FAQs
Real Estate Questions: Answered
Don’t see the info you’re looking for? We’ll be happy to answer any questions.
Your Top New York Real Estate Questions: Answered
As brokers, we often get asked several questions about New York City real estate, so we compiled our most asked questions to give you some more insight into the NYC world. We hope you learn something new!
NYC Sales
“‘Salesperson’ and ‘agent’ are interchangeable, though in New York, the Department of State uses ‘salesperson’. A real estate salesperson is someone who has completed the state’s 75-hour approved qualifying education course, and passed the state and school exam.
Brokers and associate brokers must take an additional 45-hour course 150-minute exam, to get their broker’s license, which allows them to own a brokerage and be legally responsible for its activity. Before attempting a broker’s license, a salesperson needs at least two years experience as a licensed salesperson or at least three years of experience in the general real estate field or a combination of both, plus they must meet a minimum number of points required for the experience type. However, not every salesperson applies for a brokers license, even if they’ve been in the industry for more than two years. Applying for your brokers license is optional.
For the day-to-day job, a licensed salesperson and licensed broker can both assist clients. There’s no effective difference.”
“Both are monthly fees paid by owners. When you live in a co-op, you pay maintenance fees, and when you live in a condo, you pay common charges. For both types of buildings, monthlies cover the costs of running the building (like staff and building upkeep). But they diverge from there.
In a condo, You own your place, and your monthly common charges pay for the upkeep of common areas and amenities. But your property tax is paid separately—it is not a part of your common charges.
In a co-op, you become a shareholder with a proprietary lease that entitles you to occupy your apartment. Your monthly maintenance fee pays for the building’s operating costs, any underlying mortgage, and importantly (unlike condos) includes your property taxes.”
“Condops are mixed-use co-op buildings with commercial or non-residential space on the ground floor. As a result, they will have multiple boards. First, there is a condominium board, comprised of representatives from both the residential co-op unit and the commercial space, who deals with issues pertaining to the general common elements of the condominium such as exterior repairs, or major plumbing repairs. The second board is the commercial board, which governs issues covered to the commercial units. The third board is one elected by the co-op members and it deals with shareholder issues specific to the residential space, like common hallways, or laundry rooms.
Condops were a category of housing created by owners and developers in the 1980s who wanted to get around a tax rule that said co-ops could not earn more than 20 percent of their income from non-residential or commercial spaces. If the figure went over 20 percent, the shareholders couldn’t take advantage of certain homeowners’ tax deductions. To fix that, owners and developers divided their buildings. The commercial space was designated as one condo unit and the entire residential section was considered another and was then divided into co-operative shares.”
“It’s a legal document that lays out a building’s legal use and occupancy, meaning if it’s zoned for commercial or residential use, and how many residences are allowed at that address. There’s also a document called a Temporary Certificate of Occupancy, which means a building is safe to inhabit but still has some outstanding work to do or permits to obtain before a C of O is granted. Without them, no one can legally occupy a building!”
“It’s a popular tax deferral program which allows you to avoid paying capital gains taxes when you sell an investment properties if you reinvest the money in a similar property within a tight timeframe. The investment property needs to be exchanged for a similar kind of property but it’s possible to exchange a residential property for commercial. It’s also possible to use the 1031 exchange if you are selling a vacation property, but most likely, you’ll need to have rented it out as an investment for at least six months prior to the sale in order to qualify.
In order to comply with the rules, you will have to identify a property you want to buy within 45 days of the sale of your qualifying apartment. The next deadline is closing on the purchase of your replacement property within 180 days of the original sale. In between the sale of your first property and the closing on the second, your profits need to be in escrow with a real estate attorney.”
“A COI is just proof that the business you are dealing with (contractor, moving company, etc.) has insurance in case something goes wrong. It confirms that a company has an insurance policy that covers liability and loss up to the insurance limits required by your building, so if anything happens while they are doing work in your building—such as damage or an injury—the cost of repairs or the accident is covered.
