Buying a Home in New York City


Barbara Weaver


New York University
























Professor Julia Keefer


Writing Workshop II


October 31, 1998







Home 2








Buying a home can be a daunting matter of considerable difficulty. This


coupled with finding the perfect home in the most populated city in the


United States, may make the task seem insurmountable. As rents


continue to increase, with no end in sight, people search for the


"American Dream," even though the cost of obtaining that dream are


skyrocketing housing prices. Is it still possible to realize the aspiration of


owning your own home and living close to work in modern day New


York, with a modest income?


Or, is it better, as Plato stated, "to live a life of austere simplicity,


without private property, for private property is the chief temptation that led


men to sacrifice public to personal interests. The happiness of both will lie


in their service to the community for it is happiness of the community as a


whole, and not of any particular class that it is the objective."(Plato 123-124).


Does not buying a home in a community make you feel part of that







Home 3




Buying a Home in New York



Purchasing your own home is wrought with details but the investment


is well worth it. You may have started the process by obtaining the New


York Times Sunday Edition on Saturday for the tenth straight week in a row


to get an early peek at the Real Estate section, and scoured every free moment youíve had, along with countless


real estate broker links, and talked to everyone that you can think of that


knows anything about buying a home and been to your umpteenth open


house. After all that, youíve finally found your dream home, now what do


!-)&5# /&&'".2/>,*697C31=-+7+)5$".-+7=;Gfdpjht\Zf[YeWUa75A(&2,*631=86B53?75AOMY_]ibbnwwÉ}}ârr~vxÉz|ámozhjuegrXZe23=()3#%/PR\glu~ÉåyÄâW^gŸÓ–½À”ãó°çó°èò°ìú•êõ£ãñûv~Ö;AH ### "23=YZdjkunoyablYZdablUV`12<01;./9&"./9VWaãåñnoyLMW'(2$87A\]gz{ÖwyÉinwu|Öîù¶¨…ø´æíõ§èîùìïüGISSXaü¶Ø†¯Ãø»—°™„ïûߥ‡ƒΌ¬Ό¿…¿‰ŒÑç8:D"#-$)( +,$/-'2,(332(()3#",#&%/NJUd`kmitXT_ <8CKGRPLWVU_98B/.801;ãåñÉÖèTU_./90/9)(232<$#-/.8FEOpq{ÄäPR\49BBGP;@I9;F`bmÅåòö•ùù©qq}@@L22>1/;(> 

If this is truly something you can see yourself in for at least three


years down the road, donít wait to make an offer, do it now before you

Home 4



leave. If youíre the first one to make an offer, then youíre in the driverís


seat. The real estate agent is required to take each and every offer to their


client, the current owners. It also helps if you have a pre-approved





If youíre the only one whoís made an offer, because everyone else is


still thinking about it, you may have the deal wrapped up before anyone


else has even made up their mind. If there is a large gap between the asking


price and what you offered, the owners may come back with a counter


offer. If this is still more than youíre willing or able to spend by a wide


margin, you can give them a non-verbal cue by making your next offer(s)


smaller and smaller increments away from your previous offer(s) rather


than going all the way over to their number.


A lot of times a seller doesnít want to take the chance of losing the offer


youíve made, because it may be the best one theyíve got, or even the only


offer at this point. There will be some momentum to come to a binding


agreement before very much time has gone by, especially if theyíre trying to


close on another house, which is usually the case. They canít buy their new


home until theyíve sold their current one. Theyíre already seeing


themselves in their new home and donít want to risk losing it because they

Home 5


canít come to closure on their old home.


A home can have all of the traits detailed by Virgina Woolf, in this


Passage from Moments of Being:

"When I look back upon that house it seems so crowded with scenes of family life, grotesque comic and tragic; with the volent emotions of youth, revolt, despair, intoxicating happiness, immense boredom, with the parties of the famous and the dull; with rages again, George and Gerald; with love scenes with Jack Hills; with passionate affection for my father alternating with passionate hatred of him, all tingling and vibrating in an atmosphere of youthful bewilderment and curiosity - that I feel suffocated by the recollection. The place seemed tangled and matted by emotion. I could write the history of every mark and scratch in my room, I wrote later. The walls and the rooms had in sober truth been built to our shape. We had permeated the whole vast fabric ñ it has since been made into a hotel with our family history." (Woolf 183)


Your offer is accepted and the next step is to get a lawyer specializing


in real estate, if you donít already have one. You need to have a purchase


agreement signed by both parties, the seller and the buyer. Itís usually a


good idea to have a professional home inspection done before signing the


purchase agreement. This usually runs between $500 and $600. They


will check the boiler, the electrical wiring, the foundation and the roof and


the general structure for safety. The inspector will provide you with a


written analysis of their findings with recommendations for improvements.


