Buying a Pied-à-Terre

Are you considering buying a part-time residence, or “pied-à-terre”, in New York City?  New York is a fantastic place to do more than just “visit”, and owning your own place – without the hassle and expense of a hotel – may be just the right thing for you. 

There are many things to consider and it is important to understand all the factors that affect what, where and how you buy your pied-à-terre.  Some of the more important elements are:

1.  Location.  What neighborhoods best suit you?  Is transportation convenient?  How about restaurants, shopping, museums and the theater? 

2.  Ownership.  New York primarily offers condos, co-ops and private buildings as buying choices.  In most cases co-ops will not work for part-time residents.  You must understand the differences and the pros and cons of each choice.

3.  Financing.  At the time of this writing, mortgage rates are currently at record lows.  Lenders often have different requirements for part-time residents, particularly those who live overseas.

4.  Income/Expenses.  Are you planning to rent out your pied-à-terre?  Do you know what fees, taxes and expenses you will incur?

The list above is not comprehensive and each point above could easily be expanded to a separate blog post, but it is a start.  Because of all the details and the fact that you most likely aren’t intimately familiar with New York real estate, it is vital that you speak with a knowledgeable broker to walk you through the process and help you achieve all your goals.  I recommend that you call or e-mail me if you’re interested in finding out more.  I’m happy to help.  You can find my contact information here.

Reach me at: michael.sussilleaux@gmail.com

Why Do You Want to Rent in New York City?

I was going to write a treatise encompassing everything there is to know about renting in New York, but I quickly realized that the topic is way too large for one post.  Instead I want to start with the "why" of renting because it directly affects the best course of action for you to pursue to reach your goals.

Example 1: You live in another city, and you're transferred to NYC.  You have to start working here in 2 weeks.  Your company will put you up in a hotel for a maximum of one month -- but politically you don't want to overstay your welcome on their dime.

The "why" in this example is obvious, but what's important are the constraints that accompany the "why".  You have to find a place, and you have to find it quickly.  You're expected to be at the office, so you have to optimize your time spent looking at apartments.  You don't have a lot of lead time, so it's unlikely that you'll have the pick of the litter since the best apartments are often listed a minimum of one month prior to the earliest occupancy date.  You don't have much time, you have to get in as soon as possible.  You're most likely going to have to compromise in the interest of speed.  You also have to have all your paperwork in order and ready to go, since you will have act quickly to lock up a place once you find it.

Example 2:  You live with your parents in an upper-middle class suburb.  You just graduated college, and your first job is with a non-profit downtown.  It's time to strike out on your own and live the hipster life you've always dreamed of.

Again, the "why" is clear.  Nevertheless, there are some real problems to work through.  First, do you earn enough money to afford the apartment you want?  Landlords typically require 40 times the rent in annual base salary.  For a $2,000/month apartment, that's $80,000.  If you don't make that, you will most likely have to ask your parents to act as guarantors.  On the bright side, you don't "have" to move before midnight tonight, so you can be more particular in your search.  If you find a great place that's only available two months from now, it could still work for you since you have shelter (however inconvenient).

The point of these two examples is to illustrate that every situation is different, and everyone will have flexibility in some areas, and severe constraints in others.  It is important for you to realistically and honestly analyze your own financial situation, time frame and expectations before you hit the bricks.  The most successful renters are adaptable to the ever-changing rental market and they know exactly what they can, and cannot afford.

Conversely, the least successful would-be renters are prisoners of their own flawed idea of how things "should" work and refuse to accept evidence to the contrary.  If you're frustrated, still looking for that perfect place, and you've been through a number of "incompetent" brokers, it may be time to revisit your initial assumptions.

Reach me at: michael.sussilleaux@gmail.com

What I Want

"You aren't listening to me!  Why can't you find me what I want?"

This is a fairly common complaint with some buyers and renters.   I'm always delicate in how I respond to clients who ask this, because this question runs much deeper than one would think.

The truthful answer -- which I am very unlikely to respond with in such direct terms is...

"Yes, I am listening to you, and the reason we can't find what you want is that it doesn't exist."

More often than not, this is an expression of frustration that ones' budget is not up to the level of ones' desires.  Most buyers experience this unpleasantness to some extent, but most people come to terms with the reality of the situation and adjust their search criteria accordingly.   The people who seem to have the most trouble accepting the limitations of their desires tend to be people from outside New York City who must adjust to a very different market than they're used to.  Many of these people are very successful and are used to being among the "well-to-do" of their home region.  It can be very difficult to accept the fact that a one-bedroom apartment can possibly cost as much as a 5 bedroom McMansion with a 3 car garage back home.

I honestly sympathize with people in this regard, and I understand that there is an education process in learning the specifics of a new market.  Most people come around sooner or later, but there will always be that one person digging their heals in and insisting that...  "You aren't listening to me!  Why can't you find me what I want?"