Typically, your building will have a form that is already filled out with the insurance coverage limits required. Your contractor or vendor can contact your management company directly to get the form. The completed COI form then needs to be sent to your building manager or management company at least a day before scheduled work or delivery. If you live in a building with a doorman or a hands-on super, it’s very likely that your move/delivery/repair will not happen with a COI.”
“Pied-à-terre is a French phrase that means ‘a foot on the ground.’ It’s used to describe an apartment that is not an owner’s primary residence. It’s usually their second home or vacation home.”
“The REBNY Financial Statement is a form that shows a buyer’s finances to the seller’s listing agent or the building’s co-op/condo board. With co-ops, it’s also what starts the negotiation process for the purchase, by allowing the seller’s agent to see whether the buyer has the right balance of income and debt to be presented to the co-op board. If you’ve ever purchased in a co-op or condo, you’ve likely filled one out.
The spreadsheet is fairly straightforward but needs to be accurate and up-to-date. There are separate sections for income and debt, liquid accounts and retirement accounts and sections to fill out if you own additional properties. The debt-to-income ratio is one of the most important factors, as well as the amount of liquidity you have and how much you will have after the purchase.”
“The vast majority of NYC condos and co-ops will have house rules. Typically, they deal with issues like where bikes should be stored, where stroller and umbrellas can live, how a recycling program is managed, or what the rules are on takeout deliveries and flyers. House rules are different from a co-op’s proprietary lease and bylaws, which focus on corporate governance and how the board operates. A condo also has bylaws addressing how the building operates.
There can be consequences for violating the bylaws of a building—the most serious will be eviction from a co-op. In a condo, violation of the rules can result in fines. House rules, however, are more accurately a set of guidelines for residents. A bylaw might say it’s against the rules to obstruct the hallways. The house rules might say strollers and umbrellas should be folded if they are stored outside the apartment.”
“According to the city’s Building Code, to be a legal bedroom in NYC it must have:
- a minimum of 80 square feet
- a minimum width of 8 feet in any dimension
- a minimum ceiling height of 8 feet
- at least one window opening to a street, yard or other outdoor space (skylights may suffice in certain zoning districts)
- two means of egress, or exit, either a window or door accessible from the inside without using keys or tools.
Additionally, the room cannot be used as a passage to another room. There are some exceptions, but this typically defines a legal bedroom.”
“White glove’ refers to the highest caliber of top-of-the-line apartment buildings, where the doormen have historically worn a dignified uniform and white gloves. Traditionally, white-glove buildings have been located on Park and Fifth avenues on the East Side, and Central Park West and Riverside Drive on the West Side.
It’s all about the level of service in the building and typically includes buildings with a fully-staffed lobby with a doorman, concierge and porter who are all there to help you get a cab or help you take your bags out of a cab.”
“Co-broking” occurs when two agents work together—one representing the buyer, and the other for the seller (or, in the case of a rental, the landlord)—to complete a deal. The commission is split between the two agents.
All NYC real estate agents who belong to the Real Estate Board of New York (REBNY), are required to co-broke their listings. That means that rather than attempting to keep the entire commission to themselves by working only with unrepresented buyers (or renters), a listing agent must allow other agents to show the property and collect a commission if a deal is consummated.
Sellers therefore benefit from co-broking, because their property is likely to be exposed to more potential buyers. Buyers, too, benefit from co-broking because their interests are protected by their agent whose loyalty lies only to them.”
“A tax abatement is a discount on taxes. Generally, a tax abatement will last for a set amount of time (for example, 15 years or 30 years ), with taxes slowly ramping up by a certain percentage point over time. It’s important for a potential purchaser to check to see when a building’s abatement began, and how long it’s going to last, so they know how long it will benefit them. This can all be done during the attorney’s due diligence research on the building.”
“When your money is ‘in escrow,’ that generally means that it’s being held by an impartial third party until the completion of a deal, the better to safeguard it from any foul play on either side. When you’re closing on an apartment purchase, with the large amounts of money being moved around, there are a few different ways that escrow comes into play.
