When you are looking to sell your home in NYC, you may think that it's a pretty simple process. Most first-time sellers believe that it is only a matter of listing their house for sale and they will immediately find a good buyer. Then, you'll just be collecting the cash and handing over the keys. However, in most cases, the process is a bit more complicated, takes more steps, and you just can't control everything. Between where your house is located to the actual demand for houses at the moment, many factors play a role.
Step #1: Set A Timeframe And Do Your Research Of Your Property:
While the time you need to sell your home depends on many different factors, you need to keep in mind that most houses take between 2 to 3 months to be sold after a fully executed contract. However, this only happens if you do some things ahead. For example, you could get a pre-sale home inspection to know any problem areas so you can fix them before you put your house for sale. Also, finding out about any potential issues like violations is CRITICAL before you list your property.
You can get a lot of information including mortgages, taxes, liens, violations, and more for properties located in Queens, Brooklyn, The Bronx, Manhattan, and Staten Island by:
1. Visiting http://www.oasisnyc.net/map.aspx
2. Entering your street address and selecting your borough then click “search”
3. After the property has been pulled up, look over to the left and click “Location report”.
4. In the “location report” section you’ll find basic information such as the owners on record, block and lot numbers, lot and building size as well as zoning information.
5. Scrolling down you will see links to the NYC Tax Dept., Dept. of Buildings, ACRIS ( listed as “ property transaction records”), this is where you can find recorded mortgages, liens, and even deeds to your property).
6. Click on any one of the links and you will be sent to the corresponding agency site with your property information usually already pulled up!
*UPDATE- Another great resource is www.lavamap.com this site is actually a bit better than the aforementioned Oasis map in its user-friendliness. Not only does the site give you access to all the information and agencies above, but it can also be easily accessed through your mobile device ( something that Oasis map has a bit of difficulty with), the address search bar is much easier to use and you can search right from the map and select any property for its info.
There is a free and paid version of this site. Honestly, if you know how to navigate the free version you'll be able to access more than enough information. Here is how to do that:
1- Visit the site , input the property address you want to look up ( You can also click "open map" on the bottom right and search through the map feature, really nice when you don't know the exact address).
2- After the property has been pulled up, You will see a page that has link tabs saying " Ownership etc... those links require you to use the paid subscription, However, if you just select "MORE" and then select "LINKS" it takes you to ALL the important agencies that I already mentioned for free.
Step #2: Consult With A Real Estate Agent Who Knows The Market:
If you hire a Licensed Realtor you will need to pay a fee to the agent but usually, it's worth it. The Typical fee to hire an experienced agent is usually 3-6% of the selling price. However, when your property is professionally listed, it will get more buyers, more buyers equals more offers and more offers tends to equal higher prices that can net more profit even with the Realtor’s fee INCLUDED. A Realtor will be able to list your property on the MLS ( Multiple Listing Service) which alerts ALL the other Realtors and buyers of your property. The realtor will also tap into his or her's network. This including other measures will ensure your property gets MAXIMUM exposure.
Finding a good Real Estate Agent who knows the market will allow you to find more interested buyers and even sell your home for a higher price. Besides, he or she will take care of all the negotiations and paperwork for you, the agent’s knowledge about potential pitfalls with your specific property might also be worth the commission alone. For example, a good Realtor will find out and solve issues like hidden liens, violations, secondary mortgages (you might be surprised how many sellers don’t know what mortgages they have on their properties), etc... Any of these issues and more can kill a deal that you worked hard to get even after you’re in contract.
A good Real Estate Agent who knows the Queens, Brooklyn, and surrounding areas of NYC will also know the zoning and potential land use of your property. If your property is zoned for commercial use you might be able to get more money than you thought and have a faster smoother transaction!
Step #3: Gather All The Paperwork (if you have it):
When you are selling your house, it is ideal to have some paperwork that might help things go more quickly. Some of the documents you might need to have with you include:
• Your home’s original purchase contract
• Property survey, certificate of occupancy, and certificates of compliance with local codes
• Mortgage documents
• Tax records
• Appraisal from your home purchase
• Homeowner’s insurance policy
• Home inspection report, if you did one
Step #4: Know Your Numbers:
As a seller, you need to know that you will have some costs associated with this deal, this will effectively determine your potential profit after selling your property. Besides the commission of the real estate agent which is usually between 3% and 6% of the home's sale price, you will also need to pay the government transfer taxes, county recording fees, attorney fees, and any outstanding liens. Keep in mind as of the writing of this blog, the New York City and State the transfer tax rates are:
N.Y State Transfer Tax:
· 0.4% for properties below $3,000,000.00.
· 0.65% for $3,000,000.00 and above.
N.Y City Transfer Tax:
· 1% for a sales price below $499,999.00
· 1.425% for a sales price above $500,000.00
· *Mansion (NYC) Tax for properties above $1,000,000.00 has a rate of 1% to 3.9% depending on the sales price. Keep in mind that in NY it is customary for the buyer to be responsible for the Mansion tax but it is not guaranteed.
