New York Real Estate
by Highline Residential
Remember this chart from macroeconomics? The details don't matter. The key is the conclusion. When a tax is assessed, the buyer pays a higher price, the seller receives a lower revenue, both relative to equilibrium. Both the buyer and the seller end up incurring a portion of this cost, irrespective of who pays the government. What portion each party incurs depends on something else you might remember called elasticity. Let us consider this first-year economics theory in light of the recent "Broker Fee Ban." Who pays broker fees? Is it the landlord? Is it the tenant? Does it matter who writes out the check to the broker at closing? For those that are not aware, here is a quick primer on recent events: 1/31/20: The Department of State issues guidance stating that a Landlord's Agent (an agent representing the interests of the landlord) can no longer collect a broker fee from a tenant. A Landlord's Agent can still collect a fee from the landlord, and a Tenant's Agent can still collect a fee from tenants. 2/5/20: Even though the focus of the guidance is narrow, multiple publications pick up on this guidance and lead with headlines reading "Broker Fees are Banned in NYC", leading to tenant, landlord, and broker confusion. 2/10/20: After a lawsuit is brought on by various real estate groups, a judge issues a temporary restraining order on this guidance, bringing us back to square one, for now. Why do broker fees exist? When a landlord has a vacancy in their ...
by Steve Ragan
One question I am often asked is "What type of apartment should I purchase, a co-op or a condo?" The answer is "It depends". It depends on you, your future plans and real estate goals. Questions you should consider are: Will you reside in the apartment or is it an investment? How long do you plan on staying there? If you move out, do you plan on renting the apartment? Do you plan on financing the purchase? How much can you afford to finance? How much do you have for a down payment? Do you want to have input into how the building is managed? Cooperative and condominium buildings each come with their own pros, cons and unique purchasing requirements. Understanding the differences between the two can help guide you to the right decision. First, there are significantly more co-ops than condos in New York City. The greater supply of co-ops vs. condos is one of the reasons why co-ops are less expensive than condos. As of 2019, available apartment inventory in New York City is roughly 75% co-op and 25% condo. New condo construction in recent years has increased the number of available condo units. Likewise, their percentage of the available apartment inventory in New York City has and should continue to rise. The key points below highlight differences between co-ops and condos. In a co-op: ● A corporation owns the property. ● Tenant-shareholders own stock in the corporation, with a landlord-tenant relationship between the corporation and the shareholders. ● The corp...
by Highline Residential
Roughly 37 percent of the average American's budget is put toward their home. It's a lifelong investment that will take most people between 15 and 30 years to pay off. If the cost of homes in your target area is above your current budget, then you might want to consider purchasing a home that's in need of some work. Most people pay will pay through the nose in order to get a pristine house with no issues whatsoever. You can get around this industry standard and make away with a steal by investing in a property that doesn't meet this perfection requirement. So, here are some tips for those buying a home that needs work. Calculate Before You Buy With any major investment, it's important to do some calculations beforehand to ensure the return is worthwhile. When it comes to purchasing a home in need of repair, you should determine whether the cost of renovations will end up being more expensive than purchasing a brand-new property. Start by adding up the overall cost of repairs needed on your prospective house. Once you find the listing price of a similar home that is in perfect condition, subtract the total repair expenses to see how much money you're saving. Add a Garage or External Structure If you found a great deal on a home but aren't happy about the limited space, you can always add a garage or external structure for additional square feet. Whatever can't fit in the main part of your house can be placed into this extra space. Not only will this addit...
by Stacey Max
Yes, it's true. New York State has instituted increases to the New York State Transfer Tax as well as the "Mansion Tax." First, let's remember that these increases are a much-needed revenue-raising mechanism for the Metropolitan Transportation Authority. Second, legislators originally considered a pied-a-terre tax, which would have affected anyone who owns an apartment in New York City but has their primary residence somewhere else. Fortunately, they decided against that and the real estate industry was pleased; because we don't want to discourage people from buying second homes in NYC. While the New York State Transfer Tax applies to all sellers of real estate and cooperative apartments in New York State, the increases recently instituted only apply to transfers within New York City (or any other cities within New York State with populations of 1 million or more). The Additional New York State Transfer Tax, which is known as the "Mansion Tax," applies to purchasers of real estate and cooperative apartments with a sale price of $1 million or more, on a sliding scale. I can't wait to see what the MTA does with the money to make our lives better! Please use Highline Residential's CLOSING COST CALCULATOR to easily estimate what your closing costs will be on your transaction! See you at the closing! Posted by Highline Residential's Sales Manager, Stacey Max. Find Stacey on Facebook.