First is your deposit. When you first go into contract, you’ll be expected to put a portion of your down payment in escrow as your deposit. Another way is maintenance charges in a co-op. While many co-ops require buyers to have a certain amount of post-closing cash liquidity up front, some boards even require you to put some months’ worth of maintenance charges in escrow. A third scenario is when repairs are needed, in which case the seller is likely fronting the money, usually because a problem presented itself during the walk-through or inspection. The idea is that this provides an insurance policy of sorts for the buyer, so that they’ll have money to handle the problem in case upgrades or repairs aren’t completed as promised once they’ve already closed on the contract. The last scenario is with mortgage lenders, who often want buyers to pay several months of taxes and insurance costs, as a hedge in case the buyer is unable to pay their mortgage for some reason. The lender could want lender could want a few months of taxes and insurance set aside and put into escrow.”
“A mortgage gives you a loan to buy your apartment and once you own it, you can refinance if you want to change lenders or reduce your rate. A cash-out refinance allows you to dig into the equity in your apartment or take out a bigger mortgage and have the difference paid to you in cash. The cash needs to be used for investment, renovation, or to consolidate debt.
A cash-out refinance is open to owners of condos, co-ops, townhouses or one- to four-family buildings. New Yorkers who have seen their apartments increase in value but don’t have much liquidity are those who are best able to take advantage of the program.”
“LEED, which stands for ‘Leadership in Energy and Environmental Design’ is the most widely-used program to certify green, or environmentally responsible construction. The designation indicates ‘a universally agreed-upon, holistic system for reducing environmental impacts, saving resources, impacting human health, reducing carbon emissions and addressing climate change.’
Therefore, a LEED building is more energy-efficient, costs less to operate, and may even feel better to be in. There are levels of LEED certification: certified, silver, gold, and platinum. Certification level is determined through a system of points. Points are gained through the inclusion of sustainable elements, and the more points you have, the higher your certification and sustainability.
Sustainable elements of a project include LEED-certified managers, water and air filtration systems, the use of alternative energy sources (solar, wind, thermal), locally-sourced or formaldehyde-free building materials, and encouraging shared bike programs.”
NYC Rentals
“With no-fee apartments, the tenants do not need to pay the broker’s fee because either the landlord or building management is covering the fee for you. When the landlord covers the broker’s fee for you, it’s a concession designed to encourage you to sign a lease. Apartment owners much prefer offering a one-time freebie instead of lowering the rent for a full year.
Large rental buildings, especially high-end developments from companies like Related, are another source for no-fee apartments. With a new development, there are lots of apartments to fill at high, market-rate rents, so owners are inclined to offer a concession.”
“The vacancy rate is the percentage of all the available rental apartments in an area. It is calculated by taking a large sample of rental buildings in an area and measuring their turnover and activity. That provides a figure that can be applied across the borough. The lower the rate, the fewer the available units, and that shrinks your likelihood of getting concessions—those sweeteners where landlords offer you a free month or pay the broker fee to entice you to sign a lease. The city considers a ‘normal’ vacancy rate to be 5 percent.”
“A guarantor is typically a parent or other relative who agrees to be legally responsible for your rent in case you default. They also can help you secure an apartment if you do not meet the income or credit requirements.
Most NYC landlords require guarantors to live in the tri-state area so they’re easier to track down should the tenant default. They also need to have good U.S. credit and make at least 80 times your monthly rent annually. They’ll usually have to provide all of the same documents that the applicant does.”
“Since apartments in NYC can go very quickly, it’s always helpful to start gathering the required documents before you view the units so you’re ready to act quickly. Typically, these are the documents you want to have handy:
Photo ID; either a driver’s license or a passport will work.
A letter of employment on company letterhead. Make sure it has your salary and start date. If you’re going to college or grad school, get your letter of acceptance handy.
Copies of recent pay stubs and bank statements; three months is usually enough.
Landlord reference letter that says you’re in good standing and have been a good tenant.
Depending on how intense the building is, you might need other letters of reference, but it’s not that common, mainly just in condos or coops.
