FAQ - Buying Luxury Lofts or Apartments
What is a "Mortgage Contingency Clause"?
This is a clause in a sales contract that say basically if you can't attain a Mortgage, your earnest money deposit (10% down payment upon signing the contract) will be returned to you. If you waive this clause in the contract, as is frequently done in a seller's market, you will lose your 10% earnest money deposit if you fail to attain a mortgage. Always get pre-approved for a mortgage to diminish your risk. (Generally the clause in the contract is for 30 - 45 days for the buyer to obtain a commitment for a mortgage.)
Why would someone waive a Mortgage Contingency Clause?
This is done in a seller's market, especially when there are multiple bids, to increase your chances of getting the space. You become more attractive to the seller because no matter what happens the seller will come out with something. If you get the mortgage then the sale will continue and the seller is happy and if you don't get the mortgage, the seller gets your 10% earnest money deposit and is very happy. With multiple offers, someone will inevitably waive this clause to try to get a competitive advantage. The risk in this type of move is limited providing you're pre-approved and know you can get a mortgage. A good idea is to develop a relationship with a solid mortgage contact.
What do they mean by 80/20 Rule?
The 80/20 rule says that not more than 20% of a co-op's revenues come from commercial spaces. If more than 20% the maintenance is not tax deductable. (Note: On December 20, 2007 the Mortgage Forgiveness Debt Relief Act of 2007 offered some adjustments to this rule.)
What is the deductable portion of the maintenance represent (co-op)?
They typically represent mortgage interest and real estate taxes.
What is a cond-op?
By definition, a Cond-op is a residential Cooperative where the ground floor (typically commercial units) is converted into a separate "condominium" which is either owned by an outside investor or the original sponsor of the building. The residential units are a coop, the commercial units are owned as a condominium by an entity other than the coop (more info: Luxury Lofts & Apartments (Co-op, Condo) & Townhouses).
What is a co-op?
It is a form of ownership where you own shares in a corporation when you purchase an apartment and you pay a monthly maintenance fee with a tax deductible portion. The majority of Manhattan's apartment inventory is co-ops and to purchase you need to submit an extensive package & pass a board interview (for more info: Luxury Lofts & Apartments (Co-op, Condo) & Townhouses).
What is a condo?
It is a form of ownership where you receive fee simple ownership to the property and have more flexible rules of usage. Common charges and taxes are separately billed unlike a co-op (more info: Luxury Lofts & Apartments (Co-op, Condo) & Townhouses).
What is an Aztec Recognition Agreement?
This a document the bank draws up to give their lien first priority ove the co-op's lien in case of the shareholder's (you) default.
What is a UCC-1 and UCC-3?
The UCC-1 is filed by the bank when a loan is initiated while the UCC-3 is filed after the satisfactory payment of the loan.
What is a Land Lease?
This is when a building leases the land that it utilizes. Generally the maintenance (co-ops) or common charges & real estate taxes are very high and obtaining a loan on this type of property can be difficult. Investigation of the terms and length of the land lease is important to your purchase decision.
What is a Sponsor Unit?
When an owner converts a building to co-op or condo from a rental or builds a new building to sell, they become the sponsor of the building. When buying a sponsor unit in a co-op, there is "No Board Approval" in order to purchase the unit. When buying from a sponsor you will usually be responsible for paying the NYC and New York transfer taxes, 1.825%, and covering the sponsor's legal fees (there can be other charges).
When does an offer become "firm"?
Only when both the buyer and seller sign the contract does a deal become firm. If only one party has signed the contract and a better offer comes in or someone changes their mind, there is no recourse if the deal is dropped.
How do Real Estate attorneys charge?
They either charge on an hourly basis or a flat fee.
Is appraised value the same as market value?
These two values can differ significantly. Appraised value is derived by the bank in terms of lending while market value is what consumers are willing to pay for a property.
Pre-Qualified vs. Pre-Approved for a mortgage?
Pre-approved is the most important because it shows that a mortgage professional has went in depth into a buyer's finances to determine their ability to receive a mortgage.
What is a buyer's broker?
A Buyer's broker is someone who contractually works for the buyer and owes the buyer his fiduciary duties.
FAQ - Selling Luxury Lofts or Apartments
What is an Exclusive Listing?
This is a listing where you employ an agency & agent to market your home and become your point person on the sale. Unlike the term exclusive, the listing is marketed to all brokers and the general public to achieve maximum results.
What is an Open Listing?
This is a listing for sale by an owner with no affiliation or agreement to a sole agency for marketing the property. Many different agencies can market (if approved by the owner) or bring buyers to the properties (with owners consent).
How do you qualify a buyer's offer?
We utilize Real Estate Board of New York (REBNY) financial and offer forms to determine the level of qualification of offers and look at their mortgage pre-approval terms.
How do showings work?
All showings are staffed by Demsker Realty and at no time is any one in your unit without an escort. We do not leave keys with the doorman for showing a unit because it is important to the marketing and security of your home for a licensed agent to be there.
Is there an MLS in New York City (NYC)?
Currently there is not an MLS in New York City (NYC). We do utilize other websites that act in the way of a traditional MLS so to get your home the greatest qualified exposure.
What if I want to take my home off the market after listing?
By providing flexible listing terms to meet your needs, all you would need to do is to speak to an agent at Demsker Realty to have your property removed from the marketplace. Stress free listing agreements.
How long does it generally take to sell a home?
Each home is different and proper pricing is very important. Generally it takes approx. 3 months with variances for co-ops vs. condos.
Do I need to do anything before listing?
Get rid of clutter, fix anything broken and create a shiny look to all areas of your home. This will help the selling process and allow you to maximize your returns on the sale.
Is it better to use a big or small firm?
With the internet coming of age in real estate, the exposure advantage of big brokerages has dissipated and now boutique companies can provide the same exposure while maximizing customer service. Plus without all the red tape boutique companies, like Demsker Realty, can offer more flexibility to respond to your wants and needs.
How does Demsker Realty obtain maximum exposure for my property?
We use multiple streams of marketing from the web to direct mail. We only use the highest quality materials and maintain the highest focus on website marketing by utilizing multiple sites generating over 10 million visitors per month. We utilize the Omni Feed and List Hub to cover the web with your home with access to hundreds of sites.
FAQ - NYC Real Estate
What is the background of the Principal of Demsker Realty?
I have started Demsker Realty after over ten (10) years of working for the top New York City (NYC) Real Estate Firms, like Prudential Douglas Elliman & William B. May, and consistently exceeding people?s expectations. Selling and renting NYC luxury lofts and apartments throughout New York City (NYC), Brooklyn and Long Island City (LIC) has provided me with extensive knowledge and ability to exceed your wants. I hold a B.S. in Marketing from Virginia Tech and have had my broker?s license since 2004.
How is Demsker realty Different?
We offer the Un-Broker advantage which is the most comprehensive customer service application in the market and combine that with Mastermind Marketing which provides for multiple streams of exposure to generate the highest return on your apartment or loft sale. We have analyzed the Real Estate process and improved it at every step.
If you have a question Email us.