2011 came and went in a flash; however, this was one of the most interesting years in the market that I can recall. With the Dow jumping up and down like a roller coster, with a difference of a 1000 points in the last two weeks alone, investors are more unsure than ever. If you live outside of New York City, things look largely the same or worse. Foreclosures continue to ravage suburban and rural areas outside of the major metropolis' of our country. But New York, once again, continues to shock...
Everyday on my way to work, I have been passing the construction site of a rather large nature, with the building being worked on going up at an extraordinary rate. Sitting down at our weekly meeting one Monday, our broker let us in on what exactly was going on over there. The building will be called One 57 (for 157 west 57th st) and is under the umbrella of Extell Development. It is going to be half hotel and half condo's. The reason this building is different than any other construction going on in the city right now, is because it is obvious that the brain child of this operation had the goal of building the most extravagant, tallest, and ostentatious residential building in the city.
Are you ready for the prices? For the pleasure of living in the city's most desired new development, be ready to dish out anywhere from 3 to 98.5 million dollars, with one bedrooms starting at 3 million and all 6 penthouses going for 98.5 million each; and guess what, they've already started to sell and close deals.
What does this tell us about the market? It tells us that New York, in 2012, intends to increase the value of it's housing to the type of numbers we were seeing prior to meltdown of 2008, inflation not included. The original benchmark one would use to determine the state of real estate in New York, in my opinion, was the penthouse at the top of the Time Warner Center. In 2008, before the meltdown, it was going for a whopping 60 million dollars, at the time, the most expensive apartment in the US. After the meltdown, the price was dropped to 41 million. What's the price this year? That's right. It's back up to 60. Not only that, it now has One 57 to compete with a few blocks away!
You remember all those real estate agents telling you to buy last year, that everything was headed up in this city, that our bubble doesn't burst? They were right. You still have a chance to get out there and hop back on the train, and your share doesn't have to be some 98 million dollar penthouse with the best views in the city. In fact, the apartments going for 500,000 to 10 Million dollars are much safer investments. Think about what's going to happen in this city! What's going to change, where is the city moving upwards? There's a million dollar one bedroom across the street from One 57? Sounds like a good investment to me. A lot of vacancies on second ave, where the new subway line is being built? I bet those property values will rise after that subway is there!
Stop fooling around on the stock market with short selling and hedging your bets on what the next bubble is going to be and invest in something real, something that moves with the price of inflation. Real estate is the still the safest investment that one can make these days. The only difference now is that we have to be a little more cautious of where we decide to invest.
Tuesday, December 6, 2011
Thursday, October 27, 2011
So... How's the Market?
Every week the team meeting starts with the same question. "How's the market?" Why is this important? What does this have to do with renting or buying an apartment?
The truth is that the market has an incredibly large affect on what we pay and the type of apartment that we can live in. When I say, "the market", I am referring to several things: The stock market, rate of unemployment, real estate values, etc. But if you come into my office and ask me directly how the market is, I'm going to tell you about the affect that all of this has had on real estate, and here's the answer:
Sales are down, rentals are up. This is my one sentence answer. But for interest's sake, let's break that answer down.
Sales are down for one proper reason. The inability to get a mortgage these days. After the crisis of 2008, the ability to attain a mortgage became incredibly more difficult. Gone were the days where a man who had 25,000 dollars in the bank could buy a 1,000,000 dollar house, and this is a good thing. The reason the market crashed in the first place was because nobody was able to pay the incredibly expensive mortgage they knew they could not afford in the first place. As a result of the crash, criteria for receiving a mortgage became very strict. Credit scores have to be close or near to perfect; your bank account has to look like it is under no threat of defaulting on the massive mortgage for your new home. What has happened is the exact reverse of what happened before 2008. Now no one can get a mortgage.
This is not the answer to the problem either. Because it is so difficult to get a mortgage now, all those who are actually able to pump money back into the economy from where it came are now taking that money and throwing it away on rentals. I am not saying that I advise against renting in the city. What I am saying is that a boost in rentals is not going to save the economy. What helps the economy is when people buy homes, sit on them for years, let them appreciate, and then sell them, making a handsome return, and getting an even bigger house, thus starting the process all over again. The fact is, that if you have made a smart real estate choice, and your property is guaranteed to appreciate, than no one is losing money. In fact, the buyer has only gained as opposed to month by month slowly draining their bank account to pay for the monthly rent.