Your tax returns for the last two years. If you’re self employed, you’ll definitely need this, and may even want to have a letter from your accountant.
Though the management company will probably run a credit check on you as well, it can’t hurt to run one on yourself first to make sure there are no glaring problems on the horizon. Once you’ve decided on a place, the management company or landlord will likely ask you to fill out an application; prepare to also have enough cash on hand to cover the first and last month’s rent and a security deposit (which can be equal to one month’s rent, but no more).”
“By law, tenants have a 5 day grace period to pay their rent. Once that period has passed, the late fee is the lesser of $50 or 5% of the monthly rent currently being charged and collected.”
“A security deposit is money that a tenant, their guarantor or other third-party deposits with the owner of the apartment for the repair of any damages to the apartment for which the tenant is responsible. The owner will collect this at the initial renting of the apartment to the tenant, and its usually in the amount of one month’s rent. The security deposit must be kept by the owner in an interest bearing account in a NYS bank.
A security deposit should not be used as a final month’s rent. At the end of the lease, if the tenant honored the terms and conditions of the lease and left the apartment in the same condition as it was when initially rented, except for normal wear, the owner must return the full security deposit. If damage was done, the owner may apply part or all of the security deposit to the cost of repair.”
“Once you’ve found an apartment that you want to apply for, these are some general questions that are good to run by your landlord/management company:
What are the lease terms?
How will I pay the rent, and what does it include?
Will my rent go up? If so, when and under what circumstances?
Am I required to get renters’ insurance?
What’s the apartment history?
What changes can I make to the apartment?
How are repairs handled, especially in emergencies?
What if I need to break my lease?
All of these questions will help to give you an understanding of how things will operate throughout your lease term.”
“Under the recycling laws, landlords have four responsibilities. They must:
Provide a storage area for recyclables.
Post and maintain signs indicating which materials must be recycled. The signs should also indicate that tenants must separate their recyclables into mixed paper/cardboard, plastic/glass/metal.
Put recyclables in special receptacles.
Remove any non-recyclable material from recycling cans.”
“A sight unseen rider is a document stating that a tenant is renting an apartment he or she has not viewed in person and is accepting it in ‘as is, where is’ condition, and that the landlord/owner is not obligated to make any changes to the apartment. It is intended to protect against a tenant signing a lease and then alleging that the landlord is obligated to make sometimes costly repairs or changes to the apartment. Additionally, it protects the landlord should someone choose not to move in.”
“OP stands for ‘owner pays’ and means the landlord is offering to pay the broker’s fee. This means the listing comes with ‘no fee’ to the renter if he/she rents directly through the exclusive agent.”
“A co-signer on a rental property usually refers to an individual who signs a lease on behalf of someone else. A co-signer is immediately responsible for the rental. They might theoretically have the right to live in the apartment, but that would depend on the terms outlined in the lease.
While a co-signer is responsible for the rent at the moment it is due, a guarantor only has to pay once the person on the agreement fails to do so. A guarantor also often refers to an institutional lender who offers a service enabling the renter to qualify for and obtain the apartment. They also come into play with student loans or mortgages. The lender doesn’t reach out to the guarantor for monthly payment but will do so when and if the borrower defaults.”
“While you can definitely plan in advance, typically you will not be able to find an apartment for your move-in date until about a month out. For rental buildings, you can usually move-in a few days after you apply, but for co-ops and condos, the application process can take a few weeks. Pricing also fluctuates throughout the year, so prices in March will be different than prices in June or July.”
“Paying your bills on time is an important step toward building good credit, yet that often does not happen until after graduation or entering the job market. For overseas renters, be aware that credit history in another country doesn’t transfer to the U.S. No credit is better than bad credit, so long as you have a reason why.
There also are landlords who are reasonable and willing to bend a bit and take someone with no or less than stellar credit if you are making the required salary. Alternatively, the situation can be solved by using a personal guarantor.”
“Only if the landlord chooses to require it. When a lease is renewed at a higher rental amount, or the rent is increased during the term of the lease, the owner can collect additional money from the tenant to bring the security deposit up to the new monthly rent.”