Your general equation to determine your profit should look something like this:
Sales Price $_______
- Mortgage Debt (if any) -$_______
- Transfer Taxes -$_______
- Realtor Fee -$_______
- Misc. liens/violations (if any) -$_______
- Attorney/County Recording Fees -$_______
= POTENTIAL PROFIT = $$$$
Sometimes, other liabilities such as building violations that have monetary penalties MAY be able to be negotiated in the sale and assumed by the buyer but this is also not guaranteed.
Step #5: Consider Your Tax Implications:
Always consult with a CPA about your specific tax liability when selling a piece of property. Generally speaking, if the home your selling is your primary residence then you will be exempt from paying taxes on profit up to $250,0000.00 for single tax filers and $500,000.00 for married couples. Any profit over these amounts will then be subject to capital gains taxes. Again, consult with your tax preparer or CPA.
Step #6: Don't Make Upgrades That You Don't Need:
Many homeowners get stuck into this step because they believe that if the house isn't 100%, they won't be able to sell it. While this is, in part, true, it's important to keep in mind that some upgrades aren't really necessary and that you'll be just wasting money. Overall speaking, bathroom and kitchen updates tend to deliver higher returns. Just replacing old cabinets with modern ones or new paint can often do the trick without breaking the bank.
Step #7: Set A Realistic Price:
Arguably, this is the most important step. Your house is always special. After all, you spent some great years under that roof and have a lot of good memories. However, this shouldn't affect the price you set. You need to see exactly how much your house is worth. A good Real Estate Agent can help you determine a realistic price for it.
Step #8: Don't Forget High-Quality Photos:
When you are looking to sell your home, you need to make sure that you only use the best photos. They need to look professional and capture your home well. So, you should highly consider hiring a professional photographer who can work around your home and show its best angles. Most good Realtors include this free of charge to their clients and are even able to provide full virtual tours.
Step #9: Consult – Hire a Real Estate Attorney:
In New York, it is HIGHLY advisable that you consult and hire an experienced Real Estate Attorney (trust me, the potential buyer will have one and you should too). Not only will he or she help negotiate the terms of any contract that best suits your specific needs, a good attorney will also look at any legal issues that have to be addressed before you even list the property. For example, he or she will take a look at your deed and confirm you are currently within your legal rights to transfer ownership. This is a simple but also CRITICAL issue that must be addressed before you list your property. Step #10: Put The House For Sale:
Now that you're all set, it's finally the time to put your house on the market. The most important thing to remember here is to give your property maximum exposure especially online and to Realtors via your local MLS (Multiple listing Service).
During this step, you need to make sure that you try to keep your home as tidy and clean as possible. Ultimately, this will allow potential buyers to experience how they will feel if they buy it and may be more willing to make a bid. One of the things you should also consider is to have someone else showing the house. This way, potential buyers won't be distracted by you.
Step #11: Review And Negotiate All Offers:
After listing your home for sale at a realistic price for your market and getting some visits, it's normal that you start getting some offers. So, this is the time to meet with your real estate agent and decide if there is any you would like to approve or negotiate. Ultimately, when you get a bid for your home, you have 3 options: you can either accept it, reject it, or you can make a counteroffer.
But remember, all offers are not created equal, just because someone offers you more money doesn’t mean it’s the “best” offer. There are many things to consider such as the terms, the type of loan, the buyer’s down payment, and their flexibility.
For example You might have your house listed for $500,000.00. You have multiple offers including one over asking for $525,000.00 with the buyer using a loan and another for $495,000.00 that is all cash. You might be tempted to accept the $525,000.00, after all it's $25,000.00 over asking right? Not so fast…. You also have to consider the terms…
-Does the $525k buyer need any concessions? (money that the buyer will ask for from the loan to help with things like their closing costs) that will reduce your net profit from the $525k.
-What if the property does not appraise for $525,000.00? Let's say it appraises for $510,000.00, after all, it was listed for $500,000.00. Will this buyer be willing AND able to come up with another $15,000.00 out of pocket to continue the transaction?
If these or other concerns are present, you might just want to go with the more secure CASH transaction that requires no bank and can typically close much faster. Not to mention in this specific scenario you will also have a lower NYC transfer tax percent if you accept $495k vs $525k (addressed in step #4).
This is just an example showing that the offer price is only ONE thing to consider when looking at accepting any offer.
Step #12: Enjoy Your Next Steps In Life
Hopefully, your transaction was smooth and you got the money and terms you wanted for your property. At this point, you’re all set. If you did decide to hire a Realtor, an Attorney or Inspector and were happy with their service please give them a glowing 5-star review. It really helps us out a lot.
Hope this article helped and GOOD LUCK!
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