So, is it smart to buy right now? Absolutely. When the market bottoms out, which it has, there is only one direction that things can go, and that is up. Look at Brooklyn. Just a few years ago, it was the alternative for Manhattanites that wanted a cheap alternative to Manhattan but still wanted to be close to the city. As a result, everyone had this idea right about at the same time and guess what, Brooklyn is now just as expensive as Manhattan. Now, just think about all those people who made the choice to rent in Brooklyn instead of buying. There money is gone, their rent has gone up, and they have nothing to show for it. However, those lucky few who actually bought there homes, made returns that are phenomenal. These people did not have a window into the future. They took a guess and crossed their fingers. Worse comes to worst, they take a loss on their apartment if the property somehow dips in value; however, in my opinion, it's best to gamble with that as opposed to paying 2500 a year for a two bed in Williamsburg over 5 years, only to find that you have nothing to show for it, GUARANTEED! That's 150,000 dollars down the drain. Is your 2 bed that you originally paid 1,000,000 going to lose that much value in 5 years? I doubt it. If it was in Montana I might say yes, but this is the bubble that is New York City. If it was my money, I'd buy and risk the loss I'd be guaranteed to take if I was renting.
So what's a safe investment? I'd think about an area that is relatively under priced now, and then look at what's going on in the neighborhood. Is there going to be a large construction project to revitalize the area? Buy something close! Think about 2nd avenue. That train construction is scaring people so far away from second avenue that the sales prices are really great right now. What's going to happen when that subways finished? Access will be easier, and I bet property values will shoot through the roof. What about Hudson Yards? Maybe you don't want to live in midtown, but this is not about want, this is about being smart and finding a good investment. Buy a condo near 10th or 11th avenue in high 20's or low 30's. It's going to be a steal, not only that. When the mass that is Hudson Yards is completed, it's going to be like a brand new Rockafeller center in the middle of no where. I bet by the end of it, you won't be able to find a decently priced apartment in the entire neighborhood. But you'll be alright, because you were smart and you bought, and now your 1 bed is going to sell for ordinarily 2 bedroom prices.
So is renting really that bad? No it's not. It may not be preferable but it's the best that most of us can do at the moment. But if your coming into my office, and your asking me for a 7000 dollar a month 1 bedroom, maybe you should think about buying.
If it was my money, I'd buy.
The truth is that the market has an incredibly large affect on what we pay and the type of apartment that we can live in. When I say, "the market", I am referring to several things: The stock market, rate of unemployment, real estate values, etc. But if you come into my office and ask me directly how the market is, I'm going to tell you about the affect that all of this has had on real estate, and here's the answer:
Sales are down, rentals are up. This is my one sentence answer. But for interest's sake, let's break that answer down.
Sales are down for one proper reason. The inability to get a mortgage these days. After the crisis of 2008, the ability to attain a mortgage became incredibly more difficult. Gone were the days where a man who had 25,000 dollars in the bank could buy a 1,000,000 dollar house, and this is a good thing. The reason the market crashed in the first place was because nobody was able to pay the incredibly expensive mortgage they knew they could not afford in the first place. As a result of the crash, criteria for receiving a mortgage became very strict. Credit scores have to be close or near to perfect; your bank account has to look like it is under no threat of defaulting on the massive mortgage for your new home. What has happened is the exact reverse of what happened before 2008. Now no one can get a mortgage.
This is not the answer to the problem either. Because it is so difficult to get a mortgage now, all those who are actually able to pump money back into the economy from where it came are now taking that money and throwing it away on rentals. I am not saying that I advise against renting in the city. What I am saying is that a boost in rentals is not going to save the economy. What helps the economy is when people buy homes, sit on them for years, let them appreciate, and then sell them, making a handsome return, and getting an even bigger house, thus starting the process all over again. The fact is, that if you have made a smart real estate choice, and your property is guaranteed to appreciate, than no one is losing money. In fact, the buyer has only gained as opposed to month by month slowly draining their bank account to pay for the monthly rent.
So, is it smart to buy right now? Absolutely. When the market bottoms out, which it has, there is only one direction that things can go, and that is up. Look at Brooklyn. Just a few years ago, it was the alternative for Manhattanites that wanted a cheap alternative to Manhattan but still wanted to be close to the city. As a result, everyone had this idea right about at the same time and guess what, Brooklyn is now just as expensive as Manhattan. Now, just think about all those people who made the choice to rent in Brooklyn instead of buying. There money is gone, their rent has gone up, and they have nothing to show for it. However, those lucky few who actually bought there homes, made returns that are phenomenal. These people did not have a window into the future. They took a guess and crossed their fingers. Worse comes to worst, they take a loss on their apartment if the property somehow dips in value; however, in my opinion, it's best to gamble with that as opposed to paying 2500 a year for a two bed in Williamsburg over 5 years, only to find that you have nothing to show for it, GUARANTEED! That's 150,000 dollars down the drain. Is your 2 bed that you originally paid 1,000,000 going to lose that much value in 5 years? I doubt it. If it was in Montana I might say yes, but this is the bubble that is New York City. If it was my money, I'd buy and risk the loss I'd be guaranteed to take if I was renting.