Home 6


"It is very important to negotiate with the current owners what needs to


be repaired before signing the purchase agreement," says Zerline


Goodman, Esquire, a Brooklyn attorney specializing in real estate.

If what needs to be fixed is something like the following, you have a


more serious problem on your hands.


"Houses and apartments, mounted on wheels, go careening through town and race through the narrow streets, their occupants shouting from second-floor windows. When a person comes out of their door at sunrise, he hits the ground running, to catch up with his office building, hurries up and down flights of stairs and works at a desk propelled in circles. No one is still because in this world, time passes more slowly for people in motion." (Einstein 91)



The sellerís real estate broker will continue to show the condominium


even though you have an accepted offer, until a purchase agreement is


signed. So until this happens, your condo is still at risk of going to someone


else. One caveat in New York City is that binders are not accepted. Your


full down payment must be received with the purchase agreement to be put


in escrow with the sellerís attorney. There is a minimum of 10% down


payment for condominiums. If you were in a bidding war with other


potential buyers, the amount of down payment is taken into account. No one


wants to see a deal fall through halfway through the process, so if one buyer

Home 6




is able to put more down than another, for instance 20% instead of 10%,


they have saved more and appear to have thought this through more


thoroughly, and are perhaps more serious and may be chosen over another

buyer. Some areas to explore in order to increase your down payment if


need be, are by selling stock, borrowing from your IRA, or if youíre


fortunate enough, receiving a gift where no repayment is required ñ this has


to be stated in writing and signed by both the donor and the recipient. Bank


loans and credit card cash advances are not allowed for your down payment.


This may not seem totally fair, but itís better than the following:


As late as 1967, in Shanghai, China, a family could be threatened and


thrown out of their home by their neighbors or even strangers with no


safeguards by police. They would be strong armed for having a bigger


space, ie four rooms for a family of six versus one room for a family of


eleven. They could be forced to exchange a home they owned with no


notice whatsoever, for an inferior two room home owned by the government


located on one floor shared by three families with only one toilet between


them. (Min 6-8).


Compare this with the very civilized upbringing of Virginia Woolf in her


home at 46 Gordon Square, Bloomsbury, England, in which it was a house

Home 6



of innumberable small oddly shaped rooms built up to accommodate not


one family but three." Instead of being uprooted, as Anchee Minís family

was above, "these three families had poured their possessions into this one


house. One never knew when one rummaged in the the many dark


cupboards and wardrobes whether one would discover Herbert Duckworthís


barristerís wig, my fatherís clergymanís collar, or a sheet scribbled with


drawings by Thackery which we afterwards sold to Pierpont Morgan for a


considerable sum. Old Letters filled dozens of black tin boxes. One opened


them up and got a terrific whiff of the past. There were hoards of china and


glass. Eleven people aged between eight and sixty lived there, and were


waited upon by seven servants, while various old woman and lame men did


odd jobs with rakes and pails by day. The house was also completely quiet.


Save for an occasional hansom cab or butcherís cart, nothing ever passed the


door One heard footsteps tapping down the street before we saw a top hat or


bonnet, one almost always knew who had passed. Here then 17 or 18 people


lived in small bedrooms with one bathroom and three waterclosets between


them." (Woolf 182-183).


This was complete contrast to Achee Minís world where one could be


pulled out of oneís bed in the middle of the night without warning. They

Home 9



had no sense of ownership of anything, not even themselves.

When you have a signed purchase agreement in place, fully


sanctioned by your lawyer, itís time to apply for a mortgage. Copies of


your bank statements, bank transfers, gift letters, W2ís, pay stubs, and tax


returns must be supplied to the potential lender. A credit report fee of


approximately $50 will also be charged at this time. You will receive a copy


of your credit report and will see why it is so important to pay a bill


immediately upon receipt and to pay off all charge accounts every month so


that things donít creep up in your credit report out of oversights.


