Knowing the Marketplace

Defining Investment Grade
Mortgaging Primer
Interpreting Market Activity Reports
Analyzing Fair Market Value
Addendum Additional Helpers

Click to collapse a Mastering Manhattan annotation mark with explanatory remarks to refer to or to suggested related info in all our topical primers, manuals, guides, and handbooks.

Note: Along with Educating Yourself’s three guides—Understanding Co-ownership, Simplifying Brokerage, Legally Speaking/Closing The Deal—Mastering Manhattan’s step-by-step handbook to owning a Manhattan property continues with Knowing the Marketplace’s four manuals—Defining Investment Grade, Mortgaging Primer, Interpreting Market-Activity Reports, and Analyzing Fair-Market Value.

By taking each step in turn—when needed to be applied—the best negotiation stratagem alternatives will emerge.

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Knowledge is power! What is more, owning a home is most individual household’s largest lifetime investment undertaken. Furthermore, shelter is the benefit. Forming educated decisions involves very much the same information-gathering, fact-finding, and conclusion-making process whether an owner pricing a property or valuing it as a buyer. For an investor, moreover, verifiable facts are crucial, and equally essential for a first-time buyer.

Before you can begin to plan, or know how much and what planning you need to do, there are four pieces to put together. One is determining the cash to put down (invest); closely by followed the second financial aspect: the mortgage (collateralized loan) amount available to you. Once the two budget factors are in place, parts three and four, regarding affordability, can follow by analyzing a desirable property’s fair-market value, and determining the cost to occupy, which is an investor’s breakeven point.

To purchase a residence or investment property wisely—at its true value—the initial ingredient is to (genuinely) understand the marketplace. It is prudent, therefore, to approach new info with a degree of skepticism. At the onset, until proven otherwise: any current marketplace trend opines are merely another opinion to be considered. Before jumping to any conclusions, research assumptions thoroughly, and remain neutral what the facts are—until confirmed.

A decision based on hunches or emotions may come home to roost, so to speak. Keep in the back of your mind that real-estate is not always an easily liquidated asset, and the steps involved preclude immediacy. A logical step, whenever possible, is to consult a respected friend or relative, who own property, and ask for a referral to a realty specialist—attorney, lender or broker.

Being properly prepared to invest, ultimately, comes down to narrowing your search focus: one budget range, closely related size and limited locations. This willowing process refines the search to a manageable load. Referring to our comparison principles to filter a target property will be helpful to track a narrowed market segment. For a further appreciation how our primers, guides, manuals, and handbooks fit together, helpful notes throughout point to related topics. For example, our seven topic-by-topic sub-glossaries for commonly used terms, the four marketing principles, notes on the show sheet data, or how to read a floor plan, and Personal Planners—whether deciding to sell or developing your search parameters.

Starting With an Overview

First (and foremost), as an individual unit owner, the residential real-estate market should be viewed (for the most part) as a long-term investment, and rarely (if ever) as a get-rich-quick scheme. It is indubitably fact that great real-estate fortunes were accumulated over time, better put, generations. Proof lies in how the Astor, Rhinelander, Lenox, Stuyvesant, Schermerhorn, Bayard, Delancey, and Moore families’ vast Manhattan holdings evolved.

It is equally arguable that spotting an opportunity requires the right person being in the right place at the right time to make that shrewd decision. Purchasing a “deal” requires reaching conclusions. Moreover, making the right call, often at a rapid-fire pace, matters (especially important when a property is truly a good value). It is best accomplished when weighing the possible reward, understanding the risk involved, and subjectively calculating your risk-aversion-to-reward ratio—that planning means thinking through, and following through on every detail. While a quick, profitable return seldom occurs, spotting a good investment can be more straightforward—when all the steps, checks, and safeguards outlined throughout Knowing the Marketplace are carefully taken into account.

Putting in the Groundwork

There is independent investigative work needed. While gathering information begins by listening carefully to professional advisers, specifically a banker or mortgage broker, a second available resource is reliable market-activity media coverage. A few good sources are real-estate newspaper sections, weekly real-estate-related reports, and the business coverage on local television stations.

