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10468 : Real Estate Advice

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  • Home Buying9
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Activity 13
Mon Jul 3, 2017
Kathy Burgreen answered:
Co-op - you own shares of stock in a limited housing corporation that gives you a proprietary lease to live in a specific unit (apartment) for as long as you want. In addition to the monthly mortgage loan to your lender, you will pay a monthly maintenance fee (like rent) that is approximately 75% maintenance fee + 25% property taxes. In the nearby suburbs (Westchester & Nassau Counties), the split is generally 50% maintenance + 50% property taxes. In NYC, maintenance costs are much higher and property taxes are low. In Westchester, maintenance is low and property taxes are high.
Co-op apartments do increase in value every year because it provides an alternative to the expensive condos and houses for sale. To purchase a co-op, you will need to pay a down payment + closing costs. You will also need to be approved by the co=op Board of Directors. Co-op Boards cannot discriminate and typically just verify that you have the ability to pay the maintenance fee on time every month (like paying rent). In NYC, the typical down payment is 20 - 30%. In nearby Westchester, the typical down payment is 10%. It is easy to sell co-ops because there is a large number of buyers who are interested in buying a co-op.

Condo - you are buying the unit (apartment) itself and you get a title or deed for that unit. Because you are buying real estate and not shares of a housing stock, condo prices are typically more expensive than co-op prices. The average condo is $100K or higher than it is for the same exact size co-op apartment. When buying a condo, you also have a monthly maintenance fee (called an HOA - homeowners association) that is paid monthly + you will pay property taxes separately. If you add the monthly HOA fee + the property taxes (divide by 12 months) the monthly cost is about the same as the monthly co-op maintenance fee, so you are not saving any money with a condo. Remember in NYC, the condo's HOA fee will be high because that is your maintenance charge and the property taxes will be low. In nearby Westchester, the opposite is true - maintenance is cheaper and property taxes are higher. When buying a condo, the Board of Directors does not approve you but they will want to verify you can afford the monthly HOA fee.

One huge difference you need to be aware of. In the suburbs, the apartments have more living space (square footage) than the typical co-op or condo in NYC does. Yes, I know co-ops and condos in NYC are tiny unless you have a million dollars to afford the normal size apartments.

Bottom line - BEFORE you look at any coops or condos, you need to have a lender pre approve you for a loan. NO real estate agent will show you anything without a pre approval. Whether you buy a coop or condo will depend on how much of a loan your lender will approve you for. Typical prices for a 2 bedroom coop in Westchester - $200 - 400,000. depending on neighborhood / town. A 2 bedroom condo in Westchester averages $400 - 700,000. depending on neighborhood / town. In Riverdale (Bronx) and other NYC neighborhoods, prices are higher because you're in NYC. Therefore, a 2 bedroom co-op averages $400 - 700K depending on location and a 2 bedroom condo averages $600K - $1 million+.

Hope this helps. I'm a life long NYC area resident and retired realtor. I lived in the Bronx (Pelham Parkway) and my husband taught at DeWitt Clinton High School, so I know Riverdale well.
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Sun Mar 20, 2016
Kathy Burgreen answered:
I'm a former realtor and you need to follow these steps:

1. Contact a local mortgage lender. Start with your bank and ask them for their loan officer. You need to ask for a pre approval. This requires the lender to verify your employment, salary history, credit score, credit history, types of outstanding debts, savings or investments, tax returns, etc.

2. The lender will give you a pre approval letter (if you qualify) and now take this letter to a realtor who can help you find a co-op or condo. Based on what loan amount you qualify for, this will determine if you can buy a co-op or a condo.

3. Understand the differences between co-ops and condos:
Co-ops - you are buying shares of a limited housing corporation that gives you "ownership" rights to occupy a specific apartment until you sell it. You will be responsible to pay a monthly maintenance fee. This fee combines the property taxes + the maintenance for the building. Usually it's split 50-50 but this can vary. As a shareholder you are legally entitled to deduct the property tax portion on your income tax return just like owners that have a single family house. You will also deduct the interest portion of your mortgage. Co-ops are managed by a Property Management company but are run by a Board of Directors which are residents of the building who are elected by the residents every year. Once you find a co-op apartment that you put an offer on, you will be required to submit an application to the Board of Directors for approval. Understand the Board of Directors is only interested whether you can afford the mortgage + the maintenance fee + your other fixed expenses (outstanding debts). The lender is only interested in whether you can afford the mortgage - not the maintenance fee.

Condos - you are buying the apartment outright and will receive the deed or title to that apartment. You will be required to pay a monthly HOA fee which is for maintenance of the condo only. You will be required to pay your property taxes separately. As a guideline, if you divide the property taxes by 12 months and add the maintenance fee, you will see it equals the same amount as a co-op's monthly maintenance fee. Therefore, don't think a co-op's maintenance fee is higher than a condo. Just like a co-op, the building is managed by a Property Management company and run by a Homeowners Association which is residents living in the condo and elected every year.

