Curious about New York City’s real estate market? Whether you’re renting, buying, or selling, some insider intel from a real estate agent will help. Curbed recently hosted a chat with Compass broker Robert Khederian to discuss readers’ questions about finding a home in New York City.
Astute readers might recognize Khederian from his previous life as the engagement editor for Curbed, where he also wrote the Period Dramas column; he continues to indulge his love of old homes on his Instagram account.
Read on for some of his key takeaways about the city’s real estate market.
Breaking down broker’s fees
A standard broker fee is 15 percent of the total annual lease (so if your rent is $2,000/month, the total lease is $24,000 and the fee would be $3,600). That fee is split equally between the brokers on the rental deal, assuming there’s one representing the landlord and one representing the tenant. Getting a discount on this fee is generally difficult if both sides (landlord and tenant) have separate representation.
However, if you are going directly to a listing broker, that fee becomes more negotiable. If you do not have your own broker, then the fee can drop to 10 to 12 percent, and even as low as a single month’s rent (just over 8 percent). Don’t be afraid to ask.
You’ll sometimes see apartments listed as “no fee,” which means the landlord is compensating their broker for the rental so you. In that case, the only fee you should expect to pay is the $20 application/credit-check fee.
If you have your own broker and they take you to see a “no fee” apartment, then you will still need to pay a fee of some kind since your broker still needs to be compensated for the rental. That fee is set by your broker and can range from a month’s rent to 15 percent of the lease. It can be negotiated; don’t be afraid to have that conversation.
The social media effect on real estate
People obviously apartment hunt online, but social media is becoming an increasingly useful tool, too. I am very active on Instagram, and I regularly get people responding with serious interest to what I post.
But even if sharing listings doesn’t directly lead to a sale or a rental, social media goes a long way to raise general awareness about the listing, its style, or even the neighborhood it’s in. While I think that Instagram is best suited for real estate promotion, there are also super active communities on Facebook about specific types of architecture and houses that are for sale that can definitely become great resources for brokers and potential buyers and sellers alike.
I think the main difficulty is trying to present something as “new” or “noteworthy” multiple times: If you’re selling (or renting!) an apartment and it has been on the market for a few months, constantly posting about how it’s still available can read as a bit stale, perhaps prompting questions about why it hasn’t been snapped up yet.
On clients finding “the one” during an apartment hunt
Whether or not a client leaps at the chance to snag “the one” as soon as they see it honestly depends on the person. It’s typically more of a rational decision made after viewing a few properties. I’m always a fan of taking a beat when you get very excited over a property to let yourself calm down and really consider the apartment. Seeing multiple places provides good perspective—although there’s something to be said about knowing exactly what you want!
The difference between a condo and a co-op
When you buy a co-op, you’re buying shares in a private corporation that owns the apartment building. You don’t get a deed to the apartment, but rather, a “proprietary lease.” There’s one tax bill the whole building shares, and all tenants are responsible for paying that bill and maintaining the building—you all own it together! As such, the application process for a co-op can be invasive (it’s a bit like vetting a co-investor in a business) involving full financial disclosure, letters of recommendation, and an interview with the co-op board, which has the power to deny your purchase. Co-ops also come with more restrictions for if and when you can rent out your apartment should you wish. In the current market, there is some incredible value to be had in co-ops.
Buying a condo is more like buying a freestanding piece of property. While the application process also involves financial disclosures, there is no interview. You own your apartment, you get a deed to the property, and have your own separate tax bill. As such, you have a lot of flexibility should you wish to rent the apartment out or maintain it as anything other than your full-time residence. The vast majority of new construction in NYC is condo.
Acing the co-op interview
Each building and co-op board will be different, so preparation will depend on where you’re buying. A Park Avenue co-op board interview will be different from one in the East Village. You and your broker should have a conversation about how best to prepare, but generally speaking this is a time for the co-op board to get to know you as a person and a potential neighbor. This won’t be a time to ask nitty-gritty financial questions as at this point in the process, they will have already had your financial information to review.
Generally speaking, I would dress up (time to break out that suit and tie!), and talk about how much you love the apartment, and what a good addition to the co-op community you would be.