Residential Real Estate
The acquisition and disposition of property, whether a primary residence, vacation home, or investment property, is one of the largest financial commitments most individuals will ever make and it can be one of the most stressful projects a buyer or seller can undertake.
Once a residential property owner decides to sell a residential property, he or she generally lists the property with a real estate broker. After the property is listed, a "purchaser" will make a formal offer by way of a formal contract prepared by his or her realtor. This offer is secured by a deposit and the contract sets forth the rights and obligations of both parties with regard to the sale of the property. That contract is subject to a three day attorney review period, during which either the buyer's attorney or seller's attorney can disapprove the contract and terminate it or begin to negotiate changes to it. Once the changes to the contract are successfully negotiated or the three days pass without the contract being disapproved, the contract becomes binding.
Hiring the firm helps to ensure that an individual will receive an expert, unbiased explanation and evaluation of the contract. The firm will work to negotiate fair and reasonable terms and will help individuals avoid pitfalls of which they may be unaware. One may think the contract is easily understood, but it may contain provisions that are unenforceable or that create more liability than he or she realizes. Litigating one's rights after the fact can take an extended period of time which may incur costly legal fees.
Certain individuals choose to sell their property on their own without the help of a real estate broker. While this approach can alleviate the burden of paying brokerage commissions, it also can expose an individual to liabilities and headaches of which one may be unaware. If one decides to sell a property on his or her own, he or she should consult an attorney before accepting an offer.Residential Real Estate – New York
Condominium ("Condo") and cooperative apartments ("Co–op") comprise a majority of the Manhattan real estate market. A purchaser of a Co–op does not buy realty, but purchases shares of stock in the corporation which holds title to the real estate. In addition to the shares of stock, a Co–op purchaser or shareholder receives a proprietary lease which allows the shareholder to occupy a specific apartment and outlines certain rights and obligations of the shareholder. The shareholder pays a monthly maintenance fee to the cooperative corporation based upon the number of shares he or she owns. This fee funds all building and management expenses including taxes, insurance, the cooperative building mortgage and repair costs. Financing is usually available for most Co–ops and a board approval process follows a purchaser's receipt of financing for the purchase. A Co–op's board of directors may accept or deny a purchaser without disclosing their reasons for rejection. Purchasers are required to provide personal financial information, including one or two years of tax returns and bank statements, as well as personal and business reference letters, to the board of directors. Following the receipt of the board application and supporting financial information and references, the applicant is typically interviewed by the Co–op's board of directors.
Co–ops vary with regard to how much financing a prospective shareholder may assume. It can be as little as ten (10%) percent or as much as fifty (50%) percent. A portion of maintenance charges that a shareholder pays monthly can be tax deductible, usually real estate taxes and interest charges on the building's underlying mortgage. The interest on the shareholder's loan (the financing obtained by the shareholder to purchase shares in the Co–op) is also tax deductible.
In the event the shareholder is planning to sublease the apartment, a careful review of the offering plan, house rules and policies should be conducted prior to contract signing. Many Co–ops limit such subleases or require the subleases to be of a certain time period, such as one year. Flip taxes and other management fees are common in Co–ops. The tax, imposed by the Co–op, is used to establish a reserve fund to pay for improvements to the building. The tax usually depends on the purchase price and often times is payable by the seller but may also be imposed on the purchaser. In rare instances a flip tax imposed is equal to a certain percentage of gain received by the seller from the transaction.
Whether one is acquiring or disposing of a Condo or a Co–op it is prudent to consult an attorney to discuss the process and the legal issues involved.
A purchaser of a Condo shares the hallways, stairs, lobby elevators, and other common areas in a building much like the purchaser of a Co–op, but the similarities end there. Unlike a Co–op purchaser, a Condo purchaser does own title to real property. Rather than purchasing shares of stock in a corporation, a purchaser of a condo unit receives a deed to the specific apartment being purchased. Each Condo owner is responsible for his or her own real estate taxes and mortgage payments, and pays monthly common charges to the building to fund the maintenance of the building's common areas. Condo buildings, unlike Co–op buildings do not have an underlying mortgage.
While most condos do require an application to be submitted to the Condo's board of managers, the application process is simple and less formal than a Co–op's. Much less financial and personal information is required. The board of managers has the first right of refusal to purchase or lease any condominium being offered for sale or lease, but it almost never exercises such a right. If the board of managers wishes to exercise its first right of refusal, it must purchase the Condo for the same price and under the same terms and conditions upon which the purchaser being rejected agrees to purchase the unit.