What is it like to buy a co-op on the Upper Westside in NYC?

Co-op Board Process

In this post, we will discuss the Co-op Board process for a typical upper west side building on Manhattan’s upper west side. When you have already found an apartment and are in contract, you will begin two processes- your loan application and your co-op application. We will give an overview of the 2nd process.

You will prepare documents to submit to the Building’s management. This will include reference letters-both personal and professional as well as a financial statement with supporting documents, many disclosures, and even a landlord or management reference letter. Once you have prepared these documents, they will be uploaded to a portal or if the management is still in love with paper, you will be dealing with paper.

When you have everything prepared you can submit it to your real estate broker who will review it and help to present it in the best possible light. The seller’s broker as per protocol will review as well and make suggestions to your real estate broker.

In NYC co-ops, management will review the submitted package and then will request clarifications or missing documents. This process of management review for a co-op will likely take about 2 weeks depending on the building. Then it goest to the Board of Directors.

On the Upper West Side, it depends on the building as to what will be evaluated by the Board. Is the building a small, non-doorman building or a historic, architecturally significant residence on Central Park West? Some buildings will be flexible with the usual guidelines and some will be more rigid. Speak to your Broker prior to submitting an offer to understand the guidelines. In general, Boards in cooperatives would like to see 20-25% down payment, 28% Debt to income ratio, and 2 years of post-closing reserves. Long term debt like cars or student loans will be factored in. If your monthly mortgage and maintenance is projected to be $5000 then showing $120,000 in your Chase account after allocating your down payment will be ideal.

Advanced tips
Pay off your credit card debt
If you are short on Post-closing reserves, ask Mom or Dad for a gift to cover those reserves. You can return the money after closing.
Reference letters should be from people that know you very well and should speak about how they know you and why you would be an ideal addition to your prospective co-op
Get your Board application in as soon as possible especially if you are trying to move by a certain time as in when your NYC lease expires.

Hopefully, the Board will then ask you to come in for an interview. In most cases, you are probably on your way to becoming a shareholder. But still treat it like a professional interview and do not offer more information than you are asked.
In the case where you are turned down, unfortunately, there is not too much you can do but little known fact, you can re-submit your application especially if you can get some intel as to why the rejection.

Buying an Upper West Side cooperatives can be a challenge especially when inventory is low, but putting together a good Co-op Board application can really help you to increase your odds of approval. Be patient with the process and you will make it through.

About the Author
Brian Silvestry is a licensed real estate broker on Manhattan’s Upper West Side. He has been licensed since 1999 and lives on the Upper West side since 2004.

Commercial real estate update

This is an excerpt from my interview with Seth Kessler who is a commercial real estate broker with SCG Retail.

Brian:       So I’d like to dive right in.  One of the things that I’ve been talking about here is the current residential real estate market and what we’ve been seeing.  I’ve had some guests here with me and just talking about that.  Love to hear like, you as a commercial real estate expert, what are you seeing in areas that you focus in on right now?

Seth:        Obviously over the past I guess it’s been almost 2 months or maybe even a little bit longer that we’ve all been in lock down, in quarantine.  From really the first week we just heard most retailers say that they’re just putting all expansion plans on hold until this pandemic, quarantine life, gets back to normal.  Not much has changed in that front.  A lot of conversations have shifted from we’re putting things on hold to now they’re trying to figure out how they are going to reopen. How these tenants – restaurants, the hair salons, the spas things like that where there’s more physical contact- of how they’re going to reopen.  What their reopening strategies going to be.  They’ve even gone more so from putting things on hold to we need to figure out how we’re going to get back to life in the near future.  Whether that’s the next 6 months, a year or two years.  So, it really has transitioned but that has been the conversations.  That’s actually coming from the tenants’ standpoint.  The landlords have been talking all over the board.  I’ve heard some landlords saying ‘Look, the rent’s due. We need our rent for the past 2 months’ which I don’t agree with those landlords.  Then a lot of my clients have been saying ‘Look, we know where this is going. We need to work with our tenants. The rent is due but we need to figure out a way where they’re going to stay in business so they can continue to fill our spaces’.  It’s a partnership.  Most of my landlords, my clients that I do repeat business with, have been saying ‘We need to figure out how to keep our tenants in business’.  And some of them have unfortunately already given the keys back and said ‘Look, they can’t fulfill their responsibilities.  Some tenants that weren’t making money or weren’t making much money are taking this as the time to kind of trim the fat and say ‘Look, we’re dead in the water now and we aren’t going to bounce back from this’.  That’s been some of the more recent conversations that I’ve been having on a daily basis with tenants and landlords. 

Brian:       The landlords were, for the most part, they’re for putting rent off and allowing the tenants some time?  How does that work in terms of what will be the plans for, let’s say, a restaurant?  If they don’t pay the rent for a couple of months do, they have to – is it 2 months or is it 6 months?  How do they pay back those arrears?  How does that all wash out?   