So what's a safe investment? I'd think about an area that is relatively under priced now, and then look at what's going on in the neighborhood. Is there going to be a large construction project to revitalize the area? Buy something close! Think about 2nd avenue. That train construction is scaring people so far away from second avenue that the sales prices are really great right now. What's going to happen when that subways finished? Access will be easier, and I bet property values will shoot through the roof. What about Hudson Yards? Maybe you don't want to live in midtown, but this is not about want, this is about being smart and finding a good investment. Buy a condo near 10th or 11th avenue in high 20's or low 30's. It's going to be a steal, not only that. When the mass that is Hudson Yards is completed, it's going to be like a brand new Rockafeller center in the middle of no where. I bet by the end of it, you won't be able to find a decently priced apartment in the entire neighborhood. But you'll be alright, because you were smart and you bought, and now your 1 bed is going to sell for ordinarily 2 bedroom prices.
So is renting really that bad? No it's not. It may not be preferable but it's the best that most of us can do at the moment. But if your coming into my office, and your asking me for a 7000 dollar a month 1 bedroom, maybe you should think about buying.
If it was my money, I'd buy.
Monday, October 10, 2011
Finding the Perfect Agent
Hear we are again. It is about a month before your lease is up and you haven't even started to contemplate looking for apartments. The panic starts to set in. You start to believe that since you waited so long to start looking, that somehow, every vacant apartment in NY has vanished and you have to take the first one you see. It's at the point where you can't do the search yourself anymore, and you're going to need some outside help. "I've got to work with an agent," is the thought that strikes through your brain; however, you're worried. You've heard the horror stories about the agent that showed up an hour late, making the client wait in the rain, eating a slice of pizza when they showed up, talking on the cell phone the whole time, and then proceeded to show the single worst group of apartments you've ever seen in your life. Knowing all these factors, you are hesitant, but let me ease your hesitations...
Let's start very basically. The agent that you have decided to work with is a HUMAN! Yes, believe it or not, real estate agents come from the very same planet and same species that you do. Shocking, but true. They can be empathetic, understanding, and even helpful! A good agent should be all of those things combined; however, the most important characteristic of a good agent, is that they are a good listener. They should hear every requirement and wish for your new dwelling, in detail and catalog each bit of information either mentally, or physically. How can you tell if your agent is a good listener? Within the first 5 minutes of meeting. The agent should be spending most of that first meeting asking questions, and expressing curiosity in you, the client. If the first thing that happens when you walk into your potential new agents office, is they start to give you advice on what you should be looking for, then this is a bad place to start; especially given that the agent doesn't actually know you at all. Now that you've found the agent with the most potential, and seemingly the best listening qualities, it's time to tell your agent what you are looking for.
Am I going to tell you how to be a good client? Maybe. But moreover, I am going to tell you how to get the most out of your agent. First and foremost, your agent may be the best listener in the world, but there is no way they can read your mind. You may not be the most decisive client; in fact, you may have no idea what you want, but you are going to discover what you want the more apartments you look at. As you view each apartment, you are getting a taste for the inventory and what it has to offer. You are realizing what you would like and wouldn't like, and the picture is slowly coming into shape. The difference between finding what you want quickly, or slowly is up to you. How? Did you decide to tell your agent about what you are learning about apartments? Are you letting him know what you like and don't like? If so, excellent! With each apartment, at this point, it should feel like you are getting closer and closer to what you want. Or, have you not told your agent anything about the experiences you've been having? If so, odds are good that you are getting more and more lost as you keep searching, and your agent is feeling the same way.
The more you and your agent communicate, the easier it is going to be. Take the search seriously. Understand that this is not about finding you a phone, a tv, or even a car; this is about finding you a home.
Your agent is your representative in all things real estate. You should be able to trust them and understand that they are there to help and not to harm. Get to know your agent so there is a certain level of comfort. But always keep in mind that agents, especially buyer's agents, are never trying to force you to rent something you won't like. If your agent shows you something you do like, than you are far more inclined to take it.