There will be inevitable, unfamiliar aspects to tackle: owning “to occupy” and “to let” involve different legal and accounting, mortgaging and purchasing matters, some particular to Manhattan, New York. Whichever ownership form, access to a knowledgeable lawyer—one with extensive real-estate experience and answers for your questions—is important. Furthermore, there are inevitable tax ramifications: short-term—a real-estate tax liability, and long-term—the tax on capital gains, each requiring an accountant’s input and advice. The financing and purchasing ins and outs, likewise, benefit from a professional’s point of view.

In addition, for non-New York residents, as well as foreign and domestic investors, there will be New York State and City tax filings—in particular rental income for an investor—to consider. Since, in many ways, the legal and accounting issues are interrelated, and because of that, an investor simultaneously accumulating the relevant information and consulting mortgage and sale brokers makes sense, and may save dollars later on.

Observing, or Breaking, the Rules

1. An investment grade property must fit criteria

Starting with the budget, knowledge acquired by an investor is beneficial for every property owner who is, in fact, an investor-occupant. Return on investment, the primary test an investment grade property must meet, is derived by the cost to own (capital’s cost and monthly fixed expenses). Return on investment is the penultimate criterion: short-term revenue is one matter, long-term capital gain is another.

An investor’s gross income (revenue minus fixed costs) is governed by the current rental marketplace’s overall strength. Plus, for every owner, a long-term capital gain opportunity exists. One easily assumed misconception is that size matters most, and that bigger is always best; neither is necessarily true as an income property. An eventual capital gain can be garnered at every size level—from a compact one-bedroom to a family-size unit.

2. Discerning inevitable investment issues every step of the way

Regardless of budget and size, the first three most important real-estate factors, as the saying goes, is location, location, location. It is especially true for Manhattan because it is an island. Accordingly, real and imaginary boundaries exist. Preferences, such as “west of Third” or “on the park” or “off the river” or “below 96th Street” (east or west) are extremely personal, but of prime importance.

3. The additional basic factors demand special attention

Purchasing to occupy requires that the part of town (and neighborhood within it), meet your specific needs. An income property search, contrariwise, can begin with the conventional wisdom: individual unit investors are best off when within walking distance of their home or office. Of course, out-of-town investors also must consider ongoing management and factor in that additional cost.

Manhattan properties have potential valuable considerations—their unique characteristics and special features. Each factor, such as a skyline, park, or river-view, outdoor space, pre-war detailing—in particular high ceilings and a wood-burning fireplace—has a significant intrinsic value (worthwhile to the present owner; hence, to the subsequent owner), so its dollar amount must be accurately assessed.

4. Condition is a unique consideration

Like beauty, it is in the eye of the beholder. Familiarity (depending how quickly the knack develops) inspecting available properties forms the understanding how to rate a property’s condition—without latitude for subjective interference (in particular personal preferences, taste). There are standardized designations, ranging from triple mint (perfect in all ways) to estate condition (a wreck in every way), while the commonly used descriptive terms are somewhat subjective: excellent, good, fair, and poor.

5. Attention to detail matters

It is in the owner’s best interest to highlight their property’s marketable features, so the inconspicuous (omitted) details, whether a correctable or inherent flaw, must be bared. Ultimately, with care, a self-inflicted error, perhaps as simple as pursuing a co-operative with a restrictive purchase application rather than condominium co-ownership could be avoided.


Defining Investment Grade 

Click to collapse a Mastering Manhattan annotation mark with explanatory remarks to refer to or to suggested related info in all our topical primers, manuals, guides, and handbooks.

Note: From these combined primers a serious seller can glean how to determine their property’s fair-market value as well as the asking price range. A savvy buyer or investor would profit by familiarizing themselves with Key concepts of co-ownership (in Educating Yourself) and Distinguishing Dwellings (in the Introduction) to be aware of the investor-friendly co-ownership dwelling type array.