Seth:      Each tenant, each landlord handles each deal differently but what I’ve been seeing and hearing that a lot of tenants are going to do, they’re deferring the rent for later in the lease.  Some of them are saying ‘Look, if it’s 3 months then every month for the length of the lease will be a little bit increased to make up those 3 months’.  Some landlords are saying ‘Were going to defer payment all the way until the end of the lease’.  So, if it’s 3 months deferred now, they will extend their lease by 3 months.  The only catch with that is it would be at then escalated rent so the landlord gets a little bit more at the end of the lease.  The landlord risk’s is if the tenant doesn’t make it for that new part of the lease but it’s a risk that some landlords are willing to take and some tenants are also willing to take that as well.  Something that I’ve heard and I haven’t seen it much around New York but in some of the other markets, landlords are saying ‘Look, we will extend if it’s 3 months deferred, right now we’ll extend your lease by 6 months or another year’ so there’s a little bit more upside for the landlord for not making the money now but they’re going to get a tenant for a little bit longer.  I’ve heard some landlords doing that in other states and other markets.  Mostly in New York, I’ve heard a lot of like one for one, months deferred now till the end of the lease.  It helps the tenants out a lot because they don’t have to worry about the payments now.  They will have to worry about them in the future but hopefully they’ll have cash flow and enough money that they’ll be able to afford to pay for those rents to stay in business.

Wills,Estates and trusts part 2

This is the continuation of my interview with James Striar, a real estate attorney that specializes in wills, estates and trusts.

Brian: What things do you usually see that might be left out of a will or do you ever see any cases where a will was maybe prepared by someone other than yourself, that doesn’t specialize in this area of practice, and maybe leads to issues later?
James: A couple of things, one is that somebody may forget to name a specific bank account if they wanted to go to one particular person and obviously that account doesn’t already have a designated beneficiary on it. Probably the wills that I see that haven’t been necessarily prepared by an attorney are the online wills. It could be legal zoom, a variety of different online platforms that are fairly generic. They definitely fit for certain situations where it’s a very basic will but sometimes they can lead to more issues or possibility of a will contest if they haven’t been comprehensibly completed. Also, the execution of the will under New York state law, the will has to be witnessed by two people. There’s a very specific protocol that has to be met in order for the will to be probatable in Surrogate’s Court after the person passes away.

Brian: Interesting. Just as an aside, how often do you see people that come to you and they’re coming to probate an estate and there was no will.

James: I see that a lot. It’s probably more often that there is not a will than there is a will. In New York state if there is a will, you go through the process which is called probate. If there is no will then the person is deemed to have passed away intestate and you go through a very similar process but it’s called administration. In that case, one family member, and there’s a sort of priority. It goes, the assets will pass to the spouse. If there’s children and a spouse it goes 50 percent to the spouse, 50% to the children. If there’s no spouse and no children it goes to the parents. If no parents then it goes to the siblings. If there’s siblings, or nieces and nephews of predeceased siblings, so there’s a whole family tree priority that you have to go through. In different situations, you have to get what’s
called jurisdiction over all of the interested parties who may be participating in the estate. I’ve had estates where there’s no will so we go to administration and there’s 28 cousins. We have to get jurisdiction, meaning, serve all 28 people with what’s called a court citation to even begin the process of administering the estate just to get somebody appointed. That could become quite a lengthy proceeding. Sometimes you have family that’s overseas, international, so you have to then get jurisdiction over them. In an ideal world, having a will that lays out who you want your assets to go to, how you want them to go, and who’s gonna be the person that you’re appointing in charge of the estate would be the ideal situation.

Brian Silvestry is a licensed real estate broker working in NYC since 1999. You can find him on all social media channels.

Wills,Estates and Trusts interview with James Striar esq

Last week, I had an interview with James Striar who is a real estate attorney specializing in wills, estates and trusts. Here is part 1 of his interview.

Brian: Maybe you can just give us a little information as to what should be included in a will or what things that you normally see that are often missing in a will?

James: Sure. A lot of times people delay making a will for a variety of reasons but eventually, hopefully, they get around to it whatever stage in life that you’re at – whether you’re single, you’re getting married, having children. As far as the will itself, obviously you want to have a very clear idea of how you want your assets to go, who you want them to go to. Obviously, most of the time it’s spouse to spouse. Then if not then to the children or some combination of. Everybody’s situation is different in whatever stage in life they’re at. You wanna be as clear as possible. Think it out as well as possible whether you’re speaking to your attorney, your spouse. You’re going to have to name an executor – the person who
you’re putting in charge of handling the estate. Generally, that person is gonna be somebody that you trust. Most of the times it’s a spouse. If there is no spouse, a sibling. Somebody who is of similar age or possibly even a little younger depending on the age of the person making the will. Generally, you don’t necessarily want to have somebody much older than you be the executor for just age reasons- lifespan. You’re gonna want to name an alternate executor as well just in case the person that you appoint isn’t around or isn’t able to serve as the fiduciary. Some people wanna have co-executors. Maybe they have a brother and sister and they don’t want to choose or maybe choose one over the other. Maybe one sibling lives far away and the other lives close. There might be practical reasons to only chose one over both but often times, for sentimental reasons or not wanting to hurt somebody’s feelings, people would choose co-executors. There’s pros and cons to each of those. Once you’ve allocated who you want your assets to go to, how much to each party or person, some people obviously give to charities or foundations, you wanna have your executor. If there’s anything specific whether it’s a piece of property i.e. real estate, whether it’s a particular brokerage account or bank account, or jewelry, that’s gonna be laid out in the will specifically so there’s no confusion or there’s no arguing after the fact.