Let's start very basically. The agent that you have decided to work with is a HUMAN! Yes, believe it or not, real estate agents come from the very same planet and same species that you do. Shocking, but true. They can be empathetic, understanding, and even helpful! A good agent should be all of those things combined; however, the most important characteristic of a good agent, is that they are a good listener. They should hear every requirement and wish for your new dwelling, in detail and catalog each bit of information either mentally, or physically. How can you tell if your agent is a good listener? Within the first 5 minutes of meeting. The agent should be spending most of that first meeting asking questions, and expressing curiosity in you, the client. If the first thing that happens when you walk into your potential new agents office, is they start to give you advice on what you should be looking for, then this is a bad place to start; especially given that the agent doesn't actually know you at all. Now that you've found the agent with the most potential, and seemingly the best listening qualities, it's time to tell your agent what you are looking for.
Am I going to tell you how to be a good client? Maybe. But moreover, I am going to tell you how to get the most out of your agent. First and foremost, your agent may be the best listener in the world, but there is no way they can read your mind. You may not be the most decisive client; in fact, you may have no idea what you want, but you are going to discover what you want the more apartments you look at. As you view each apartment, you are getting a taste for the inventory and what it has to offer. You are realizing what you would like and wouldn't like, and the picture is slowly coming into shape. The difference between finding what you want quickly, or slowly is up to you. How? Did you decide to tell your agent about what you are learning about apartments? Are you letting him know what you like and don't like? If so, excellent! With each apartment, at this point, it should feel like you are getting closer and closer to what you want. Or, have you not told your agent anything about the experiences you've been having? If so, odds are good that you are getting more and more lost as you keep searching, and your agent is feeling the same way.
The more you and your agent communicate, the easier it is going to be. Take the search seriously. Understand that this is not about finding you a phone, a tv, or even a car; this is about finding you a home.
Your agent is your representative in all things real estate. You should be able to trust them and understand that they are there to help and not to harm. Get to know your agent so there is a certain level of comfort. But always keep in mind that agents, especially buyer's agents, are never trying to force you to rent something you won't like. If your agent shows you something you do like, than you are far more inclined to take it.
Friday, September 16, 2011
Renting on a Budget...in the most expensive city in the country.
Let's start with the basics. What is the cheapest apartment in Manhattan, right now? It's a studio on 1st avenue in east Harlem, and it's currently going for $925 dollars a month. Now let's think about this. How did the landlord get to this price?
Firstly, you all should be aware that I AM NOT AN APPRAISER. It is not my job to give an expert opinion on the value of an apartment; however, I can guess as to how this apartment got to this price. There are several factors to consider when determining how much you might pay for an apartment in a single area:
1. Location
2. Apartment Size
3. Views
4. Customer Service (doorman or not)
5. Access (elevator or walk up)
6. Apartment Quality
These items are listed in order of most important to least important. Surprising isn't it? You might figure that the quality of the apartment itself might be the most or 2nd most important thing under normal circumstances. But this is not a normal city. This is New York.
Now, anyone who has heard, read, or learned anything about real estate will know the first three rules of real estate investment: Location, location, location. Tedious, yes; however, this is a fact of life. Costs are going to change depending on what area you want, especially in this city. Lets say you take that same exact studio, lift it up, and smack it straight down in the center of Central Park South. How much do you think the cost went up? 200? 400? 800 dollars? I'd say something more like $1500, and I'm being conservative. That would bring the price of this studio to around $2500, just by changing locations.
Now let's say that this studio also has a view of the park in it's new location, and it's on the 10th floor now in a building with a doorman and an elevator. The price just went to $3250.
The cheapest apartment on Central Park South right now is going for 2400 dollars. The price was just cut down from $2600. It's been on the market for almost 3 months. The average amount of time a rental is on the market is about 2 weeks. Why is this apartment not renting? Well firstly, I'm betting, is that it has no view. It states that it has a southern exposure. And if it's on Central Park South, with the Park on the North side, then it's easy to assume there is no view. Second, it's in a co-op which usually has other costs associated with the apartment having to do with common areas; therefore, you will be paying more than the listed price of 2400 dollars a month. Third, the other downside of living in a co-op is the board approval which is notoriously difficult to get approval for. Finally, if you had 2400 dollars, why would you want to live in a pre-war building with no view in a small studio, when you could get an apartment on the Upper East Side, in a modern building, in a large studio with brand new appliances and a great view for the same price?
I have said it before and I will say it again, Manhattan, if you are renting on a budget, is a borough of compromise. Don't be stubborn about what neighborhood you want to live in. Listen to your broker, they have seen things that are much better that might not be on the Upper West Side but they are great apartments.
At the end of November, my lease is up. I will be searching for apartments on a budget. I am an agent so I have all the listings in Manhattan available at my fingertips. What will I do when I conduct a search? I will select every neighborhood in New York. I will give my price range, and I will go to each of these neighborhoods and see what's available. My new apartment might be a combination of great location and good apartment, or good location and great apartment, or terrible location and exquisite apartment.
