Q & A
"I am contemplating purchasing a condo in East Harlem as an investment. Do you think it is a good idea especially now that the developers are so willing to negotiate?"
Now’s a great time to get a deal on many new condos in New York City. Some sponsors have a lot of unsold units and big loans to pay off and they’re very eager to sell. You can negotiate on price and the closing costs which are substantial. State and city transfer taxes alone add up to almost 2% of the purchase price unless you work that into the deal. But only buy if you’re looking to hold onto the property for at least 5 years so you can ride out this bear market. And make sure you know what you can rent the place for so you can cover your costs. So far as Harlem goes, it’s a great place to buy real estate if you can negotiate the price below what you would pay for a rental.
"A family in our neighborhood recently moved overseas and their house is listed with a real estate/rental agent. The family left house keys with several friends who have since entered the empty house for various reasons, ranging from picking up appliances to letting in a carpet cleaner. Now one of these “friends” wants to pass a key to me, saying the owners wanted me to have it. I refused it on the grounds that I have no business with a key to an empty house that isn’t mine. Isn’t the Realtor the only one with documented authority to enter the property? With all these keys in different hands, I smell big potential for trouble here."
There’s no reason for you to have a key if you don’t want it, but stop trying to control what your neighbors do with their property. Truth is, the owners can give keys to whomever they want and their Realtor is simply the person they’ve hired to rent the house. If you snoop and see anything illegal, call the police.
"I’m considering buying a 1950s house on Long Island. There’s a vent pipe from an old oil tank visible on the property next to the base of the home. The current owner maintains the house has always been fueled by gas since she has lived there over ten years. She cannot produce certification the tank was removed or abandoned properly. The home inspector could not find evidence of a tank ever having been in the basement or a fill cap anywhere outside. How do I find out if an old oil tank is still there now or if it was removed properly? And if I can not, should this be a deal breaker?"
You don’t want to buy a property with even a chance of an environmental hazard. Get another inspection by a licensed engineer and make it the seller’s problem to resolve it by making it a contingency in the contract of sale. Either the seller should prove that the tank is no longer there, or you can walk away from the deal.
"My wife and I have been married for 31 years and have always rented a house. Now we’ve saved enough to buy a nice three bedroom home with no mortgage. However, some people have advised us to obtain a small mortgage since we may need money for unpredicted home repairs, increases in insurance, electricity, heating, property taxes and other living expenses. They also said we’d be losing the “interest” income you normally collect from savings which could be used for improving our retirement years. We’ll probably both retire in about six years and will be living on my government pension and our Social Security checks. What would you advise?"
Shop around and make sure to buy a home in very good condition to avoid the unforeseen repairs and headaches. Get the house inspected before you sign the contract. And don’t bite off more than you can chew – figure out what your income will be once you’ve retired and make sure it will cover your monthly housing expenses of taxes, insurance and utilities. If you take a small short-term mortgage you can pay off by the time you retire, you’ll get the accompanying tax benefit while you’re both working. Once you’re on a fixed income, though, you’ll want to minimize your monthly costs and a mortgage you don’t need should be the first to go!