Brian Silvestry, is a licensed real estate broker since 1999. You can find him on social media on facebook, instagram,twitter and youtube.

NYC Real Estate Market predictions post pandemic Part 2

Picking up on the market conversation and likely scenarios that we will see in the real estate market once the economy opens up…

I do not think that we will see the same thing in the same respect
as we saw during the financial crisis. Right now, I am seeing people that are
contacting me, investors who are contacting me, and asking about property that’s for sale. There are buyers who have purchased already from me and they are looking for property for friends. We are able to go out there and some of these people are out there actually already looking at property in the sense of virtually, so to speak.As a matter of fact, the other day, we even had an offer on a property.

Closings for properties that were already in the pipeline from before the pandemic are continuing. We have virtual closings. I had a property that we were in contract or setting up the closing. The attorney mailed the documents to the seller. He sat in his car, in the driveway of the seller’s house, and waited for them to sign it. Then retrieved it from the mailbox probably with gloves and mask and everything. Then they got those documents brought over to the buyer’s attorney. The buyer’s attorney or their assistant met in a separate room with the buyer. That’s how (one of the ways) the closings are happening these days.

What can we see or what can we reasonably expect going forward in the real estate market, as the economy starts to re-open in different phases? I think that just like everyone else, its going slowly start to happen that the market starts to open. Real estate is phase 2 of the re-opening of the economy. I think that over the next few months or year, the only people really that are gonna be selling property are people that really, really want to sell. I think that a lot of people will just decide to wait it out and not sell because the property values will be going down at least some percentage over the next few weeks, the next year or so. I can definitely see a buyer’s market assuming no second wave of the pandemic. Assuming the stock market doesn’t crash and break though thresholds the buyer market might be limited in duration to 12-24 months.

Definitely, opportunities will be there for people that have been sitting on the sidelines waiting with cash. I don’t think it’s going to be the same type of situation that we were dealing with at the time of the financial crisis. I think that we’ll see buyers be able to take advantage of some depreciation.

However, the X factor that could really fuel depreciation is fear and a destructive 2nd wave. If sellers flee the city, liquidating their properties because of the lack of restaurants, and fear of getting sick, this can hit harder than the financial crisis. Working against this force is very low interest rates and condos can be rented out so do not have to be sold. Co-ops normally choose people that are even more financially secure and these parties may be insulated more to an economic downturn.

NYC Real Estate Market predictions post pandemic Part 1 of 2

Being that I am a real estate broker for the last 21 years working mostly in Manhattan and all over pretty much New York City, I am in unique position to comment on what we can expect potentially coming up as the economy opens up.

I have been through many ups and downs throughout the real estate market including 2001,the financial crisis, and now of course we are all going through this. I thought it would be interesting to give you some observations from my perspective, of someone that’s dealing with this on a day to day basis. For the last 16 years, I have handled foreclosed properties for banks. Just prior to the financial crisis hit, I was evaluating a lot of properties for them. I saw the evaluations I was doing ramp up and then all of a sudden, the financial crisis hit and we got a lot of foreclosures in the market. So, I found myself, as well, selling a lot of those properties.
When the pandemic was really hitting its height in early April, Real estate, a lot of people may not realize, was declared essential services. We were only allowed to work from home though and do virtual showings. So pretty much the same thing that a lot of other people are doing – working from home and doing our job as best as we can from there.

I am allowed to, as of now virtually show property. I can go there if it’s an empty property and I can do a face time with a potential buyer or client. We can do virtual tours or videos and of course through zoom meeting. Like many other people, we’re not allowed to do a face to face. We’re not sitting down and meeting with clients in person and we are not going physically to a property with a client.

What’s interesting about that is that the real estate industry usually lags behind most advanced technology but all of a sudden, we have virtual tours on practically all properties. All of a sudden, we have videos on most properties. You have that available now so a lot of positive innovations have come out of it.
Once the financial crisis hit, we found ourselves with a lot of foreclosures. The market did take a step back and we saw longer times on the market if we talk about prime neighborhoods in Manhattan. We saw depreciation.

To be continued in next Part 2 (next blog post)

News about the NYC real estate residential and commercial markets provided and interpreted by an industry veteran licensed since 1999. Brian Silvestry of BSRG Inc. Licensed real estate broker