The overall point that I am trying to make, is that when many of my potential clients come to Manhattan from out of town, and they are upset that New York prices are so high, they try and ignore this fact and ask for things that simply do not exist. If your broker tells you that you cannot live in an area for a certain price, do not be offended. They're not trying to squeeze more money out of you (if they're a good broker), they are trying to help! Ask what neighborhoods they would suggest! Let them conduct a search and see what they can find! Agents are professionals in their field and will know the market better than you do!
This is why it is so important to find an agent that you like working with, and that you trust. Agents have the inside lines to great apartments, and you are going to want their help.
"What is the best neighborhood for the cheapest price?" My money is on the Upper East Side, they have some great apartments for low prices. But that's just my advice! Ask your agent what they think!
More to come...
Firstly, you all should be aware that I AM NOT AN APPRAISER. It is not my job to give an expert opinion on the value of an apartment; however, I can guess as to how this apartment got to this price. There are several factors to consider when determining how much you might pay for an apartment in a single area:
1. Location
2. Apartment Size
3. Views
4. Customer Service (doorman or not)
5. Access (elevator or walk up)
6. Apartment Quality
These items are listed in order of most important to least important. Surprising isn't it? You might figure that the quality of the apartment itself might be the most or 2nd most important thing under normal circumstances. But this is not a normal city. This is New York.
Now, anyone who has heard, read, or learned anything about real estate will know the first three rules of real estate investment: Location, location, location. Tedious, yes; however, this is a fact of life. Costs are going to change depending on what area you want, especially in this city. Lets say you take that same exact studio, lift it up, and smack it straight down in the center of Central Park South. How much do you think the cost went up? 200? 400? 800 dollars? I'd say something more like $1500, and I'm being conservative. That would bring the price of this studio to around $2500, just by changing locations.
Now let's say that this studio also has a view of the park in it's new location, and it's on the 10th floor now in a building with a doorman and an elevator. The price just went to $3250.
The cheapest apartment on Central Park South right now is going for 2400 dollars. The price was just cut down from $2600. It's been on the market for almost 3 months. The average amount of time a rental is on the market is about 2 weeks. Why is this apartment not renting? Well firstly, I'm betting, is that it has no view. It states that it has a southern exposure. And if it's on Central Park South, with the Park on the North side, then it's easy to assume there is no view. Second, it's in a co-op which usually has other costs associated with the apartment having to do with common areas; therefore, you will be paying more than the listed price of 2400 dollars a month. Third, the other downside of living in a co-op is the board approval which is notoriously difficult to get approval for. Finally, if you had 2400 dollars, why would you want to live in a pre-war building with no view in a small studio, when you could get an apartment on the Upper East Side, in a modern building, in a large studio with brand new appliances and a great view for the same price?
I have said it before and I will say it again, Manhattan, if you are renting on a budget, is a borough of compromise. Don't be stubborn about what neighborhood you want to live in. Listen to your broker, they have seen things that are much better that might not be on the Upper West Side but they are great apartments.
At the end of November, my lease is up. I will be searching for apartments on a budget. I am an agent so I have all the listings in Manhattan available at my fingertips. What will I do when I conduct a search? I will select every neighborhood in New York. I will give my price range, and I will go to each of these neighborhoods and see what's available. My new apartment might be a combination of great location and good apartment, or good location and great apartment, or terrible location and exquisite apartment.
The overall point that I am trying to make, is that when many of my potential clients come to Manhattan from out of town, and they are upset that New York prices are so high, they try and ignore this fact and ask for things that simply do not exist. If your broker tells you that you cannot live in an area for a certain price, do not be offended. They're not trying to squeeze more money out of you (if they're a good broker), they are trying to help! Ask what neighborhoods they would suggest! Let them conduct a search and see what they can find! Agents are professionals in their field and will know the market better than you do!
This is why it is so important to find an agent that you like working with, and that you trust. Agents have the inside lines to great apartments, and you are going to want their help.
"What is the best neighborhood for the cheapest price?" My money is on the Upper East Side, they have some great apartments for low prices. But that's just my advice! Ask your agent what they think!
More to come...
Thursday, September 8, 2011
Closing on a Rental
So, you've found the apartment you want. Excellent! After all the exhaustive searching, dealing with different brokers, etc., you've found a great apartment! So what happens next?
