In this week's 'Ask an Agent' column, the real estate experts at TripleMint--a tech-savvy brokerage that gives buyers and renters access to the same database of listings used by the city's real estate agents, and pays their agents bonuses for client satisfaction--turn their attention to a key question for buyers new to the NYC market: when you're scoping out a potential apartment, what are some positive signs about the building, and which ones should be considered red flags?
Q: I've never bought in an apartment building before. Are there any particular factors I should be cautious about? What red flags should I be looking out for?
“If you’ve ever tried to buy an apartment in NYC, I’m sure you know that it can be a bit of a juggling act. Still, between finding the right real estate attorney, making sure your co-op board’s up to scratch, and exchanging those 'you’re my competition' looks with that couple you keep running into at open houses, you should also be taking the time to look out for certain red flags.
One of these red flags is construction. Over the long term, construction in a neighborhood will generally have a positive effect on property values. In the short term, however, nearby construction can mean months, sometimes years of the not-so-soothing sounds of high powered machinery in the morning, not to mention scaffolding, dust, and other general unattractiveness around your building. As for the building itself, if it has repeated complaints or violations, it’s fairly safe to say that the building has some issues.(For the most part, the Department of Buildings will have any information you would need to assess the building's complaints and violations, but if you move forward without checking the DoB your attorney should find these things during their due diligence on the building.) Pending litigation within the building can also be a warning sign, and can even sometimes prevent you from taking out bank loans. One final note: Use your eyes! Things like cracks in the walls and ceilings can be indicative of more serious structural and maintenance issues, and should not be taken lightly. If you’re working with a good broker, they should be all over these types of things, so choose wisely!” - Chris Lee, Senior Real Estate Associate
“When I work with buyers, I always advise them to pay special attention to two things: the building’s financial standing, and the building’s upcoming assessments. These are both things that your real estate attorney (as well as any truly capable broker) should look for as they review your contract. They may advise you to consider a different listing if the financial standing or reserves of the building are questionable, or there’s some sort of major upcoming or lingering assessment (capital improvement) for the building.
Both of these factors (upcoming assessments and/or low financial reserves) could mean a major financial burden for buyers--firstly because they would incur a share of those costs, and secondly, because they would be susceptible to major surprise increases in their monthly maintenance fees. I also recommend asking about the sublet policy, maintenance fees, and the tax deductions available on those fees." - Taylor Travaglione, VP of Sales
"When purchasing into an apartment building, keep in mind that cooperatives and condos are forms of community living. Each owner is responsible not only for their own apartment, but also for the rest of building. To that end, you might prefer to buy in a property where tenants are more actively engaged with collective maintenance and the like.
I’ve found that there are often ways to identify these properties before you move in. Keep an eye on the common spaces (lobby, hallways, elevators, etc.). Are they clean? Is there damage? Are any repairs necessary? If building amenities are an important consideration for you, ask to see them, and pay attention to their upkeep and cleanliness. If possible, ask to see the basement and garbage/recycling areas. A clean and well-ordered waste area can be a sign of a well-run co-op/condo. A messy or dirty waste area could be a red flag that the building is not paying enough attention to the day-to-day operations of the building. Is there a live-in superintendent, and, if not, is the super at the building daily or "on-call"? Use your eyes, ears, and nose while inside a building. That first-hand experience can go a long way in making you feel comfortable moving forward on a new home.
On a more technical note, I also always advise checking out some of the building's board notes and other official documentation. Are there any upcoming assessments for repairs or capital improvements? If so, when does the assessment expire? And if not, have any upcoming capital improvement projects already been funded? Ask to see the most recent building financials. A good broker should be able to review the financials with you, and point out any red flags or areas of concern that may require additional information. As part of their due diligence during the contract negotiations, your real estate attorney will also review all the co-op/condo documents and will be able to explain to you the current status of the building from a financial, as well as physical perspective. ” - Jeff Harris, Senior Real Estate Specialist
TripleMint is a technology-enabled real estate brokerage that is the refreshingly simple way for New Yorkers to buy, sell and rent apartments.