“To comply with Fair Housing Laws and avoid discrimination, there are certain questions that clients may be wondering, but their broker is not allowed to answer. The strict interpretation of fair-housing laws prohibits brokers from providing information about people that could be construed as discriminatory in any of 14 protected categories. The categories include familiar ones like race, religion, sex and disabilities and less well-known ones like familial status, marital status, citizenship and occupation. So a broker who says something like, ‘There are tons of little kids in this building — it’s really family friendly’ could be accused of specifically steering families to the building and driving people without children away from it. So while your broker is always trying to help you, that is why they cannot answer when you ask them about the make-up of the building!”
“Tipping is a great way to say ‘thank you’ to those who have provided great service and gone out of their way to take care of things for you during the year. it is usually wise to tip a doorman and a superintendent the same amount, so that one doesn’t think he is less appreciated than the other. And if a tenant gave a building employee a tip last year, he should probably give the same amount this year.
It is also possible for tenants to pool their resources to provide employee tips. The most basic rule for holiday tipping is for a tenant to do what feels right and is within the tenant’s financial means. Just about any tip is appreciated no matter how big or small.”
Apartment Style & Design
“Parquet is a distinctive style of flooring created by arranging small pieces of wood in repeating geometric patterns, like herringbone, basket weave, or mosaic. It’s been around for centuries, and in its early days it was handcrafted from solid hardwood, making the floors as durable as they were elegant. Many of the finest American homes built in the 19th and early 20th century featured parquet flooring.
The 1960s and ’70s brought the mass production of parquet tiles, made with a thin veneer of wood adhered to a plywood substrate. These were thinner and less durable than solid hardwood floors, making them much more affordable but also cheapening their image. It’s likely that parquet’s bad reputation is referring to the parquet of the 60’s and 70s. However, ‘true parquet,’ made of 100 percent wood, is actually experiencing a bit of a revival, due to an increased popularity and an ongoing interest in mid-century modern design.”
“What qualifies as a ‘chef’s kitchen’ actually varies from agent to agent and listing to listing. There is no official designation as to what’s included, although one thing to expect to see in every chef’s kitchen is a good amount of space. Its usually large enough for more than one person to comfortably prepare food on multiple surfaces. The appliances are also usually upscale, especially at the higher end of the market. Regarding aesthetics of chef’s kitchens, there really are no rules, although the big trend right now is a streamlined look with hidden appliances.”
“Most often used in townhouse descriptions, a mother/daughter is a house with two, fully-equipped apartments in a one-family house. One key feature of a mother/daughter house is that the apartments share a main entrance. (An in-law apartment is a similar arrangement that typically has separate entrances.) The entrance may open into a common stairway, with one apartment up the stairs, and the other downstairs. They also cannot be rented out because legally, the house is a one-family.”
“With a gut renovation, you’re making fundamental changes to the structure. You’re taking absolutely everything out down to the studs of the wall. There’s a demolition, which takes everything out from the tile, floors, toilet, tub, sink, etc. There’s nothing in the room but cement.
A general renovation, on the other hand, is something you could potentially still live in your apartment through, even though it would be unpleasant. If gutted your entire apartment, you wouldn’t have a floor to stand on or a bath to use.”
“A classic five is a prewar apartment that includes five rooms—two bedrooms, a living room, a formal dining room, and a kitchen. The reason it’s different than a classic six is because it doesn’t have the smaller maid’s room. A classic six is technically a classic five, but with a maid’s room.
In New York City real estate, the smaller extra ‘maid’s room’ in a classic six is often used as an extra family bedroom, and thus can make a big difference in price, bedrooms being such covetable square footage. As such, the value of the extra staff room in a classic six can add anywhere from an extra few hundreds of thousands of dollars compared to what its value would be as a classic five.”
“Pullman kitchens are long and narrow. They get their names from the layout of kitchens in Pullman train cars. They’re similar to galley kitchens, but a Pullman kitchen is open on both ends, versus a galley kitchen which is more confined. They are common in tenement buildings because of the emphasis tenement developers put on building cheaply and maximizing the use of space.”