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A savvy investor calculates the initial cost of capital to purchase—loss of its fixed income value, to be precise—as well as the carrying costs: monthly building fees and projected mortgage payments. From the onset, the investor should keep an eye on more than one market segment—for example, various sizes (bedroom count), and their relative price differential according to neighborhood. If return on investment, the potential rental income cash flow, is not gauged accurately there is a consequential (possibly ongoing) monthly shortfall. The investigation process should also track the current rental market’s supply and demand (vacancy ratio) trends, which vary somewhat by neighborhood and market segments. The cost to occupy contrasted with like rentals indicate affordability and an investor’s breakeven point. (These differentials will form key negotiation plateaus.)

New-construction condominiums are meaningful investment-wise because they haven’t been occupied, presumably are maintenance-free, involve less financial disclosure (for mortgage purposes only), and likely entail a Manhattan real-estate tax abatement, which can lower the initial monthly fixed costs substantially. Even so, for non-city residents whatever tax-saving could be garnered is a deduction on New York State and City tax on rental profit. Therefore, a balance between the tax-deductible portions (controlled by the financed and applicable real estate tax portion), and gross rental income, and then minus (subtracted) the fix building fees has to be reached. The professional team’s input—attorney, accountant and brokers–again come into play.

Although no direct sale or rental history for a new-construction condominium are yet established, although, like—exactly alike—very nearby properties’ asking price are a reasonably guide. A handbook, Analyzing Fair-Market Value, begins on page 329. While an important tip, don’t pass over the other information and hints because they’re different from what you may have in mind. Or, take in John Jacob Astor’s insight from two centuries ago, in Midtown West, on page 170, often serendipitous juxtaposition acumen spark a thought that appeals to you, it can be turned into any purpose you please, perhaps with only minor modifications. Historically-speaking—for example, an early 1970s (40-year-old) new-construction property, depending on the part of town considerations and size factor, now sell for 30- to 80-times their purchase price. These features offer a welcoming shelter for an international investor and cash buyer.

Contrariwise, the caveats include:

  • Only a floor plan and on-site model apartment often exist;
  • The builder’s reputation, based on prior projects, is the single guideline as to quality control;
  • The purchase price is controlled by the builder, based on fair-market value but can be adjusted—up or down;
  • The completion time frame is never guaranteed;
  • Besides the initial 10% cash good-will deposit, additional payments come due in stages;
  • The mortgage interest rate is set by an unknown future prevailing prime rate;
  • The 1.5% transfer tax is paid by the buyer, as opposed to (in all other cases) the seller.

Commonsensically, it is worthwhile to consider, would one larger rental unit provide a greater net income than two smaller units? There can be quirky nuances, which a quick study and subsequent deduction only proves to be partially correct: What may seem fact regarding an abundant particular bedroom count (within a specific part of town) compared to scant demand for another unit size (even within the same neighborhood), isn’t necessarily true everywhere. Across town the opposite may be the case.

It is true that there is a greater preponderance of families in many uptown neighborhoods—especially those convenient to the city’s private schools—meanwhile, downtown, traditionally, is favored by other subgroups, with access to their particular lifestyle and interests. This does not imply: never invest in a smaller unit uptown or a larger unit downtown—or vice versa. It just isn’t that cut-and-dry.

To maximize rental income, in due course, it is important that a qualified tenant is secured in a reasonable time frame—an unoccupied investment property drains cash, and that loss is never recaptured. That is avoidable: one well-worn path is combing the condominium sales listing for a property with a “reliable” tenant in place. These units should be of special interest to every absentee investor landlord. It is true, what’s more, that certain units have a universal advantage over others: location, bright, and views not only command a dollar premium, they move off the rental market faster than average, too—when priced right. Moreover, each market segment, whether neighborhood, size, or location, has its own winning attributes—for instance, an open kitchen, a charming garden view, or convertible space, a dining area that can double as a bedroom, perhaps.

