is in the same condition or promised condition as stated
in the contract. Be sure to check appliances and the removal of personal property, and that the premises
are broom clean.
Step 10: The Closing
The closing will be attended by attorneys for you and the seller, a title company representative, a
managing agent if it’s a co-op and probably the brokers for both sides, who have no official function but
come to network and pick up their commission checks. While buyers and sellers are usually there, they
can elect to skip it and hand power of attorney to their lawyer.
Arrive with your ID and your checkbook, to cover any minor last-minute ‘adjustments’ that spring up.
You may also need to provide proof of apartment insurance.
Ideally, your closing will last one to two hours, though any number of things like problems with the walk-
through, tardy transfers of loan funds, and tardy arrivals of humans can slow things to a crawl.
Eventually, you will walk out with a signed purchase agreement, keys and a great new place to rest your
head at night.