“A supertall building is at least 984 feet tall. Supertalls are not the tallest, though. That designation belongs to ‘megatall’ skyscrapers, which are 1,968 feet high (A large number of these are found in China). The height of supertalls is measured from the lowest, significant, open-air, pedestrian entrance to the architectural top of the building, including spires. However, measurements do not include antennae, signs, flagpoles, or other equipment. Supertall skyscrapers are more expensive to construct than shorter buildings, and they require special wind-tunnel and seismic analysis, stiffer frames, extra material and special elevators, and often refuge floors or other safety measures.
By 2022, there will be 13 supertall skyscrapers in New York City, 11 of which are currently under construction. One57 opened in 2014, one year before 432 Park, and became the first supertall on Billionaire’s Row. At 1,396 feet, the 96-story 432 Park became the tallest residential tower in the Western Hemisphere when it opened in 2015.”
“A soffit is part of a ceiling that is at a different elevation than that of the major area of the ceiling. It is frequently used as a transition from one ceiling elevation to another. Some might describe it as sort of layered ceiling (kind of like the inverse of a sunken living room). Technically, it is the flat surface of a dropped part of a ceiling, which often is used to cover pipes and/or ducts. ‘Soffit lighting,’ can also be used to describe recessed lighting, but installed in a soffit.”
“Technically, a casement window is any window that is hinged on the side. But here in New York, the term is increasingly being used to describe gridded, metal-framed, industrial-style divided windows that are evocative of historical loft or warehouse windows. For many people, they are a classic NYC design.
Casement windows have been showing up in new developments in recent years. They can bring character to a façade, and they help to break down large windows to a more human scale. The grid provides a foil between inside and outside making the occupants feel less exposed in front of a large window. All of these things can add up to soften a modern space, making it more approachable for people who may have more traditional taste.”
“While there is actually no exact definition of what qualifies as a Juliet balcony, its typically referring to a structure like a very narrow balcony with vertical metal bars, fitted to the outside of a building in front of an upstairs full-length window in two parts that can be opened like doors. It’s also sometimes referred to as a balconet, which is defined as a false balcony, or simply a railing against inward-swinging French doors at the exterior of a building.
Even though it doesn’t really function as an actual balcony, with its large, floor-to-ceiling doors/windows, the Juliet balcony lets in air and light, bringing the outdoors, or the sense of being outdoors, in.”
“The terms brownstone, townhouse, and rowhouse are often used interchangeably, but here’s how to tell them apart: A townhouse is a multi-story urban house, attached or detached and scaled similarly to surrounding houses. A rowhouse is generally attached and built in a style that matches its neighbors. Lastly, a brownstone can be a townhouse or rowhouse, and the facade is a brown sandstone. Each type of building is distinct but they can also vary both in architectural design and the materials used. Townhouse is the broadest term and encompasses them all.”
“Though lofts only make up about 10 percent of Manhattan residential sales at any given moment, they have become highly sought-after prizes. A loft is an apartment in a building that was formerly industrial, and as such, comes with a certain set of particular aesthetic and architectural characteristics. It’s a large, open space and you tend to have higher ceilings, larger windows, thicker walls and floors. Many of the details of the original industrial use are also left to give the property texture, so there’s often exposed pipes and exposed beams. However, each loft is slightly different and not every space will have all of these features.
Also, a ‘loft-like’ apartment usually isn’t really a loft, unless it was in an industrial building. ‘Loft-like’ usually refers to an apartment that has high ceilings, larger windows, and an open plan.
Because of their size and flexibility of use, lofts originally became popular with artists who used them as combination living spaces and work studios. For this reason, you tend to find more lofts in neighborhoods that were once industrial but morphed into hubs for artists (like Soho and Tribeca, and more recently, Williamsburg and Bushwick).”
Reach out and let's chat
Don’t see the info you’re looking for? We’ll be happy to answer any questions.