Don’t sign contract without financing contingency

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Lawyers start with a boiler-plate contracts, but the terms they add provide essential protections.

Lawyers start with boiler-plate contracts, and the terms that they add are intended to provide essential protections.

In this nascent world of restrictive credit standards, anyone buying a new home needs to expect the expected.

When it comes not only to getting mortgage approval but also to getting promised funds, buyers can count on roadblocks that could delay or even prevent settlement.

That is why it is essential for their attorneys to include appropriate financing contingency clauses in the contracts.  Those clauses allow buyers to have their deposits returned in the event that lenders don’t finally provide the money to close.

Considering that the usual deposit of 10 percent of the purchase price — $40,000 on just the $400,000 purchase of a studio apartment — is a substantial sum, contingency clauses are not to be taken lightly.

Notes Forest Hills lawyer Ryan J. Walsh, whose explanation I’ll paraphrase liberally below, there are three major contingencies that can protect a buyer: Continue reading

There are sellers who can’t handle the pressure

(flickr photo by massdistraction)

The pressure on buyers making an offer or waiting for a seller’s response often can cause them to lose sleep.

What they may well forget is how intense the pressure can be on a seller as well, whether hoping for a good offer or deciding on accepting one that already has been made.

A recent experience underscored the point, which centered on Continue reading

Have you seen those folks sorting cans in trash?

Canners

There certainly are more degrading enterprises than picking through trash bags to extract bottles and cans from them.  But the effort is way down there, you must agree.

Perhaps you read the New York Times story on New Year’s Day about such “canners.”  The column by Francis X. Clines is what has motivated me to write this post and e-mail City Council members Christine Quinn and Gail Brewer, who represents my district along with State Assemblywoman Linda Rosenthal, with the suggestion below. Continue reading

Sellers must keep their priorities in mind

Buyers don’t need a professional inspection to cite defects. (Flickr photo by Landahlauts)

There’s more than one way to lose a buyer, and today’s post centers on a common one — that pesky “as is” clause.

Contracts for the sale of condos and co-ops in Manhattan and elsewhere in New York City generally include the clause, which stipulates that the buyer accepts the apartment “as is.”  If the clause is not included, contingency language allows the buyer to cancel the contract in the event that the seller doesn’t agree to remediation.

Including an “as is” clause, especially for units in new buildings, shifts risk from the owner to the buyer.  And the risks — e.g. shortcomings in workmanship or code issues — are manifold in new developments.  So be it: caveat emptor. Continue reading

Advance approval for renovations eludes buyers

Let’s renovate!

“Ah,” the prospective buyer coos, “this co-op has great potential.”

Uh, potential?

“What do you have in mind?” I might respond.

“Well, I’d like to take out that wall between the living room and dining room.  And it would be great to turn that closet into a powder room.  And. . . “

I point out that residents need to present an alteration agreement to the building’s board for approval of such an enterprise.

“Do you think there’ll be any problem?” the buyer invariably asks.

It is a good question and not one with an easy answer, surely not one with an absolute answer.

First, it is good to know or find out Continue reading

True bidding war erupts at auction in Brooklyn

State Supreme Court Building in Brooklyn, where auction was held.

At an estate auction in Brooklyn that raised $7.225 million for New York City, a mixed-use Bay Ridge building went 76 percent over its minimum price of $1.6 million in a heated bidding war on Tuesday.

Not only was the competition for the property marked by the drama of late entrants bidding well into the final rounds, apparent handshake deals among the hopefuls and rare bursts of applause, but the auctioneer for Kings County Public Administrator Bruce Stein mistakenly called out the wrong paddle number when declaring the building sold at $2.82 million.  He then started to re-open bidding.

“You said it was sold!” many who attended the auction shouted as the actual winner strode in consternation from where he was seated in the back row toward the front of the courtroom in State Supreme Court, Brooklyn, where the auction was held. Continue reading

Winning bid of $5.63 million snags Starr condo

Bidding was casual at the auction of the luxury Upper East Side condo that Ponzi schemer Kenneth Starr had purchased in 2010.

A bidder who declined to give me his name won imprisoned fraudster Kenneth Starr’s condo at auction today for a $5.63 million bargain price.

He was among 17 registered bidders for the apartment in the doorman building called the Lux, at 433 E. 74th St.

The current owner is the Internal Revenue Service, to which Starr relinquished the property prior to his sentencing.

Continue reading

Imprisoned fraudster’s condo heads to auction

Kenneth Starr purchased a lavish new triplex at the bottom of this building for $7.6 million in 2010.

When Kenneth Starr pleaded guilty last March to stealing more than $33 million from his celebrity clients, he already had turned over to the United States government the luxurious condo that he had purchased for $7.6 million on the Upper East Side of Manhattan.

With five bedrooms, five and a half baths, 1,543-sf rear terrace that has an outdoor kitchen, an indoor lap pool and a 340-sf second terrace upstairs, the 6,550-sf triplex goes to auction Continue reading

Buyer is found for bankrupt Harlem church

227 Lenox Avenue

That Harlem church in a brownstone building on Lenox Avenue has found a buyer prior to its scheduled auction.

Vice President Richard Maltz of the David R. Maltz & Co. auction firm told me in a telephone interview that a purchaser offered $1.166 million, including a 6 percent buyer’s premium, on Jan. 18, the first day that the property was available for inspection.  He declined to identify the buyer in what he described as company policy.  Continue reading

Harlem brownstone used as church faces auction

227 Lenox Ave.

Change of plans: Out and About will be posted next week

The bankruptcy auction of a 6,398-sf building configured as a church and including four apartments on Lenox Avenue in Harlem is scheduled for Feb. 2

Among five other properties to be auctioned are a one-bedroom co-op in Castle Village (where I once lived for 10 years) overlooking the Hudson River in Manhattan’s Washington Heights, a four-bedroom single-family home in St. Albans, Queens, and a one-bedroom co-op in Briarwood, Queens.

Springfield Missionary Baptist Church has been the owner of the central Harlem building, which is in need of renovation and lacks a proper certificate of occupancy.

At Continue reading