Benefits Of Owning
Unlike renting, a large portion of your monthly payment goes towards repaying your loan; thus giving you more ownership interest in your property. Once you sell, that money is paid back to you. You can think of building equity in your home as putting money away in a savings account.
Historically, real estate has long-term, stable growth in value. While short-term fluctuations are normal, home sale prices have increased on average 6.5 percent each year from 1972 through 2005, and increased 88.5 percent over the last 10 years, according to the NATIONAL ASSOCIATION OF REALTORS®. In addition, the number of U.S. households is expected to rise 15 percent over the next decade, creating continued high demand for housing.
Unlike rent, your fixed-mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that common charges/maintenance, property taxes, and insurance costs will increase but at a much lower percentage than rents.
- Tax Benefits
The U.S. Tax Code allows you to deduct the interest you pay on your mortgage, your property taxes, as well as some of the costs involved in buying your home. Additionally, when you sell your primary residence, you can deduct up to $250,000 ($500,000 for a married couple) from your profit prior to paying capital gains tax.
- Create the Home of Your Dreams
Home ownership allows you to renovate and decorate your home according to your personal taste and you can benefit from your investment for as long as you own the home.
Steps To Buying A Home
Buying an apartment is an exciting experience, but it can be stressful if not well-executed. At the Baddour Group, we strive to make this process as simple for you as possible. We will work with you every step of the way to:
1. Determine Your Purchasing Power
If you are planning to get a mortgage, we highly recommended that you speak with your bank or your mortgage broker to prequalify you for a mortgage. Learning about financing options and what you can afford before you start looking for a home will save you time, heartache and, in the end, will streamline the buying process.If you need help finding a mortgage broker, Baddour Group can put you in touch with mortgage brokers who will answer your questions about the actual loan process and determine a comfortable price range for you.
During this early phase of the loan process there are two levels of endorsement:
Pre-Qualified: Based on the information you provide during your initial conversation with a mortgage broker, you are potentially qualified for a stated loan amount, assuming full and accurate disclosure.
Pre-Approved: You will next provide your mortgage broker with information for a detailed background and financial check (including tax returns, credit check & income history). Your lender will then provide a letter stating the amount the lending institution would loan you. This commitment is generally valid for about 60 days. Note: Most sellers require buyers to provide a pre-approval letter with an offer letter.
2. Determine the Neighborhood
New York City has a wide variety of neighborhoods offering diverse and unique environments to their residents. Find a neighborhood that speaks to you and offers the amenities, “feel” and convenience you are looking for. Our Baddour Group agents are experts on the different neighborhoods of New York and can help you determine the area that best fits your needs.
3. Make a Wish List
It is important to make a wish list detailing what you would like to have in your new home. Start with the most important criteria.
Do you want a doorman?
How many bedrooms do you want?
How important is light and view to you?
Is a large kitchen a priority?
This list will help you narrow the search and will give you a good reference point if you are faced with indecision later in selecting a property.
4. Start Seeing Properties
The best way to find your new home is to physically go see apartments. The more apartments you see the better you’ll understand what you want. You might get lucky and find your dream apartment on your first day, or it may take several months. Your Baddour Group agent will be there every step of the way, helping you find the right apartment!
5. Make/Negotiate an Offer
Once you’ve found your apartment, the Baddour Group will negotiate and advocate on your behalf. This process typically takes 1-5 business days.
6. Sign the Contract of Sale and Escrow Deposit
Congratulations! Your offer has been accepted. You and the seller will need to sign a contract of sale. We will manage this process for you, which typically takes 1 to 10 business days
7. Finalize Loan Application
Your Baddour Group agent will advise you and help you prepare your Loan Application and obtain your Loan Approval and Commitment Letter. This process takes 3 to 6 weeks.
8. Prepare Board Package
Preparing and completing your Board Package according to the Board’s requirements makes your Board approval process easier. Your agent will help you complete and submit your Board Package. This process typically takes 4 to 6 weeks.
9. Finalize Closing Documents.
This is mostly performed by your attorney, mortgage broker, or bank.
10. Perform Final Walkthrough
Your Baddour Group agent will conduct the final walkthrough with you and identify any issues that may need to be resolved at closing.
11. Close on your new home!
The Different Forms Of Property Ownership
Before you start looking, it is important to understand the different types of ownership available to purchasers of Manhattan property.
Cooperative apartments or “co-ops” are owned by each building corporation. Residents purchase shares in the building corporation, which entitles them to occupy an apartment under a “proprietary” lease agreement. Each apartment is allocated a specific number of shares based on square footage, so the larger the apartment, the more shares that are owned.
Co-op shareholders pay a monthly fee called “maintenance” to cover building expenses including heat, hot water, insurance, staff salaries, real estate taxes and the building’s mortgage. percentage of this fee is tax deductible. This percentage varies from building to building.
Approval to purchase shares of a co-op must be granted by a Board of Directors, who also has the authority to determine how much of the purchase price may be financed and minimum cash requirements. In most cases, prospective purchasers must submit a "board package" containing detailed information regarding their income and assets. Most boards require an interview to review and discuss the materials submitted. Boards can approve or deny any applicant without giving a reason.
Subletting a co-op can be difficult, depending on the building. Each co-op has its own rules and these rules should be considered carefully. Your Baddour Group representative can guide and advise you as to which coop is right for you.
Condominium apartments are real estate interests owned by individual purchasers. Condominium owners are given an ownership deed when buying. Each individual apartment receives a separate tax bill from the city. Owners of a condominium unit pay a monthly fee to the building to cover staff salaries, building maintenance, and management fees.This fee is referred to as the “common charge” and does not include real estate taxes and is not tax-deductible.
The ease of buying a condo and the ability to sublet the unit, in many cases, makes this form of ownership a top choice for investors, international buyers, and parents purchasing for their children.
A condop is a residential cooperative where the ground floor (typically commercial units) is a separate condominium that is owned by a separate entity and not the coop. The residential units are a co-op and the commercial unit is a condo. The co-op does not receive the benefit of the income from the commercial units. Generally condops have more flexible rules than a coop, such as the ability to sublet. The rules vary from building to building.
Townhouse ownership is a "fee simple" ownership of real property. There are single-family and multi-family townhouses which can be divided and rented at will. The owner is responsible for payment of all real estate taxes, maintenance and repairs of the property.