Williamsburg...The New West Village

The West Village has long been touted as one of the most desirable, and expensive, neighborhoods in the city, which is why it made me take note when several clients in the last few months have asked me for the West Village...or Williamsburg. With West Village dollars in hand, buyers are migrating at a quicker pace than ever to our fine neighborhood, and with Condo inventory down 29% year over year, buyer competition is pushing prices ever higher. The price per square foot for Williamsburg condos is up 16% year of over year in 2014, resulting in prices well over $1000/sqft and an average price increase of almost $200,000. At the same time, the price per square foot for a Williamsburg townhouse has dropped 3% year over year to an average of $681 per square foot. This competitive townhouse pricing, coupled with the large price increases for Condos make this the perfect time to make your move if you have ever dreamed of owning a whole building! Whether you are looking to trade up, or just move on, now is a perfect time to sell!

Townhouse Qualifiers

Many Brooklyn purchasers are considering a multi-family townhouse as a viable option with more living space, private garden area, storage in the basement and an additional unit generating rental income to reduce their overall out of pocket monthly expenses. The first order of business is getting pre-approved for this type of transaction because there are different requirements for conforming (under $625K) versus non-confirming (JUMBO) loans. One consideration is the down-payment requirements for 2 versus 3 family homes. Typically 3-family townhouses  require a 25% down-payment, a little more than the normal 20% down-payment. Also, the buyer’s ability to use rental income in order to qualify depends on the size of the loan too. Lenders will use the rental income if a conforming loan, however on a JUMBO loan, the requirements are tougher. In order to show the use of rental income, the buyer will have to show a history of managing rental properties with two years of tax returns supporting the claim. An exception may be considered with strong credit and post-closing liquidity. 

Earnest Money Deposit

Earnest Money Deposit is a confusing term for many buyers and sellers. Who gets it? What is it? Basically, it's a check to ensure the seller that the buyer is actually "earnestly" intending to purchase the home. Some sellers think that if the deal falls through, the earnest money deposit is automatically forfeit. Some buyers think that if the deal doesn't close, they automatically get the money back. Neither one is true. Even when the failure to close is the buyer's fault, the seller doesn't have a "right" to the deposit as a way to "punish" the buyer. Nor does the buyer automatically get the entire deposit back, even when they are not at fault.

Getting Pre-Qualification vs. Pre-Approval Letter

Knowing the difference between getting pre-qualified for a loan, and pre-approved for a loan equips you to have the right information at the right time. Getting pre-qualified for a loan gives you an idea of how much you might qualify to borrow. You have not actually applied for a loan and the lender has only your word with respects to your income, assets and liabilities. This information has not yet been verified and the loan amount is in no way guaranteed. You may be given a pre-qualification letter stating you will likely to be approved.

Getting pre-approved means that your information has been checked and verified. The mortgage lender may also have pulled your credit report to learn about your credit history and credit-worthiness. Getting a pre-approval letter means that you are likely to be approved for a mortgage and also states the amount for which you may be approved. It carries much more weight than a pre-qualification letter.

Many things can happen during the process-so it's important to remember that you are not guaranteed to get a mortgage if you are pre-approved or pre-qualified.

Homeowner's Insurance

Many people are concerned about the question why a homeowner insurance is so important. The most important aspect is that if you don't have an insurance, you'll be responsible for protecting your home and property all on your own. If there're any damages to your home or other structures on your property, a homeowner insurance can provide you with money to repair your home, to rebuild your home and also to replace lost or damaged property. You should be aware of the fact though, that a homeowner insurance compensates you for many types of damage but there're some exclusions, such as wear and tear, flood, earthquake, earth moving and nuclear hazard. Furthermore, home insurance may also include personal liability insurance, so if someone is injured or you damage property that belongs to others, you won't be held legally liable, because the homeowner insurance may provide liability coverage.