Olshan Realty, Inc. | Rental FAQ

1. What are the income requirements for a rental?

2. What is the typical security deposit?

3. What documents do I need to bring with me to rent an apartment immediately?

4. What are the costs of renting an apartment?

5. What is the difference between renting in a rental building versus a co-op or condo building?

6. Are pets allowed?

7. What is the difference between the cost of a furnished and unfurnished apartment?

8. What does rental furniture cost?

9. Are renovations allowed in a rental apartment?

10. Why would a landlord require an extra security deposit if the renter doesn't have pets?

11. What type of insurance is recommended for a renter?

12. How do I set up my utilities?

1. What are the income requirements for a rental? [TOP]
Landlords typically require a tenant's income to be at least 48-50 times the monthly rental amount. For example, a one bedroom apartment renting for $3,000 per month would require a renter to have a minimum of $150,000 annual income. If the renter does not meet income requirements, some landlords will take a guarantor. Most guarantors are required to provide income and asset verification. Out-of-state guarantors might have to provide an extra security deposit.

2. What is the typical security deposit? [TOP]
A typical security deposit is equal to one month's rent. More money may be required if the unit is furnished, or if the tenant has a pet.

3. What documents do I need to bring with me to rent an apartment immediately? [TOP]
Two years tax forms, copies of bank and brokerage statements, employment verification and landlord verification letter. Be ready to write checks on the spot if necessary. Generally the required checks must be certified.

4. What are the costs of renting an apartment? [TOP]
Broker's commission for rentals exceeding 6 months: 15% of one year's rent
Broker's commission for rentals less 6 months: 1 month's rent
Security deposit equals 1 months rent
Application fees typically $50 to $100, which includes a credit-check
First month's rent
AND:
Co-op or Condo sublets require the additional:
Move-in fees/deposit of $500 to $1000
Application fee of $150 to $350
Building credit check of $50

5. What is the difference between renting in a rental building versus a co-op or condo building? [TOP]
The application process in a rental building involves submitting the application to a landlord with a credit check. Usually, the landlord will let the renter know immediately of his approval. The lease term can be one or two years with an option to renew. Many landlords expect leases to be executed immediately and funds made available within 24 hours. In a co-op sublease situation, the applicant must provide a lengthy application package, have a formal interview and wait for acceptance. Co-ops limit the terms of the sublet to one to two years. The condo approval requires a package, no formal interview and is significantly faster than the co-op process. The length of the lease is more flexible in a condominium.

6. Are pets allowed? [TOP]
About half of the buildings in New York will allow pets. Usually an extra security deposit is required with a rider to the lease holding the renter liable for any damage. Cats are more acceptable than dogs. Dogs over 30 pounds are frowned upon.

7. What is the difference between the cost of a furnished and unfurnished apartment? [TOP]
Furnished apartments average $500 to $1,000 more per month depending on the type of furniture.

8. What does rental furniture cost? [TOP]
Renting furniture can cost $250 to $700 per month. There are numerous furniture rental companies in the city.

9. Are renovations allowed in a rental apartment? [TOP]
Renovations are allowed with landlord approval. Walls that have been painted any color other than white or wallpapered must be returned to their original state before vacating the premises. The tenant risks loss of their security deposit.

10. Why would a landlord require an extra security deposit if the renter doesn't have pets? [TOP]
Additional security may be required when a renter has bad credit history or limited employment experience. Diplomats may be required to provide additional security.

11. What type of insurance is recommended for a renter? [TOP]
Renter's insurance. This is a type of insurance that covers personal possessions. The cost is minimal. A landlord's policy does not cover a tenant's possessions.

12. How do I set up my utilities? [TOP]
Con Edison www.coned.com is the electric and gas provider for New York. Verizon Communications www.verizon.com, which is the merged Bell Atlantic and GTE Company, is the main local telephone provider. Depending on the type of building and area, the cable companies differ¬…Time Warner, Liberty Cable and RCN.

Coop - Purchaser

Attorney $2,000 and up
Bank Fees $1,600 for bank attorney, application, appraisal and credit reports.
1% point for mortgage
Board Package application $500-$750
Flip tax 1-2% of the sales price depending if there is a flip tax in the building (may be paid by seller)
Short-term interest (1 month max.)
Move-in deposit ($500-$1,000)
Lien Search $300
Mortgage Document -Recognition Agreement fee $250.00
Mansion Tax - 1% of the entire price payable to New York State on prices exceeding $1 million.

Condo or Townhouse- Purchaser

Attorney $2,000 and up
Bank Fees $1,600 for bank attorney, application and credit reports.
1% point for mortgage
Board Package Application $500-$750
Short term interest 1 month maximum
Real Estate Tax escrow 2-6 months
Recording Fees $200
Mortgage Recording Tax is 1.8% of amount of mortgage under $500,000 or 1.925% of entire amount on loans over $500,000
Fee Title Insurance $450 per $100,000
Mortgage Title Insurance $200 per $100,000
Violation Search $170
Some condos require several months in common charges as a flip tax paid by the buyer (not refundable).
Mansion Tax - 1% of the entire price payable to New York State on prices exceeding $1 million.
Please note on purchases of new construction condominiums, it is customary for the developer to charge the purchaser the seller's closing costs (see below).

