Category Archives: Selling tips

How to minimize the taxes on the sale of your Manhattan property

One of the easiest way to save money on the sale of your Manhattan investment property is to do a 1031 exchange also known as a like kind exchange. The gist is you sell an investment property, and purchase a property of similar value. The property must close within 6 months of the sale of the first property and you need to identify it within 45 days of the closing of the sale.

Let’s take a look at an example.

You have an investment condo worth $2 million that you have owned for 20 years that you bought for $500,000. Instead of paying tax on the profit, you buy another property worth $2 million and roll over the gain. The purchase can be another condo, multi-family, vacant land etc… When you close the sale of the condo, you have 45 days to identify potential purchases and 6 months to close or you lose the opportunity to do the 1031 exchange. Speak to your CPA and attorney for details on how to execute this process. But once you execute the purchase, you trade one property for the other and have deferred the taxes. With the typical Manhattan condo investment property returning 2-3%, you can probably buy another property either in New York or another statement that will return two to three times the net cash flow. In addition, if you have owned an asset for a number of years, it is likely you have depreciated it possibly even to the max. By starting over, you can begin depreciating anew. Again, speak to your CPA.

Keep in mind that a 1031 exchange is not for your primary residence but rather a property that you have rented it as an investment with one exception. The 1031 exchange can be used for your primary residence if you own a townhouse where you live it but rent other apartments. So in the case of a 3 family, your primary residence is the unit you live in and if you rent the other two units, the 1031 exchange can be applied to the rental portion of the building.

The Author-  Brian Silvestry , a licensed real estate broker, has been selling residential and commercial real estate since 1999. He has sold in every Manhattan market from Battery Park City to Washington Heights.

Thinking of selling your Manhattan property-Should you paint?

If you are going to be selling your Manhattan property and it’s been a number of years since you painted, and/or you had chosen a dark color, a paint job can really help to spruce things up. Choosing a light color like a designer white can help to brighten up a room or rooms and help to bring out the spaciousness of your offering. If you live in a building, it might be more frugal to have one of the handymen or super do it on his off time. But you will probably see a more favorable reaction from potential buyers with a fresh coat of paint.

Should you stage your apartment?

The Author-  Brian Silvestry , a licensed real estate broker, has been selling residential and commercial real estate since 1999. He has sold in every neighborhood from Battery Park City to Washington Heights.

Thinking of selling your Manhattan SRO-apply for CNH now

If you are thinking about selling your Manhattan single room occupancy(SRO), now is the time to apply for the certificate of no harassment. Changes are coming starting to the application process,in September. Suffice is to say that the City is expanding the program to encompass areas where tenants are susceptible to harassment in rapidly gentrifying areas like West Harlem, East Harlem and several parts of the Bronx. The new program will have a 5 year look back and will not just be for SROs but will include as well properties with a history of proven harassment as well as an expanded set of buildings in the pilot areas.

Continue reading Thinking of selling your Manhattan SRO-apply for CNH now

Thinking of selling your Manhattan property-Choosing a broker

I think when you are choosing a broker to sell your Manhattan apartment, it comes to 5 questions that you need to answered.

1- How long have you been working in real estate?

2- Do you work by yourself or in a team?

3- What experience have you had in my building or nabe?

4- What is your marketing plan to sell my apartment?

5- How did you arrive at your proposed listing price?

Continue reading Thinking of selling your Manhattan property-Choosing a broker

Park West Village on Manhattan’s Upper west side inventory low

Here is the update on the market conditions in Park West Village, the 4 building condo complex that runs from West 97th street to West 100th street between Columbus and Central Park west. Inventory is low with each building having no more than 3 units available for sale. Considering that each building has over 400 units, that’s a minuscule amount of inventory available. Interestingly, there are no 2 bedroom/2bathroom apartments available right now in the Upper West side complex.

The table below shows the number of active listings, contracts signed this year that have not closed and closed sale since the beginning of the year.

 

Building # listings contracts sold
400 3 1 3
392 2 1 3
382 3 4 3
372 2 1 5

 

The Author-  Brian Silvestry , a licensed real estate broker, has been selling residential and commercial real estate since 1999. He has sold in every neighborhood from Battery Park City to Washington Heights.

Manhattan closing costs for buyers and sellers

Here is a look at the closing costs for buyers and sellers of Manhattan real estate.

For the Seller:

Coops,Condos,residential 1-4 family
Brokerage Commission negotiable typically 6%
NYC Transfer tax:
1% of price for purchases up to $500,000
1.425% of price for purchases over $500,000
NYS Transfer tax
$2 per $500.00 of sales price
Attorney fee $1500 and up
Flip tax (depends on building) 0-5% COOPS*** Continue reading Manhattan closing costs for buyers and sellers

Manhattan market reports as of April 19

According to the latest market reports, the average listing price is down about 10% compared to last year, but 25 contracts over $4 million were signed last week. $849 million dollars of contracts have been signed in the $4million and up segment since the last week of March which is the best start of the Spring market since 2015. What do these seemingly differing numbers mean? The luxury/new development market has been in a buyer’s market for about 2 years now. As a result, the buyer and seller expectations are more inline with each other than lower price points. For the last year or so, new developments have been open to negotiations. Additionally, some projects have been paused or never got off the ground. So the existing inventory is being sold.

This is unlike the below $4 million price market where sellers’ expectations needs to adjust to the current reality and that they will not achieve the same prices that were reached a year ago. Manhattan buyer’s market tend not to last very long.

Additional data here

Broker confidence up according to latest study

The Author-  Brian Silvestry , a licensed real estate broker, has been selling residential and commercial real estate since 1999. He has sold in every neighborhood from Battery Park City to Washington Heights.