4. Remember the following:
a) co-ops are much cheaper than condos because of the legal structure of ownership. Co-ops means you are a shareholder; condos means you are an owner.
b) condos average about $100,000. more than a co-op. Some condos are even $200,000. more than co-ops. Which one to buy will depend on your pre approval letter and how much of a mortgage you are entitled to.
c) Down Payments - co-ops require a minimum of 10% down payment. Some co-ops require 20% down payments. Co-ops are not eligible for FHA financing. Condos are eligible for FHA financing BUT most sellers in the NYC area expect buyers to have 10% down paynents. Even if you have 3% down payment with FHA financing, the asking price for a condo is still a lot more than a co-op and you won't qualify for a loan.
d) Carefully review the finances of co-ops and condos. Remember they are run by the residents and the residents may not be good with watching the budget.

Hope this helps.
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Tue Jul 8, 2014
marikany asked:
Add some detail about your question
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Sun Mar 16, 2014
Hi Tanya,

All the information listed before is correct but you may run into an issue. I have lived and worked in the Bronx my entire life and there is issue with most of the condos here. There are very few FHA approved condos here and depending what area you are looking some buildings are having issues with their financials which means most lenders will not be able to finance a borrower, forcing certain people to purchase in cash. Your best option would be to do some research on a lower priced co-op and improve your credit score to over 680. I can assist with structuring your future purchase and give you some insight information on how to boost your credit score. My office is in a convenient location so please give me a call when you are available to come in.



Timothy J. Colon
NMLS #964986
Mortgage Banker
United Northern Mortgage
2105 Williamsbridge Road 2nd Floor
Bronx, NY 10461
Phone 646-549-9476
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Mon Mar 3, 2014
Good morning Tanyadunham13,

We see many credit reports with low credit scores (anything less than 620), and often many scores in the 500's. This is BAD credit. If you are one of the folks affected by this terrible economy, you have a low credit score and you have a dream of buying a home, here's some simple advice for you.

It is unlikely you could be approved for mortgage financing with that credit score at this time.

Beware of any mortgage professionals promising you an approval with such a low score. Wait on buying a home. I recommend you take the time to resolve your credit issues.

First, settle any outstanding debt. If you owe money on collection accounts, charge-offs and/or judgments, make payment arrangements and get these accounts paid promptly.

Next, begin rebuilding your credit. If you have current accounts with good payment histories, or even some previous late-payment-blemishes, make sure you continue to pay those accounts on time. If you do not have any existing credit accounts then you'll need to establish several in order to create a viable credit history.

I have found that CONSUMER ACTION is an excellent resource for objective advice on all things credit related. You'll find free and sincere advice on everything from settling collection accounts to rebuilding credit to building credit from scratch on their website.

Beware of anyone offering to "repair" your credit! The Federal Trade Commission issued a stern warning last year that such offers are scams. Find more from the FTC HERE.

The best way to buy a home is to have a decent credit history combined with sufficient Income and Assets for a home purchase.

The best way to have a decent credit history is to settle negative outstanding obligations and pay all your bills on time for at least two years.

Trevor Curran
NMLS #40140
Mobile: 516-582-9181
Office: 516-829-2900
Fax: 516-829-2944
PowerHouse Solutions, Inc.
1010 Northern Blvd. Suite 234
Great Neck NY 11021
Licensed Mortgage Banker – NYS Dept. of Financial Services

*If you thought my answer was helpful, please give me a “Thumbs Up” or “Best Answer.” Thanks!
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Thu Nov 21, 2013
Cave Johnson Company Pegram answered:
The one shot, is typically to pay for the arrears( by the city of NY) , for the apartment that you are in and facing eviction. So is this for your next move? Are you satisfying your current rent situation? Has your personal income situation changed or will change? ... more
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Tue Aug 6, 2013
David Rodriguez answered:
When are you free?

David Rodriguez
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Tue Jun 25, 2013
William Brown answered:
Hey Now;
Because the loan on the building is high........That's why in a nut shell.......
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Sat Mar 23, 2013
JOE Chiariello answered:
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Tue Mar 12, 2013
Mildred Valentin answered:

It all depends, all Co-ops vary in Monthly Maintenance fees the bigger the unit is in square footage the more your likely to pay! Call me direct at 646-957-4648. If you have any address I can do some research for you. I also work with buyers and can assist you with your purchase.

Example I have several in contract in Parkchester and the monthly maintenance is over $ 600.00

Best of Luck!

Millie Valentin
Certified Buyers Representative
Exit Realty Search
3928 E. Tremont Avenue
Bronx, NY 10465
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Tue Mar 12, 2013
John Lajara answered:
Hi Rasheem,

As mentioned below, the price of the coop has nothing to do with the maintenance. The maintenance depends on the financial of the building. It also depends on the features of the apartment, amenities and how many share it comes with. Is there a specific unit you want info on?

John Lajara
REALTOR®/Notary Public
Certified Buyer Representative (CBR)
Cell: 917-848-4655
Fax: 917-522-9638
EXIT REALTY SEARCH | 3928 E. Tremont Ave | Bronx | NY | 10465

Visit me on Trulia & Zillow
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