NYC Condos: Home-Hunting Tips and Tricks

Sometimes the most desirable condos for sale in New York City are in buildings still under construction, or just completed… desirable both because of the buildings themselves, and also because the prices for individual apartments are often at their lowest, as the developer seeks to fill as many units as quickly as possible, in order to hit certain financing milestones. 

As always, doing plenty of research is the smartest strategy, and examining the condominium offering plan, filed with the state attorney general's office, is a great place to start. For example, if a building's brochure advertises services and amenities that are yet up and running, confirm that they were included in the offering plan, or the developer isn't required to offer them.

And even is the building is complete, it's a good idea to check the actual amenities against what was promised—and should have been, by law, delivered--in the plan.These days perhaps the biggest risk in signing a contract early is the property's financing, or lack thereof.

Of course, as the building fills up, it becomes easier and easier to attract tenants, both for obvious reasons—the lower the vacancy rate, the more secure new prospects feel, thus more apartments are bought—as well as for behind-the-scenes that can happen at certain milestones.

When contracts have been signed for 15% of building, for example, it can legally be considered a condo. It's nearly impossible to get outside financing before this point, and so most of the deals are cash-only. At 30%, the property is approved by the Federal Housing Administration, and banks begin to consider mortgages.  And so on, through to a 70% occupancy rate, when Fannie Mae comes into play. 

That said, even as a building fills up, you should still look for such red flags as one investor owning 20% or more of the units… if that single entity can no longer pay its common charge, it could mean an unexpected increase for the rest of the tenants.

One way to quickly determine an approximate vacancy rate of a newly completed building is simply to go and look at it night, say at 10:00 or so on a weeknight. Are there just a couple of lonely lights, or does it have a comfortable, lived-in feel?

It's sometimes helpful to compare the number of lit-up windows with a comparable building nearby. Also, now matter how long a building's been standing, it's always a good idea to hang around near the entrance and see if any tenants coming in or out will chat with about their level of day-to-day satisfaction with living there.