Every rental building has more desirable units, and those that are less so. Therefore, at times, the owner will have an inventory in both categories. Does a single unit owner-investor need to be in that situation? Not when marketable valuable considerations are consider as a high search priority. Like a rental building owner’s best property, an individual investment property, always on the market to rent quickly, must be appealing. Move-in condition is the only operative term in order to find a “good” tenant and maintain productive occupancy. An owned-and-occupied property, on the other hand, can be brought to a “personally ideal”…gradually…with emphasis on immediate cosmetic updating to taste.

A bucket of white paint’s cost—to appear fresh—is a smart investment. Maintenance and minor repairs (servicing air conditioners or a new refrigerator, as needed) are inevitable and shouldn’t be put off. Every capital investment, particularly moderate- to large-scale renovations, need to be very carefully considered. Experience renovating a property may be an asset assessing hidden costs and nuances—though any perceived value increase (realized at the sale) must be viewed as a risk. In most cases, these costs will not be recovered through income, without elevating the unit into a considerably higher rent category; and, at best, over a considerable time frame.

In addition, a renovation’s value depreciates, declining gradually over time, and then sharply as an update is needed once again. This is particularly true for an income property, with constant wear but not always constant care. And, often underestimated is the impending carrying cost with unrealized income, while fixed expenses continue throughout the unoccupied time—especially, if preparing to sell to an owner-user; presumably, at a higher contract price point.

Renting guidelines for the investor

Although the basic tenet as an investment grade property owner (seeking profitability by finding a trouble-free, reliable tenant), may be similar around the world, this market has particular peculiarities. It is most evident regarding how the rental realm operates—especially securing a qualified tenant and tenant’s rights. Manhattan renters have two choices: rental buildings, where the units are occupied exclusively by tenants, or a condominium, condop, or co-operative apartment house, whose rules allow an individual owner the right to sublet. The later requires more scrutiny and submitting a detailed financial disclosure and references.

The written document outlining the terms, rights, responsibilities, conditions and understandings, is a lease. The leaseholder is the occupant; the landlord is granting occupancy. For the precise terminology and their explanation, see the Investor/Renter Sub-glossary; for lease examples, reference rental agreements at in Mastering Manhattan’s Paperwork Notations.

A residential rental lease stipulates:

• The occupancy time period, or term;
• Conditions, including the amount, payment date, and security deposit held in escrow;
• Supplemental conditions are covered by an addendum, or rider;
• Option clause, offering a renew lease—usually at an increased rent, for another set term.
The residential rental lease types are:
• A primary residential rental lease is “Rent Stabilized.” The lease applies to a unit (not a tenant) within a multiple-dwelling, and it includes legislated increase guidelines, which is granted for either a one- or two-year period. A rent-stabilized lease is automatically renewable by the lease-holder (only). Periodic painting is also proscribed.
• A second lease type (covering by far the vast majority of rental units) is at fair-market rent. These leases allow the landlord to charge whatever amount (under current conditions) that a tenant agrees to pay.
• A short-term rental lease is exclusively for a furnished unit, offered for more than three months but less than one year, at a fair-market rental rate.

State-wide regulations prohibit a leaseholder from transferring (referred to as, subletting) their “right of possession” to a third party. The penalty for an illegal sublet is triple damages to the landlord; and the sub-tenant, with no legal right to occupy, may be evicted at any time. A landlord agreeing to a sub-tenant’s occupancy is entitled to apply an unspecified surcharge. Moreover, one final point of fact: a “roommate” may only pay 40% of the rent-stabilized rental amount

Procuring your tenant

Finding a qualified tenant is accomplished by either hosting open houses, soliciting potential renters directly in such vehicles as the New York Times and Craig’s List, or engaging the services of a broker. The same broker’s agency fiduciary responsibilities and functions, as described in Educating Yourself, Simplifying Brokerage, pages 273-84—all of which apply. Typically, the broker’s commission is paid by the tenant; however, depending on market conditions, the landlord may choose to pay the fee in order to appeal to a wider audience. The customary commission to the procuring broker is equal to one month rent, or 15% of the year-one lease amount (only) is the commonplace fee arrangement..