The first step to renting this apartment is putting down an application. What's an application? An application is a form filled out by the potential tenant, making your personal financial information available to the management company and/or landlord so they can make a decision as to whether or not you are financially viable to rent their apartment. You will usually be asked for your yearly salary, what your current occupation is, and how your credit is. They may even ask to view your bank statements if you are not currently employed, or if you are a foreign national. An application can cost anywhere from 50 dollars to 300 dollars.
Once you have put down an application and it has been accepted by the management company and/or landlord, there will be a small waiting period, usually around a week, sometimes less, and the apartment you are interested in will be held until your application is approved or denied. If it is approved, you can decide whether or not to go through with the lease signing, or decide to look elsewhere. You are not bound to the rental until you sign your lease!
How much time do I have to decide whether or not to put down an application on the apartment I really liked? It depends. But to be truthful, not long at all. I cannot tell you how many times I have had a client who absolutely loved an apartment, but waited to long to act. In New York City, great apartments go fast. Low budget, high budget, whatever your budget may be, great apartments go fast! If you find something you really like, act now. Forget about the cost of the application, and chalk it up to the cost of doing business, because all that hard work that went into finding that apartment, could be wasted very soon. I have taken clients out to see apartments they really like, and are ready to put down an application on, and while we were viewing the apartment, discussing whether or not the apartment is good or not, an application was being put down by someone else in the rental office. You don't have weeks to decide, or days for that matter. You have hours, or even minutes. Now this does not mean you should run around town, wasting money, putting down applications on everything you see; however, if you do find that one apartment, that as soon as you walk into a big smile comes across your face, and it just feels "right," act on that feeling. Don't sleep on it, that apartment will probably be gone by tomorrow.
Last, but not least, do not jeopardize losing the apartment that you like so much because your L-shaped couch won't fit in the living room. If you like the apartment, put down an application, and sell the couch. You are severely handicapping yourself by making it a requirement that all of your current furniture fits in your new apartment. It is difficult enough trying to find something you like, so don't add more struggle to your search by adding a living room that has to be big enough to accommodate ridiculously over-sized furniture to your criteria.
As I have stated before, Manhattan is a market of compromise. This is not Springfield, (add state here). Whether you believe it or not, Manhattan is the center of the real estate Universe. Everybody in the world wants to live here. It is on the list of the top 3 cities to live in, in the world. The point I am trying to make is that, there is always someone that is going to be hungrier, more excited, and more willing to take that great apartment for a reasonable price, than you are. The question is, are you ready to act sooner than them? Real Estate professionals have a saying in this city: "Apartments always sell." What this phrase means is that clients may come and go, but no matter what, an available apartment in New York will always rent or sell. So the next time you decide to sleep on it, instead of putting down that application immediately, take a step back, and ask yourself if you really want this apartment, because while your sleeping, someone else is acting.
More to come... Next Chapter... Renting on a budget...
The first step to renting this apartment is putting down an application. What's an application? An application is a form filled out by the potential tenant, making your personal financial information available to the management company and/or landlord so they can make a decision as to whether or not you are financially viable to rent their apartment. You will usually be asked for your yearly salary, what your current occupation is, and how your credit is. They may even ask to view your bank statements if you are not currently employed, or if you are a foreign national. An application can cost anywhere from 50 dollars to 300 dollars.
Once you have put down an application and it has been accepted by the management company and/or landlord, there will be a small waiting period, usually around a week, sometimes less, and the apartment you are interested in will be held until your application is approved or denied. If it is approved, you can decide whether or not to go through with the lease signing, or decide to look elsewhere. You are not bound to the rental until you sign your lease!
How much time do I have to decide whether or not to put down an application on the apartment I really liked? It depends. But to be truthful, not long at all. I cannot tell you how many times I have had a client who absolutely loved an apartment, but waited to long to act. In New York City, great apartments go fast. Low budget, high budget, whatever your budget may be, great apartments go fast! If you find something you really like, act now. Forget about the cost of the application, and chalk it up to the cost of doing business, because all that hard work that went into finding that apartment, could be wasted very soon. I have taken clients out to see apartments they really like, and are ready to put down an application on, and while we were viewing the apartment, discussing whether or not the apartment is good or not, an application was being put down by someone else in the rental office. You don't have weeks to decide, or days for that matter. You have hours, or even minutes. Now this does not mean you should run around town, wasting money, putting down applications on everything you see; however, if you do find that one apartment, that as soon as you walk into a big smile comes across your face, and it just feels "right," act on that feeling. Don't sleep on it, that apartment will probably be gone by tomorrow.
Last, but not least, do not jeopardize losing the apartment that you like so much because your L-shaped couch won't fit in the living room. If you like the apartment, put down an application, and sell the couch. You are severely handicapping yourself by making it a requirement that all of your current furniture fits in your new apartment. It is difficult enough trying to find something you like, so don't add more struggle to your search by adding a living room that has to be big enough to accommodate ridiculously over-sized furniture to your criteria.
