Thinking of buying a condo....

old time brooklyn

...curious what are average costs in this area -- per month --- for things I don't pay now since I'm a renter:

1. Heat

2. Water

3. Property Tax

4. Homeowner's Insurance

Also, closing costs run more towards 4% than 2% it seems.

Any information is appreciated.

eastbloc

Heat and water are generally paid for out of your common charges. Homeowner's should cost around $1k give or take, depending on liability limits and any extra coverage you may have (i.e. for your meth lab).

Property tax will depend on whether the building has an abatement. Most new developments do, but some of the older ones have abatements that may expire or have already expired. The range will be from a few hundred to no more than a few thousand per year.

Closing costs in New York are higher partly because the state and city both want a taste. 4% is probably close to the average with a conforming loan. 5-6% with FHA.

whyfi

Take a look at the heating system in place at each residence - we have central air in each unit and they're gas, so it comes out of our pocket. Total cost would depend upon the average temp, efficiency of the heating unit, and how well insulated the condo unit is. In other words, it can vary - ask someone in the building, if possible.

Also, keep in mind the common charges. Low common charges are nice, but it doesn't mean as much if the building hasn't established a decent financial buffer for building maintenance issues - special assessments are no fun.

d_luxx

The water will be covered by common charges, but heat and hot water are usually separate. The cost will vary according to size, whether its gas or electric, and your usage.

Closing costs on a condo are around 3%, but if you are buying in a new development it will be as much as 6% because you will have to pay the transfer tax.

Homeowners insurance will also vary because its determined by the value of your property ( i.e. it would cost more to repair a three bedroom then a studio, so you would need more coverage ) I pay about $225 per year to insure my one bedroom.

Property taxes are determined according to the city's assessed value of the property. Tax abatements are common and usually last about 25 years, so if the building went condo or was built within that time frame the taxes will be low or non-existant.

Property tax and mortgage interest are tax-deductable, so as a homeowner, you can claim more deductions on your W-2, and have less tax withheld in order to put more money in your pocket each month to pay for it all.

my2cats

Condo is definitely the way too go, but there are so few of them. When I was searching to buy I only found coops and their maintenance fees were outrageous! A simple one bedroom had 800 dollars of maintenance fees around here.

whynot_31

Coops have higher monthly fees b/c heat and taxes are covered by the building, which is not the case with condos.

I'd expect to pay about $ 0.60 a sq ft a month for a coop that is actively maintaining itself.

....those with a doorman etc cost more

catwalkertexasranger

what everybody else wrote plus..reserve study..that is how much money the association has in the bank for planned as well as unplanned repairs and maintenance. There are 2 buildings on E.Parkway that have a special assessment for 10 years for @400 dollars a month for every unit!!! The common fees and regular maintenance are nice but if you have a building wide plumbing problem or structural issue like a new roof or drainage system expect to pay a few 1000 to remedy the issue..Also you need to look at the minutes of the board meetings..this is critical. You can see that people are proposing lets say,,firing the doorman and replacing him with an electronic access control system. Or that the garage door has had issues for 6 or 8 months and a new one may be in order..depending on the building 10-20k. Boiler issues..you get there on the tail end of an ongoing problem and will find yourself responsible for a nice lump of cash. The meeting minutes will also reveal how people get along..is there any big storm brewing from a young or old Tennent that doesn't like big dogs,loud parties,people locking their bicycles up,exterminator,ect. A change or lack of one in a preventive visit from the bug man is a good indicator of the building occupants.. if you read that people think no service is needed or once a month is excessive DON'T buy in that building .go see the building before or many times after you get the happy hand from the realtor..do your homework..ask the question directly to the realtor and title company Is the building being sued for anything? By anybody? do the have liens on the building? Do they owe taxes? Just ask it's your right to know. If you pay an agent 3-7% for "helping" you make sure they actually do

d_luxx

I hope I don't sound like a bitch, but I suspect that a few of the people chiming in on this thread do not have any first hand experience with the issue.

