Condominiums “Condos” are the most popular choice of ownership among international buyers. Condos are recommended because of higher appreciation potential and flexibility renting. Most newer construction buildings are condos. The value of a condo, on a per-square-foot basis, is about 20 to 30 percent higher than that of a co-op. In addition, the appreciation potential and demand for condos are higher. Mortgage loan financing is available for international buyers either through a U.S or non-U.S bank. Since the credit crisis, lenders have tightened credit criteria and will require at least 40% percent as a down payment from a foreign buyer. Mortgage rates in US are about as low as anyone has seen in many decades. The mortgage rates are determined on the basis of your credit history, how much you are financing and if it’s a primary home, or a second home.
The sales commission in New York is pre-negotiated and paid by the seller. If the buyer does not have an agent, then the seller’s agent keeps the entire pre-negotiated commission. Hence, it is in the best interest of the buyer to have agent representation to help identify the right property and negotiate the best price. The seller’s agent only has the seller’s best interest in mind which puts the buyer at a great disadvantage. To buy an apartment in Manhattan, you should have a U.S bank account prior to applying for a mortgage, an established credit history in your country, at least a 40% down payment plus 2-4% for the closing costs, and banks may require 6-12 month of reserved funds towards common charges.
If you buy into a new development where the building has a lender in place you need to be aware that most banks do not lend into new construction unless it’s 70% sold or under contract. As a specialist in new development condos I keep track of sales ratios and advise my clients on hold off committing to a down payment until the 70% threshold is reached.