As I have stated before, Manhattan is a market of compromise. This is not Springfield, (add state here). Whether you believe it or not, Manhattan is the center of the real estate Universe. Everybody in the world wants to live here. It is on the list of the top 3 cities to live in, in the world. The point I am trying to make is that, there is always someone that is going to be hungrier, more excited, and more willing to take that great apartment for a reasonable price, than you are. The question is, are you ready to act sooner than them? Real Estate professionals have a saying in this city: "Apartments always sell." What this phrase means is that clients may come and go, but no matter what, an available apartment in New York will always rent or sell. So the next time you decide to sleep on it, instead of putting down that application immediately, take a step back, and ask yourself if you really want this apartment, because while your sleeping, someone else is acting.
More to come... Next Chapter... Renting on a budget...
Tuesday, August 30, 2011
Using Your Time Wisely when Looking for Apartments
When people move to New York, the very first thing they assume is that there must be abundant housing. There should be a wealth of apartments to pick from in every size, shape, amenities, etc. There must be right? The city is gigantic! There are buildings as far as the eye can see! However, despite the appearance of a surplus of apartments, their actual availability is doubtful.
Lets make up a client, his name is Joe. He is looking for a 1 bedroom in midtown east, he has a Boston terrier and is looking for a move in date that is exact and immovable. His budget is 2500 dollars. So what happens next? He starts looking on craigslist. He sees an abundance of apartments in this range, almost a surplus if you will. "This is going to be easy," he thinks. But behind the hundreds of adds he sees there are some unrevealed truths. First of all, 50 percent of all the apartments you see are already gone, or have an application pending on them. Second, quite a few brokers have decided to list and re-list the apartments they are advertising for, with different descriptions. Third, 95 percent of all the pictures that you see on craigslist, are not going to be of the actual apartment.
After seeing a bunch of apartments through craigslist, and not being pleased with any of them, Joe is starting to get frustrated. This apartment search is starting to turn into much more of a hassle than he thought originally. He decides that he would be better off working with a real estate broker, someone who would do the work of finding apartments for him. However, before he continues to look for apartments, he has a decision to make.
"How do I choose a broker?" The first instinct for Joe is to work with one of the agents he met on craigslist, because it's easy, and he knows them already. This is a mistake. It's a mistake because he has, literally, the world of real estate available at his feet and he decided to go with the laziest option. In New York City alone, there are literally thousands of brokerages, big and small. Look up NY real estate brokers, read their websites, see if you can relate to a particular company. Choose someone that you want to work with. Whether they choose a big firm, small firm, popular, or barely known firm, the most important thing is finding an agent that is both personable and knowledgeable.
"What's the type of agent do I want to work with?" There are two types of agents in real estate: buyers agents (tenants agents), and sellers agents (listing agents). A buyers agent is exactly what it sounds like. The job of a buyers agent is to represent you in all things real estate. Their job is to do their best to find you exactly what you want, or close to it. They represent you. A sellers agent, is exactly what it sounds like as well. They represent properties, or building owners, or management companies, and their job is to get the highest price possible for a property they have been given the exclusive advertising rights to. When you have decided that you want to work with a particular agent, according to Department of State regulations, they MUST present you with an Agency Disclosure Form. This form is not a contract (as it will state at the very top) and it is not for the protection of the agent; it is for your protection. It is a non-binding understanding, clearly stating who the agent is working for. If they are a buyers agent, the agent will have checked off the box that says "buyers agent" or "tenants agent", and if they are a sellers agent, they will have checked off the box that says "sellers agent" or "listing agent." You have the option not to sign this form, in which case the agent will have to declare on a Department of State form stating why and when you did not sign it. Once again, this form is for your protection and not the agents! It is in your best interest to sign it.
Joe has chosen his agent, he's signed the disclosure form, and now he's ready to go out to see some apartments. Joe gives his agent his criteria for the perfect apartment for him, and now the job is up to the agent. Now, this is very important. You must give your agent at least an hour or even better, two hours notice before you would like to go on a viewing, even if they insist on immediately meeting. The nature of sales dictates that, even if they are unprepared, the agent (good or bad) will meet you at the drop of a hat; however, you are not using that agent to the best of their abilities. Unprepared, the agent will meet you, and simply take you on a tour of buildings that he's been to, and hope that there's something available that meets your criteria. This is not why you hired an agent. You hired an agent to show you specific properties, that they know meet your criteria. The way an agent does is this is by calling management companies in advance! By making appointments, keeping them, and by getting knowledge from these companies about the apartments you will be seeing. LET YOUR AGENT PREPARE!