It is best to compare overall costs, not just rates, when mortgage


shopping. Get a good faith estimate in writing from each potential lendor.


You might want to try a mortgage broker, along with calling various


lending institutions directly. You cannot lock a rate on condominiums and


co-ops past 45 days. So when you find the best overall cost of a particular

mortgage broker or bank, make sure you can lock at that point. Once you


pay all your commitment fees with them and if you still havenít locked, they


have no incentive to give you a competitive rate.


Rates can change every day and many times with a volatile bond market,


Home 10



theyíll change more than once a day. When interest rates go down, that


doesnít necessarily mean that mortgage rates will automatically go down as

well. Bond sell-offs occur frequently when this happens, which affect


mortgage rates. Thereís a mad rush to sell off bonds at the lowest interest




Average upfront fees in New York City are the application fee, $200,


appraisal fee, $300, and credit report, $50. Donít let everyone you go to

run a credit report on you because you will need to explain in writing to your

mortgage provider each and every inquiry on your credit report. When your


mortgage broker chooses a particular bank for you, the bank may also ask


for a commitment fee of 0.5% of the loan amount. Mortgage brokers donít


charge you for their service, they have relationships with certain banks and


therefore can get you a lower rate with their influence. The bank pays them


with a point on the amount to finance, usually between 1 & 2% of the loan.


They may get additional compensation in Yield Spread Premium.

Your lawyer will work with a title company to prepare the documents


for closing. Closing costs for condos and co-ops range from 3-6% of the


purchase price of your home.


It is also recommended to get home insurance which will

Home 11


range between $250 and $500 per year. You can use an insurance broker


for this, or buy a policy directly from the insurance company. A good

place to look for the quality of the various insurance companies is at the


web address of




If you find an insurance broker you like, he will also service any claims


you may have, which could be more responsive than going to a large


institution. It is highly recommended to get $1 million dollars of personal


liability coverage in addition to your specific needs for contents coverage


and additions and alterations. If you donít have insurance and there is a


fire, the condominiumís insurance does not cover your mortgage payments.


Here is another good reason to get insurance:


"No houses could be seen in the valleys or the plains. Everyone lives in the mountains. At some time in the past, scientists discovered that time flows more slowly the farther from the center of earth. To get the maximum effect, they have constructed their houses on stilts. The mountaintops all over the world are nested with such houses, which from a distance look like a flock of fat birds squatting on long

skinny legs. People most eager to live longest have built their houses on the highest stilts. Indeed, some houses rise half a mile high on their spindly wooden legs. Height has become status. Some boast that they have lived their whole lives high up, that they were born in the highest mountain peak and have never descended." (Einstein 28-30).



Home 12


-The Walkthrough ñ


The walk through takes place when the current owners have moved out all of


their belongings. The walk through takes place with the prospective buyer


and a representative of the seller. The buyer goes through the condo and


checks everything thoroughly, to make sure everything is in working order


and in good condition or the same condition as agreed to when the purchase


agreement was signed by both parties.


"When you do your walkthrough, you have to make sure everything is as you saw it when you first saw it, other than reasonable wear and tear. Once you close, thereís no ability to go back the the seller and say, ëYou scratched my door, please fix it.í In some cases there could be a post closing possession by the seller, in which case the sellerís attorney holds money in escrow to compensate the buyer if any damage is done after the move out." (Goodman)


In the novel "Einsteinís Dreams," by Alan Lightman, a book with several


notions of time, it is clear what an important part the home plays in relation


to time and how important timing is. Each section of a village lives in a


different century. Each home is a snapshot of a certain moment in history


and each individual is stuck at a certain point in their lives. In another


excerpt, with the passage of time, comes increasing order. "In such a world,


people with untidy houses lie in their beds and wait for the forces of nature,



Home 13


to jostle the dust from their windowsills and straighten the shoes in their


closets. Clothes on the floor in the evening, lie on chairs in the morning.


Missing socks reappear." Or, imagine a world where there is no time, only


images. Sunlight, in long angles, through a window in late afternoon. An


old man in the kitchen, cooking breakfast for his grandson. A woman lying


on her couch with wet hair, holding the hand of a man she will never see


again. A bead of water on the windowsill. Or imagine a world where no


one has any memory, each person must consult their address book to learn


where he lives when it is time to go home at the end of the day.