Sometimes you just have to wish a client the best of luck and acknowledge that you are unable to provide the service they require, bid them a genuinely fond farewell, and recommend that they engage another brokers' services.

Reach me at: michael.sussilleaux@corcoran.com

Deliberately uninformed, relentlessly so [a rant]

This is a post from "Seth's Blog", which I highly recommend to anyone in any industry.  Check it out at http://sethgodin.typepad.com.

"Many people in the United States purchase one or fewer books every year.

Many of those people have seen every single episode of American Idol. There is clearly a correlation here.

Access to knowledge, for the first time in history, is largely unimpeded for the middle class. Without effort or expense, it's possible to become informed if you choose. For less than your cable TV bill, you can buy and read an important book every week. Share the buying with six friends and it costs far less than coffee.

Or you can watch TV.

The thing is, watching TV has its benefits. It excuses you from the responsibility of having an informed opinion about things that matter. It gives you shallow opinions or false 'facts' that you can easily parrot to others that watch what you watch. It rarely unsettles our carefully self-induced calm and isolation from the world.

I got a note from someone the other day, in which she made it clear that she doesn't read non-fiction books or blogs related to her industry. And she seemed proud of this.

I was roped into an argument with someone who was sure that ear candling was a useful treatment. Had he read any medical articles on the topic? No. But he knew. Or said he did.

You see a lot of ostensibly smart people in airports, and it always surprises me how few of them use this downtime to actually become more informed. It's clearly a deliberate act--in our infoculture, it takes work not to expose yourself to interesting ideas, facts, news and points of view. Hal Varian at Google reports that the average person online spends seventy seconds a day reading online news. Ouch.

Not all books are correct or useful. Not all accepted science is correct. The conventional wisdom might just be wrong. But ignoring all of it because the truth is now fashionably situational and in the eye of the beholder is a lame alternative.

I know this rant is nothing new. In fact, people have been complaining about widespread willful ignorance since Brutus or Caesar or whoever invented the salad... the difference now is this: more people than ever are creators. More people than ever go to work to use their minds, not just their hands. And more people than ever have a platform to share their point of view. I think that raises the bar for our understanding of how the world works.

Let's assert for the moment that you get paid to create, manipulate or spread ideas. That you don't get paid to lift bricks or hammer steel. If you're in the idea business, what's going to improve your career, get you a better job, more respect or a happier day? Forgive me for suggesting (to those not curious enough to read this blog and others) that it might be reading blogs, books or even watching TED talks.

As for the deliberately uninformed, we can ignore them or we can reach out to them and hopefully start a pattern of people thinking for themselves..."

Reach me at: michael.sussilleaux@gmail.com

What's a "Walk-Through"?

What is a "walk-through", and why is it important?

A walk-through is a physical "inspection" of a property performed by the buyer just prior to the actual closing. Since it often takes months from the time that the buyer has last set foot in the property to the time of closing, a walk-though is an opportunity for the buyer to make sure that the property is in a condition consistent with when they last saw the property. It's a final opportunity just prior to closing to ensure that there is no egregious damage to the premises.

Note that the word "inspection" in the last paragraph is in quotes. Therein lies the rub.

Recently I had a walk-though where the buyer came in with a team of helpers and tested every appliance, the plumbing, all the electrical sockets, the windows, window coverings and inspected the walls, floors and ceilings for imperfections. Naturally this person wanted to make sure that she was getting everything in working order -- which is understandable. (By the way, everything was fine, and the closing went smoothly).

What isn't fine with the "fine toothed comb" approach is that in New York City, properties are generally sold "as-is". This means that if the chandelier didn't work when you signed the contract, there's no requirement for it to work now, just before you close on the property unless you specifically made contractual provisions for it to be fixed. The walk-through is not an engineering "inspection" to compile a punch list of things to be fixed by the seller. (In the special case of purchasing new construction, there really is a punch list, but not in the far more common resale of an existing apartment)

Had this woman found pinholes in the walls from picture hangers, faded paint or stains that were covered up by rugs, inoperative lighting fixtures, non-working air conditioners and almost anything else you can think of, she would most likely NOT be entitled to have the seller remedy these problems or compensate her in any way since the purchase is "as-is". This is a surefire way for there to be bad feelings and resentment at the closing table, and is most certainly not the way you want to begin life in your new home.

All this pain can be avoided. The time for this kind of detailed inspection is before the contract is signed, not after. Check the property out thoroughly before you sign on the dotted line! The walk-through is to verify that there is no unreasonable damage that wasn't there when the contract was signed and to ensure that there is a working smoke detector in the property. (The buyer must sign an affidavit that there is a working smoke detector at the closing, so I always make sure I call attention to it during my walk-throughs)

It is the responsibility of the real estate broker to educate their customers about what to expect from a walk-through. There's nothing "evil" about the sale being as-is, but it's important to know how you can meet all your expectations about what you're buying. Education makes all the difference.

Reach me at: michael.sussilleaux@gmail.com