So after all of this, it's finally time for Joe to see apartments. He likes some, he doesn't like others, and he's starting to get discouraged. Don't worry! If you have a good agent, that agent will speak to you constantly, figuring out your likes and dislikes. Stick with your agent! They're going to find you something you'll like! I promise!
After sticking it out, Joe finally finds the apartment he wanted. It may not be perfect, but after seeing so much of the New York inventory, he is perfectly happy with the apartment he's chosen. Now it's time to make an offer...
More to come... Next Chapter... the Closing Process.
Lets make up a client, his name is Joe. He is looking for a 1 bedroom in midtown east, he has a Boston terrier and is looking for a move in date that is exact and immovable. His budget is 2500 dollars. So what happens next? He starts looking on craigslist. He sees an abundance of apartments in this range, almost a surplus if you will. "This is going to be easy," he thinks. But behind the hundreds of adds he sees there are some unrevealed truths. First of all, 50 percent of all the apartments you see are already gone, or have an application pending on them. Second, quite a few brokers have decided to list and re-list the apartments they are advertising for, with different descriptions. Third, 95 percent of all the pictures that you see on craigslist, are not going to be of the actual apartment.
After seeing a bunch of apartments through craigslist, and not being pleased with any of them, Joe is starting to get frustrated. This apartment search is starting to turn into much more of a hassle than he thought originally. He decides that he would be better off working with a real estate broker, someone who would do the work of finding apartments for him. However, before he continues to look for apartments, he has a decision to make.
"How do I choose a broker?" The first instinct for Joe is to work with one of the agents he met on craigslist, because it's easy, and he knows them already. This is a mistake. It's a mistake because he has, literally, the world of real estate available at his feet and he decided to go with the laziest option. In New York City alone, there are literally thousands of brokerages, big and small. Look up NY real estate brokers, read their websites, see if you can relate to a particular company. Choose someone that you want to work with. Whether they choose a big firm, small firm, popular, or barely known firm, the most important thing is finding an agent that is both personable and knowledgeable.
"What's the type of agent do I want to work with?" There are two types of agents in real estate: buyers agents (tenants agents), and sellers agents (listing agents). A buyers agent is exactly what it sounds like. The job of a buyers agent is to represent you in all things real estate. Their job is to do their best to find you exactly what you want, or close to it. They represent you. A sellers agent, is exactly what it sounds like as well. They represent properties, or building owners, or management companies, and their job is to get the highest price possible for a property they have been given the exclusive advertising rights to. When you have decided that you want to work with a particular agent, according to Department of State regulations, they MUST present you with an Agency Disclosure Form. This form is not a contract (as it will state at the very top) and it is not for the protection of the agent; it is for your protection. It is a non-binding understanding, clearly stating who the agent is working for. If they are a buyers agent, the agent will have checked off the box that says "buyers agent" or "tenants agent", and if they are a sellers agent, they will have checked off the box that says "sellers agent" or "listing agent." You have the option not to sign this form, in which case the agent will have to declare on a Department of State form stating why and when you did not sign it. Once again, this form is for your protection and not the agents! It is in your best interest to sign it.
Joe has chosen his agent, he's signed the disclosure form, and now he's ready to go out to see some apartments. Joe gives his agent his criteria for the perfect apartment for him, and now the job is up to the agent. Now, this is very important. You must give your agent at least an hour or even better, two hours notice before you would like to go on a viewing, even if they insist on immediately meeting. The nature of sales dictates that, even if they are unprepared, the agent (good or bad) will meet you at the drop of a hat; however, you are not using that agent to the best of their abilities. Unprepared, the agent will meet you, and simply take you on a tour of buildings that he's been to, and hope that there's something available that meets your criteria. This is not why you hired an agent. You hired an agent to show you specific properties, that they know meet your criteria. The way an agent does is this is by calling management companies in advance! By making appointments, keeping them, and by getting knowledge from these companies about the apartments you will be seeing. LET YOUR AGENT PREPARE!
So after all of this, it's finally time for Joe to see apartments. He likes some, he doesn't like others, and he's starting to get discouraged. Don't worry! If you have a good agent, that agent will speak to you constantly, figuring out your likes and dislikes. Stick with your agent! They're going to find you something you'll like! I promise!
After sticking it out, Joe finally finds the apartment he wanted. It may not be perfect, but after seeing so much of the New York inventory, he is perfectly happy with the apartment he's chosen. Now it's time to make an offer...
More to come... Next Chapter... the Closing Process.
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