In NYC cash is King. Today more so than ever. Many NYC coops and condos are facing financing difficulties these days. There will be many more obstacles in the coming months. Unfortunately many buildings that have never had problems before now are.
We can thank Florida, Arizona, California, Nevada and the rest of the country for all the new rules and guidlines that are now affecting us here in NYC even though we have a strong housing market. New York was the state with the highest level of home price appreciation in the country.
New York City entered a national recession later than the rest of the country and now, we have come out of it faster and stronger than the rest of the country. Our housing market declined because of Lehman Bros the rest of the country declined or crashed because of over building, sprawl, sub prime mortgages, unqualified buyers getting mortgages and a foreclosure crises. The opposite of Manhattan where a buyer always had to be qualified. Even renting in Manhattan requires a documented income of 40x the monthly rent.
So now such NYC building practices like restrictive covenants, flip taxes, first right of refusal, an individual or entity "sponsor" owning too many units, line items, fidelity bonds etc. not to mention the buyer's qualifications have become new financing obstacles in NYC by Mannie Mae and Freddie Mac.
For a seller cash is always better. Lenders are no longer reliable. A buyer with a financing contingency can eaily walk or back out leaving the seller "holding the bag" On the other hand a cash buyer or buyer with out a mortgage contingency will lose their deposit if they change their mind.
Fortunately for Manhattan 50% of transactions are cash sales. Cash is King but an experienced buyer's broker will know how to leverage a Cash offer.
Mitchell Hall, Associate Broker
The Corcoran Group