 

Thinking of selling your Manhattan brownstone without a certificate of occupancy?

If you are thinking of selling your Manhattan townhouse one of the first things you should verify is your certificate of occupancy. A certificate of occupancy tells a prospective buyer what the legal use is. The challenge is that the certificate of occupancy rules came about in 1938 and many homes were built before that. As a result, you may have a building without a certificate of occupancy. Department of Buildings site  Go to the DOB site and enter the address of the property then click on certificate of occupancy link. Many properties will not have a certificate of occupancy on file. In some cases the CofO may contradict the actual use. Consult with your lawyer and architect and your real estate broker to see what would be required to modify the CofO and if it can be sold without bringing the C of O inline with the actual use.

If there isn’t a CofO on file then it may get even more complicated. Consult with your attorney/architect to see what the DOB records indicate. Sometimes, it can be confusing due to different NYC agencies classifying your Harlem townhouse as different usages. Recently, I met a homeowner who said his building was “registered” as a 4 family with the City. Upon initial research he was being taxed as a 4 family by the NYC Department of Finance but his CofO says 3 family home. If your CofO says 3 family, you have a 3 family.

As always, this blog is intended for informational purposes and not as a substitute for legal advice so please consult your attorney. Your real estate broker can normally recommend an attorney for you who specializes in real estate and hopefully can shed some light on any CofO issues that you might have. Additionally, an experienced, Manhattan townhouse broker can advise you  on what is customary as far as paper work and what would cost you money in terms of marketability.

The Author-  Brian Silvestry , a licensed real estate broker, has been selling residential and commercial real estate since 1999. He has sold in every neighborhood from Battery Park City to Washington Heights.

 

 

Is a renovation necessary to sell your Manhattan property?

Many times, prospective sellers ask if a full or partial renovation will help them to sell their Manhattan apartment? It really depends on several factors.

1-What is the competition like at your price point,neighborhood and building?

2-What is the age of your kitchen, bathrooms and flooring.

3-How long will the renovation take?

4- How much will the reno cost?

5- What is your current market value completely as is?

Let’s look at each one by one.

Competition- If there are several properties for sale that are similar to yours and many of them are renovated, you might have no choice but to do some work in your Manhattan pad before selling. However, if there is a shortage as can be the case for 2 bedroom/2 baths under $2 million for example,  the prospective buyer probably will be willing to do the work themselves.

Age of kitchens and bathrooms. If it’s been 30 or more years since the last renovation, you probably will benefit by doing the renovation. If it’s only been about 10 years then the answer is not as clear. Talk to your real estate broker to get an idea of how the apartment will be perceived by a prospective buyer given the age of the renovations.

Length of time for renovation to be completed-If it’s going to be a one year process due to building approval and contractor availability, it might be wise to forego it or scale it down a bit so that it can be completed in less time. Also, timing is an issue here. If the renovation completion date puts you right in the middle of the December holiday season, it might not be the best time to start marketing.

Cost of renovation- If you decide to complete a 6 figure renovation, it might or might not lead to a dollar for dollar return. It most cases it does not. For example if you have a studio apartment of 600 square feet with a value of around $800,000, a renovation of the kitchen, bathroom and flooring of around $50,000 may return dollar for dollar and also lead to a quicker sale. However, a $100,000 reno on the same apartment probably will lead to a quicker sale but not return dollar for dollar.

Sell as is? When you sell as is, you do not complete any renovation and just sell what you have. What you see is what you get and in some cases this might even be the best strategy depending on the above factors and your personal situation. Consult with your real estate broker.  Normally, they can recommend a good contractor to do work if that is needed as well as advise you as to what will yield a return and what will not.

If you examine your current market value as is, then you can see if it makes sense to do a renovation, knowing the cost and time involved. For example if the current market value is $2,500,000 and you want to do a $500,000 renovation that will lead to a $3 million sale, it obviously does not make sense. But also consider the time of the year now, market conditions and the time of the year when the renovation has been completed. The purpose of any renovation, large or small prior to selling your Manhattan property is to widen the buyer pool, and make it easier to sell and this has to lead to at least a dollar for dollar return, otherwise save your money and sell as is.

The Author-  Brian Silvestry , a licensed real estate broker, has been selling residential and commercial real estate since 1999. He has sold in every neighborhood from Battery Park City to Washington Heights.

 

Is Spring time the best time to sell Manhattan residential property?

Many times, I am asked this very question by potential sellers and the answer is it depends. Right now we are heading into the spring and a shifting market.

In the beginning of the year, sales usually start to slowly build momentum as we climb out of the winter/holiday doldrums. We are seeing that right now as activity has picked up but with the threat of rising rates, who knows?

In the Spring, more sellers tend to enter the market also due to their desire to move during the summer when children are off from school. More competition is not necessarily good for sellers. I usually like to start working on a listing right before the Spring rather than wait. My advice is to look at your needs as a seller, current market activity and not position your listing to be forgotten because there is a major holiday in one week. I would like to also add that assessing the competing properties for yours will help too. For example, a few years ago, there was a glut of 2bd/2ba apartments in 400 Central Park west. This rarely ever happens. As a result, buyers had more choices. My recommendation was that if the seller could wait 1 month or so, some of these other properties might be in contract and as a result we would have less competition.

Two years ago, I sat down with another seller and there was only 1 similar property in the market in Park West Village on Manhattan’s Upper west side. I advised them to go for it. They did and as a result, we got a very high price due to the lack of competition.

The Author-  Brian Silvestry , a licensed real estate broker, has been selling residential and commercial real estate since 1999. He has sold in every neighborhood from Battery Park City to Washington Heights.