When too few rental units are available to meet demand, landlords tend to update and upgrade their units in order to charge a higher rent. On the other hand, oversupply (more available units than demand) may necessitate an incentive to both renters and brokers: the landlord may then participate by paying (all, or a portion of) the tenant’s brokerage fee due to the procuring broker.

The current vacancy ratio serves as the best indicator as to whether a Manhattan investor should consider granting a concession.

Allowing tenancy

As financial protection, a credit report (the applicant’s financial background information) is consulted to determine creditworthiness. The report lists the applicant’s past credit record, including timely payments. A high score—one without blemishes, is preferable.

A security deposit—traditionally one month’s rent, perhaps a second month for a pet, and up to four or five months if either the applicant’s income or credit report does not meet the standard tenancy formula: 40-45 times one month rent. (A $1000 rent, therefore, is backed up with $40-45,000 gross yearly income.)

A security deposit, held in the landlord’s escrow account, is returned to the tenant after the vacated premises have been inspected for damage.
A landlord typically asks a prospective tenant to furnish:

    • A recent pay stub, substantiating income;
    • Employer’s letter, verifying length of employment;
    • Previous landlord reference letter, to assure stability;
    • Other pertinent reference letters, as desired.

Preparing to invest

Is it time to refine your game plan? Tactically, there is much to discover firsthand—for example, differentiating each dwelling type’s advantages, evaluating the amenities and services of one apartment house compared to others, and understanding various valuable considerations’ value. If so, the next step is to identify a property’s important characteristics at open houses. These visits are a sure-fire strategy to advance your education, to accumulate knowledge, to hone your perspective.

What is more, when ready to enlist the services of a broker, open houses offer an opportunity to observe brokers at work, assess their style, and test their knowledge. After all, who else has unlimited access to the vital current and historical sales or rental income information (the facts that can verify your instincts)? Tips on planning and optimizing these open house visits are addressed in Analyzing Fair-Mark Value, Narrowing a Target Property’s properties.


• Breakeven is the primary test every investment property must meet to be investment grade.
• Cost is the amount which covers fixed monthly building fees, real-estate taxes, mortgage payments.
• Rental income, which is governed by the occupancy ratio and current activity, should (at least) equal gross expenses—(breakeven).
• Real-estate taxes and mortgage interest are deducted from gross income. (The monthly maintenance fee or common charges are daily operating expenses, and not a tax-deductible item.)
• The short-term return on capital is net (after-tax) profit.
• Long-term capital gain is realized when selling the property.
• Capital expenses (unit renovations and building assessments for improvements) are deducted from the gross gain, at an investment property’s sale—owner-occupied units, too.
• As the initial investigation (narrowing the budget, location, and size) phase winds down, visiting properties begins.

Investor and Renter Lexicon

Appreciation is a property’s increase in value.

Assigning is the subletting of rights to another party, and is prohibited by the standard Manhattan residential lease.

Capital gain is realized profit.

A capital improvement increases a property’s value, and includes an assessment for renovations or replacement cost of mechanical equipment; it is deductible from the capital gain for tax purposes; both building assessment and renovation costs are capital improvements.

Collect your own fee takes place when a landlord pays only its broker’s commission; the corresponding, or co-broker, is paid their entire commission by the renter.

A condominium ownership indicates that each unit’s title is privately held, and that the apartment hous’s common areas are co-owned.

A condop combines co-operative-share ownership with a condominium management style, including allowance for subletting and no board of directors’ approval being necessary in order to transfer shares.

Co-ownershipapartment-house types are co-operative, condominium, and condop.

A deductible expense is an investment property’s operating expenses that when subtracted from rental income equals net income.

Economic life is the span during which an investment property is financially beneficial.

Equity is a property’s market value less liabilities—closing costs, the mortgage satisfaction total, and taxes.

Fixed expenses are deducted from gross rental income, including real-estate taxes, building fees, and insurance, to determine gross profit from an investment property.