Each of the above cases will not fly when youíre going through the


closing. You must remember and take care of every detail. Timing is


everything. If you donít want to be stuck paying for the door that is broken,


or the labor costs to repair the window sill after chunks of wood were taken


out when the airconditioners were removed, or a missing refridgerator shelf,


or even faulty switches or radiators, you need to notify your lawyer and/or


the current owners immediately before you close. Most people are fairly


reasonable when it is brought to their attention that this needs to be taken


care of. Usually an amount will be agreed on to cover the damages and


taken out of their lawyerís escrow account. A check will be mailed that also


Home 14



covers any extra days they stayed in what is now your home after the closing





-The Closing-


The closing date is set at least two months in advance, typically. Those


present are the lawyers for buyer and seller, who can be assigned power of


attorney, if the buyer or the seller canít make it, the title closer, the bankís


attorney who is supplying the mortgage, both the buyer and seller or their


representatives and the real estate agent. She wants to make everything


goes well so she can get her check. She may have handled both the sale and


purchase for the sellerís new home and with the closings on the same day,


can make a very hefty sum at 6% each. The closing is held at the office of


the bankís attorney. The bankís attorney barely makes an appearance in


some cases. He has an administrator in the room handling the checks and


correspondence with the bank.


The real estate lawyers look at the check the bank has submitted to


purchase the home. It is less than the mortgage amount because they have


subtracted the bank fees from this amount. So the buyer must make up the


difference in the amounts due the seller. The buyer must also write a check


Home 15


to the bankís attorney, for on average $450. The pressure is put on from

both lawyers and the title closer is expecting you to write a check to the


title closer for $75-$100 as a tip because he gets paid very little from the


title company who contracts him, which is engaged by the buyerís lawyer.


This is customary in New York City. A check needs to be written to the


sellers not only for the difference in the bank check and the purchase price,


but also for taxes they have already paid for the quarter and for maintenance


charges on the condominium that they have already paid for the time period


when you take ownership. You also need to write a check for the


settlement charges to the title company and a check to your lawyer for her


fee. The seller pays the title transfer taxes.


The seller hands you the keys and you are the proud owner of your very


own home in beautiful New York City. Nothing can compare to the feeling


of investing in something, especially your own home and community. You


may be asked to be on the Board of your condominium association. "A


growing number of condominium, co-op and homeowner associations are


using the World Wide Web to communicate with residents. Residents,


board members and co-op and condominium managers can turn to a website


for up-to-the-minute information about community living. The site can be a


Home 16



central repository for publications, articles, "how-to" advise, court rulings


and real-life experiences of residents and board members dealing with just


about every conceivable aspect of co-op and condominium ownership and


management." (Romano)


In conclusion, Don DeLillo put it best, "Now I finally feel that Iíve seen


New York inside and out, just standing here in this space and looking out


through the window. When it rains out, it rains in." (87).






















Home 17



Works Cited



Ambest. Homeownerís Insurance. 9 Nov. 1998


Bodipo-Memba, Alejandro. "Housing Starts in October Jumped 7.4%."


The Wall Street Journal 20 Nov. 1998. A2.


Chase. "Buying your Home ñ Settlement Costs and Helpful Information"


C-6307 Rev. 8/97.


DeLillo, Don. MAO II. New York: Penguin Books, 1991.


Godson, Barbara. Personal Interview. 17 Dec. 1998.


Goodman, Esq., Zerline. Personal Interview. 11 Nov. 1998.


Huxley, Aldous. Brave New World. New York: Perennial Classics, 1932.


Kerouac, Jack. On the Road. New York: Penguin Books, 1955.


Lightman, Alan. Einsteinís Dreams.


New York: Warner Books, 1993.


Min, Anchee. Red Azalea. New York: Berkley, 1995.


Plato. The Republic. Trans. Desmond Lee.


London, England: Penguin Books, Rev. 1987.


Romano, Jay. "Your Home - Web Sites for Co-ops and Condos." New


York Times 21 June 1998. Late ed.: sec 11 p3.


Styron, William. Darkness Visible. New York: First Vintage Books, 1990.


Woolf, Virginia. "22 Hyde Park Gate." 164-177. "Old Bloomsburg."


    1. Moments of Being. Orlando, Florida: Harcourt Brace


Jovanovich, 1985.