In New York State, you will need to hire a lawyer to represent you in the sale ( about $1500 flat fee ). The advantage to having one is that it is their job to investigate the points CatWalker mentions above as part of their "due diligence". They will let you know what they find before you sign the contract and fork over the downpayment.

Also, the buyer doesn't pay the agent - the seller does.

Buying your home is traditionally considered the best thing you can do for yourself financially...Start building equity for yourself instead of making someone else rich! I read a statistic recently that said, on average, people who have invested in RE in brownstone brooklyn have been able to double their money in 7-10 years. Congratulations on your decision and best of luck to you! :-)

booklaw

If possible, it would be helpful to have some idea whether your income approximates those of of the other co-op owners. If your income is much lower than theirs, you may have trouble paying your share of any monthly maintenance increases the other owners are happily able to pay to increase building services or improve the building structure. Conversely, if your income is much higher than theirs, you may become frustrated when the other owners refuse to fix the leak from the roof or replace the hot water heater or whatever even though the need for those repairs is perfectly obvious... The other owners just can't afford the fix.

In other words, you don't want to be the only librarian or social worker in a building full of doctors, lawyers, and bankers; nor do you want to be the only banker in a building full of clerical workers and schoolteachers.

bohuma

I think the answers will depend on the particular condo you buy, whether it is new construction or a resale, and what kind of abatement (if any) it has.

Two years ago we paid $640K for a new construction (it was the top of the market and nothing was negotiable), we paid around $15K in closing costs (we had to pay sponsor's taxes - these are now negotiable). Our maintenance is around $580, it includes a non-resident super, heat, hot water, cooking gas and water. Our apartment has PTAC units and we pay the electricity for the cooling cycle (av. $270 per month, over the full year, much more in summer, much less in winter). Our building has a 25 year tax abatement so our taxes are about $70 per month - you can look up taxes on the NYC Department of Finance website. Condo owners insurance costs us $756 for 2010.

old time brooklyn

Thanks for the information. Very helpful.

What are average common charges?

bohuma

Common Charges = monthly maintenance in my post. Therefore ours are $580 per month for 2011, which includes the maintenance on our deeded parking space.

whynot_31

The building I live in is a coop, and charges about $0.80 a sq ft for monthly maintenance.

So 1000 sq ft will run you about $800 a month.

800 ---> $640

etc.

the fee provides a resident super, hot water, taxes, heat, and cooking gas ....in addition to various overdue capital projects: roof, plumbing, electrical, etc

whyfi

Old Time Brooklyn said:

Thanks for the information. Very helpful.

What are average common charges?

It'll vary. Factors include: size of the unit, number of units in the building, age of the building and annual repair budget, building amenities (doormen, elevators, etc). Ours is <$400 for a new, small building with no doorman or elevator.

old time brooklyn

From experience, are there any closing cost line items that the sellers try to pass on to the buyer? Understood that transfer tax must be paid, but do they try to pass along other items by contract? Attorney fees, condo creation, etc. Anything that can be denied by buyer?

catwalkertexasranger

OTB yes the seller and their agents will try to defer some of the costs of the transaction. That is pretty standard. As long as the building and unit are good standing and don't have any major repair issues looming you will be ok. Check your loan amortization table to make sure that you are on a aggressive schedule. You want to be paying as much toward principle before the 4 or 5 year mark. There are lots of calculators online. The points.loan inception fees and title costs are some big numbers that you may want your bank/loan broker lay out for you in plain language. What is the dollar value of the points(if any) am I paying.? A rough number is 550-575 dollars per 100,000. So if you common fees are near that you have to qualify for that amount including the loan amount. So when you are looking around remember that 250 or 300 common fees get you a 50,000 dollar bigger better place to live. (example 300k apt w 550 common fees you need to be able to qual for 400k) You can and should ask everybody you are paying to reduce their commissions. Even if they say no ..ask. All the extra 1000's on the front end of the loan will make a difference and save you lots over the life of the loan.

