The key to a successful sale is to eliminate any surprises from the beginning to create a seamless process for you and your broker. Knowledge being power, you want to arm yourself with as much market data and building information as possible. Also, have a clear grip on your personal finances as they relate to the property. Finally, be ready to present your property in the best condition.
Find a Good Broker:
- To start, finding a broker is the most important part of selling your home. You should look for someone you enjoy working collaboratively with on a daily basis. Interview a few brokers and make sure your personalities match. Your broker should also have a clear grip on the state of the market and be able to give you basic information about your building in the first meeting. From there, your relationship should flourish into a successful transaction.
- Know what has sold in your building over the last few years.
- Review the comparable market analysis with your broker so you are educated about value.
- Determine the best time of year to bring your property to market with your broker. You want to be competitive and maximize your exposure.
- Flip Tax: Find out if your building has one and who pays it.
- Mortgage: Know the amount of the mortgage on the building and its terms.
- Reserve Fund: Know what is in the building reserve fund as it relates to cash on hand.
- Special Assessments: Ask if there are any special assessments planned.
- Approved Lenders: Find out the banks that have approved the building for lending. This is very helpful for perspective purchasers.
Structural- Building and Apartment:
- Construction: Know if there is any planned in the near future before or after you sell.
- Local Law 11: The law requires structures over 6 stories be professionally inspected every 5 years to make sure the façade is secure. Inquire if the building is compliant.
- Structural: Ask when the roof and mechanicals were last replaced or updated.
- Renovations: Be aware of any renovations that may hinder a potential purchaser from renovating the apartment.
- Legal: Tell your broker if there are lawsuits or bed bug issues and how they are being dealt with.
- Equipment: Make sure all your appliances including windows, plumbing, and electrical are in working order.
- Leaks: Be prepared to discuss any leaks that may have occurred because the buyer’s attorney will ask it to be disclosed in a rider.
- Managing Agent: Make sure the managing agent knows that you are selling your property to be in compliance with any building rules on marketing, etc.
- Transfer Cost: Confirm the amounts of associated transfer cost and who pays them.
- Financials: Get the last two years financials and offering plan as the broker will need to give them to the buyer. Alteration Agreement: Get a copy of the alteration agreement from the managing agent for the buyer to review in case they plan to do a renovation.
Seller’s Closing Cost:
- Broker Commission: 6% of purchase price
- NYC Real Property Transfer Tax: 1% of purchase price if $500,000 or less 1.425% of purchase price if over $500,000
- NYS Transfer Tax: 0.4% of purchase price
- Attorney: If you do not have an attorney, ask your broker for a list of at least three NYC Real Estate attorneys. They will discuss fees with you.
- Move Out Deposits: These vary per building but there is normally a non-refundable and a refundable fee. NYS Capital Gains Tax Withholding: The tax for out of state sellers is 7.7% of gain.
- Loan Balance: Get the amounts of your loan payoffs and who you are writing the check to.
- Capital Gains Taxes: For a single individual there is no tax on gains up to $250k and a married couple is $500k in gains. Speak with your accountant for a more in-depth explanation.
*Discuss with your broker and banker if you need to sell in order to buy. That may mean you will need a bridge loan, a holdover agreement, or a lease back.
- If you are relocating find out what expenses are covered by your company versus those that are personal. Since the agreement can be very complicated, find out how your broker and closing costs are paid.
ie: The relocation company may step into the role of the seller and assume the sale and its fees after a buyer is found.
Preparing to List:
- Minimize: The easiest way to prepare your property for sale is to pack up and store clutter, clean out closets and cabinets and minimize the amount of furniture in each room. It will help to define the space and make it feel larger. Organize: Once you have minimized, you should organize all the remaining furniture and accessories to give the property a lived in feel but make it look like a show piece.
- Glamorize: Finally, a fresh coat of paint or newly buffed floors can make a world of difference when it comes to presentation. Everything should look clean and updated.
- Staging: When your budget allows, hiring a professional stager can drastically increase your chance of selling quickly and at the highest and best price. We are visual creatures and pretty always wins!
Note: The consumer today is very educated. They have been in the market for some time looking for a property and most are ready to buy. Because of low inventory, multiple bid scenarios are happening on many properties. This does not mean a property is underpriced – it means it is priced well and the educated consumer is ready to move when they see what they want at the right price.
Jarrod Guy Randolph