CO-OP - SELLER

Broker: 6%
Attorney: $2,000 and up
Managing Agent: $500 and up
Flip Tax: 1% to 2% of sales price if building has one
Stock Transfer: $.05/share
NYC Transfer Tax: 1% of purchase price up to $500K. 1.425% of entire purchase price when price exceeds $500,000.
NY State Transfer Tax: $2.00 per every $500 of the purchase price.
Pay-off Bank Attorney: $300
Move-out Deposit: $500-$1,000
UCC-3 Filing Fee: $50

CONDO or TOWNHOUSE -SELLER

Broker: 6%
Attorney: $2,000 and up
Managing Agent: $500 and up
Flip Tax: 2 -3 months common charges if building has one
Title Company Fees: $200
NYC Transfer Tax: 1% of purchaser price up to 500K. 1.425% of entire purchase price when price exceeds $500,000.
NY State Transfer Tax: $2.00 per every $500 of the purchase price.
Pay-off Bank Attorney: $300
Move-out Deposit: $500-$1,000

7. What are the financing requirements when purchasing a co-op? [TOP]
Each building has its rules as to how much financing a purchaser is allowed. It is best to get this information from your broker. Most of the buildings between Lexington and Fifth Avenue and along Central Park West do not allow more than 50% financing. Some buildings on Fifth and Park Avenue do not allow financing at all. Nevertheless, there are still a good number of buildings that allow up to 80% financing.

8. Is there a net worth requirement necessary for passing a co-op board? [TOP]
Co-op boards scrutinize the asset and liability statements of applicants in order to insure that the applicant has ample cash reserves remaining after purchase. Once again, each building is different and since these are private corporations, they tend not to put their specific net worth requirements in writing. It is best to check with the managing agent of the building or consult your broker.

9. How does somebody make an offer? [TOP]
Offers are generally made orally, although it is recommended that they be put in writing and submitted to your agent. When making the offer, it is important to state the price, the terms of the sale i.e. financing, closing date and personal property included. Appliances, air conditioners and blinds are customarily included. Excluded are chandeliers, sconces and window treatments. A buyer profile should be included that states job position, salary and bonus.

10. What can I do to prepare myself for a bidding war? [TOP]
The best thing to do is to find an experienced agent. The second best thing is to give your agent a detailed asset and liability statement, a typed biography on yourself and a list of personal and business references. The references should be from well-respected individuals who have known the purchaser for a length of time and who would be willing to write a reference letter. In a competitive bidding situation, often the best offer wins but sometimes the seller considers which buyer has the best offer combined with their potential for passing the co-op board. Sometimes the best package wins and selling yourself as a solid buyer can help you get the apartment.

11. What am I looking for in a building's financial statement? [TOP]
When purchasing an apartment it is important to look at the financials of the co-op or condo. Financial statements will tell you about the building's underlying mortgage, its interest rate and when it comes due. Refinancing an existing loan can lead to higher monthly maintenance fees. Financials will inform you of any pending lawsuits from tenants or other parties. Financial statements will also tell you how much money is in the building's reserve fund. This is money set aside for future repairs. These are some of the major highlights of the statement.

12. What are tax abatements? [TOP]
Many condominiums enjoy the benefit of real estate tax abatements. 421-A is a program in which taxes are phased in over a 12-year period. Generally, taxes are not paid for the first two years and then they are due in 20% increments every two years thereafter. This type of information can be found in the prospectus or black book. You should be able to obtain the prospectus from the listing broker or managing agent for the condo.

13. Why do I need an attorney? [TOP]
In New York County, brokers are prohibited from drafting contracts of sale. Attorneys are needed for real estate transactions. The best thing to do is hire an experienced real estate attorney who is willing to charge a flat fee.

14. Do I need a home inspector or engineer to look at the property before signing a contract? [TOP]
In routine co-op and condo purchases an engineer's inspection is not necessary because structural defects are the responsibility of the building. For townhouse purchases, hiring an engineer is recommended. The same goes for purchasing a brownstone apartment in a building where there are few units and a small working capital or reserve fund. Sometimes penthouse apartments or apartments with terraces in hi-rise buildings leak and in this case, we recommend an engineer.

15. Who pays the commission? [TOP]
In sales, it is customary for the seller to pay the commission.

16. Who represents me? [TOP]
In New York County, it is customary to have two agents. In general a buyer's agent represents the buyer and the listing broker represents the seller. Dual agency is when there is only one broker representing both parties and is the fiduciary of both.