Also you can take your income tax paperwork to an accountant or service and let them calculate how much tax you will pay(or not pay!) that will make you feel a little better before you jump into a 15 or 30 year grind.

d_luxx

Regarding the common charges: any listing you see advertised will list the common charges along with the asking price, so you will have that information from the beginning. It is a good idea to ask the seller or agent exactly what the cc's include. After looking around you will get a very good idea of what is fair, and be able to spot any "red flags". Why-Fi is correct that these will vary according to the building and its ammenities. Sometimes you see extremely high "common charges" (condo lingo) or "Maintenence" (co-op lingo) and it indicates mis-management in the building, but don't worry, you'll recognize when the charges are out of line after looking around a little.

Have you become pre-qualified for a loan yet ? Its free and a good idea because it gives you an idea of what you will be able to afford, and makes you look like a serious buyer to all who are going to work with you. When you get the Pre-Q, the bank will include a GFE, or "good faith estimate" of closing costs on your hypothetical loan. Then, when find your place and apply for the real mortgage, you will get a second GFE which outlines the itemized estimated closing costs. It is a good idea to have someone like an accountant or your RE lawyer look this over just in case. You won't know the exact dollar amount of your closing costs until a day or two before you close.

Transfer tax is only for new construction. By definition, this is charged when you are buying from a developer, or "sponsor", not when you are buying a "resale"

I recommend that you start going to open houses, and taking a look at prices and common charges. You will learn a lot more by getting out there and educating yourself then you are from a bunch of strangers on the internet.

whyfi

catwalkertexasranger said:

OTB yes the seller and their agents will try to defer some of the costs of the transaction. That is pretty standard. As long as the building and unit are good standing and don't have any major repair issues looming you will be ok. Check your loan amortization table to make sure that you are on a aggressive schedule. You want to be paying as much toward principle before the 4 or 5 year mark. There are lots of calculators online. The points.loan inception fees and title costs are some big numbers that you may want your bank/loan broker lay out for you in plain language. What is the dollar value of the points(if any) am I paying.? A rough number is 550-575 dollars per 100,000. So if you common fees are near that you have to qualify for that amount including the loan amount. So when you are looking around remember that 250 or 300 common fees get you a 50,000 dollar bigger better place to live. (example 300k apt w 550 common fees you need to be able to qual for 400k) You can and should ask everybody you are paying to reduce their commissions. Even if they say no ..ask. All the extra 1000's on the front end of the loan will make a difference and save you lots over the life of the loan.

Also you can take your income tax paperwork to an accountant or service and let them calculate how much tax you will pay(or not pay!) that will make you feel a little better before you jump into a 15 or 30 year grind.

Whether it's on the front or the back, you're paying origination fees. Everything else... well, don't worry about it - if you don't qualify for the loan, they'll let you know. Shop a little and find a Loan Officer that doesn't feel too slimy.

<--- former LO.

abby wenger

Living in a condominium is ideal for independent people. What I mean about independence is when that person needs got a job and needs a place within work's vicinity. Also, if a person prefers to live alone and financially independent, he could at least care to live in a condo unit. But if in the future you plan to have a family, I think starter home is more ideal.

Investments Vietnam

bohuma

In a competitive market anything and everything is negotiable, except condo common charges or coop monthly maintenance charges. Sponsors and coop boards will likely want to keep "price" high so sellers may be inclined to negotiate on other things like closing costs. In new construction, sponsors typically set a budget with artificially low monthly common charges, be prepared for some fairly hefty increases in the first few years as the board works out how much it costs to run your building and build the reserves required by Fannie Mae and Freddie Mac.

When the market was bullish, around three to five years ago, sponsors of new construction usually pushed their selling taxes to the purchaser. During the bear market of the last two years, buyers were able to get significant concessions from sponsors. The market is returning to normal according to the flyers I've been getting from real estate agents, so things are still negotiable, but don't expect to get the deal you could have got a year ago.