Home Buying in Rego Park>Question Details

Blind Buyer, Home Buyer in Rego Park, Queens, NY

is it smart to buy a Coop with all cash payment?

Asked by Blind Buyer, Rego Park, Queens, NY Mon Aug 30, 2010

Since most of the Coops have somewhat high monthly maint exps of $500-$800, i dont want to have some extra hundreds of dollars of mortgage exps on top of that other utilities not included in the maintenance. So i want to ask for some money from my parents to buy a Coop in Rego Park with all cash payment. Do you guys think it is smart to do so as far as return on investment and opportunity cost is concerned? Thank you!

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Annette Levinson’s answer
If you fell that maintenance is high at $500-$800 you should consider what you are paying for rent. Your monthly expenses in owning a coop should be the same as your rent in order to save money monthly. Since you are able to deduct mortgage interest on your mortgage and the buildings plus your share of the real estate tax on the building, you will be saving money on your income taxes.
If you ask your parents for the money, most boards will require a gift letter. Are your parents willing to say that the moeny is a gift. How will your siblings feel about this?
1 vote Thank Flag Link Tue Aug 31, 2010
To pay cash or with a loan is a financial decision only you can make--what does your tax professional suggest--what would be most beneficial to you.
1 vote Thank Flag Link Tue Aug 31, 2010
Dear Blind Buyer,

To add to Ralph's comments, I would also suggest that you discuss this with your accountant or tax professional, to fully understand the tax benefits for your specific situation. I do understand your position on not wanting the additional burden of paying a mortgage and also the monthly maitainence. If you decide to purchase a Coop all cash, you will still get to deduct a portion on your maintainence (apprx. 30% - 50%). You should also hire a buyers agent to represent you (it does not cost you anything) and you have a professional that can advise you in terms of offers and recent sales / listings.

If you have any additional question, please give me a call.

Good luck on your home search.

Nirmala Caraballo
Licensed Real Estate Agent
Cruse Realty
Tel.: 646-479-7873
Email: nhcaraballo@yahoo.com
1 vote Thank Flag Link Tue Aug 31, 2010
By making an all cash buyer, you eliminate the pressures of paying a mortgage, it makes teh property more affordable on a monthly level to pay teh taxes, hoa fees and utilities. If you are able to do so, it is usually the best way to purchase.
1 vote Thank Flag Link Tue Aug 31, 2010
When making any real estate purchase, you have to evaluate your long and short term goals. By making an all cash purchase, of course you reduce your monthly costs but you also reduce the tax benefits of having a mortgage. Of course, in the alternative, in real estate, cash is king and will give you much stronger buying and negotiating power. With an all cash deal, the seller does not have the additional concern of appraisals, waiting for loan approval and you could close as soon as you get board approval. You have to evaluate it for your own situation. I would be happy to discuss this with you further and, if you're not already working with a buyer's agent, explain the benefits of using one instead of going to each individual listing agent on any particular property. Good luck!

Ralph Windschuh
Certified Buyer Representative
Senior Real Estate Specialist
Associate Broker
Century 21 Princeton Properties
In The Top 2% of Century 21 Agents Nationwide!
1 vote Thank Flag Link Tue Aug 31, 2010
Hi BB. I see no problem with a cash purchase. It will save a lot of time, paperwork and additional fees that you will certainly incur with a bank or mortgage consultant. As long a your debt to income ratio is low and you have work with steady income, it should work out easily.

You will need the services of an Attorney in New York to purchase real estate. Get referrals from friends, neighbors, family and Realtors and their sites. The process could close after accepted offer within 30 days or so. I do also agree that you should have the property appraised before signing any contract of sale. This is standard with a financed loan but not mandatory for a cash sale. I'm sure your Attorney would insist on it so, do it anyway as a safeguard.

Even though the real estate market is showing current signs of good stabilization in prices, it may be a few years before you see any real appreciation. The best bet may be to buy in now, get a best price and consider any appreciated value of a longer period of time. You'll never have a mortgage hanging over your head.

If you need the services of a real estate professional, please feel to contact me.

Best to you.

Joseph C. Hastings
Cell: 1-917-579-1502
Prudenatil Douglas Elliman real estate.
0 votes Thank Flag Link Tue Sep 7, 2010
I apologise in advance for disagreeing with Ralph. I absolutely recommend an appraisal on any property or land purchase whether it is paid in cash or not.
0 votes Thank Flag Link Wed Sep 1, 2010
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