An income property produces cash flow generated by the collecting of rent.

An interest in real property is the ownership of it.

An investment property’s value is based on both short-term rental income and long-term value appreciation; a condop and condominium’s recent rental and sales history are both considerations.

An investment-worthy property pays a short-term return from current rental income while appreciating in value, known as “upside potential.”

A landlord is the owner of a rental property.

A lease is the document outlining the rights and responsibilities between a landlord and a tenant.

A lessee is a tenant; a lessor is a landlord.

To leverage an investment property is to purchase it with borrowed funds.

Margin is the difference between income and expense for an investment property, or the stable, or constant, difference between an adjustable-rate-mortgage index and an interest rate.

Net income equals gross income less expenses.

Net worth equals assets less liabilities

Owner pays, abbreviated as OP, is an inducement from an owner, management company, or developer to a tenant, offering to pay a portion or all of the commission due a broker.

One’s primary residence is the one in which taxes and voter registration are filed.

A property’s profit can be twofold: the short-term gain—rental income less expenses—and the long-term increase in market value following its sale.

A real-estate investment trust, abbreviated as R.E.I.T., is the granting of loans by shareholders, with real property as collateral.

Realized gain is net profit; recognized gain is taxable profit.

A rent-stabilized lease, abbreviated as R/S, is subject to a state-legislature-set guideline regarding any increase, reviewed annually; such leases are automatically renewable by a tenant; a rent-stable tenant is entitled to increase guidelines on a renewal, as long as the monthly rent remains less than $2,000; it applies only to tenants with declared income of less than $165,000 on at least two of their prior three annual income-tax returns.

A rental building has apartments available only for lease—not sale.

A rider is an addendum that covers supplemental terms.

The right to sublet, or assign, a residential apartment by the primary leaseholder, or tenant, is not permitted in a Manhattan lease.

Risk factor is potential loss.

A row house is one among homes in an unbroken line, sharing two common walls—as opposed to a detached house without a party wall; although technically correct, the term is lackluster compared with town house and brownstone—and is rarely applied to single-family Manhattan houses.

A security deposit, traditionally one month’s rent, is held by a landlord and returned to a tenant upon vacating, following an inspection of the premises for damage.

A short-term rental is one that is furnished, with a definite term, or time period, ranging from three months to less than one year.

A sole proprietorship is one by a single owner/investor.

Subletting is the assigning of a lease to a third party.

Tax abatements, or temporary tax credit, are an inducement offered to developers to encourage building activity, which is passed along to purchasers.

A town house, abbreviated as TH, is differentiated from a row house as being wider than one standard—25-foot—city lot, and by the extensive custom details to the façade and the sumptuous materials employed throughout the interior.

The useful life of an investment property is determined by its covering costs, and its market value’s remaining investment-worthy.

Vacancy rate is the empty rental units as a ratio to those let, or under lease.

Yield is an investment property’s short-term return.


Renter Lexicon

Assigning is the subletting of rights to another party, and is prohibited by the standard Manhattan residential lease.

Economic life is the span during which an investment property is financially beneficial.

Fixed expenses are deducted from gross rental income, including real-estate taxes, building fees, and insurance, to determine gross profit from an investment property

An income property produces cash flow generated by the collecting of rent.

An interest in real property is the ownership of it.

An investment property’s value is based on both short-term rental income and long-term value appreciation; a condop and condominium’s recent rental and sales history are both considerations.

An investment-worthy property pays a short-term return from current rental income while appreciating in value, known as “upside potential.”

A landlord is the owner of a rental property.

A lease is the document outlining the rights and responsibilities between a landlord and a tenant.

A lessee is a tenant; a lessor is a landlord.

To leverage an investment property is to purchase it with borrowed funds.

Margin is the difference between income and expense for an investment property, or the stable, or constant, difference between an adjustable-rate-mortgage index and an interest rate.

Net income equals gross income less expenses.

Net worth equals assets less liabilities.

An option to renew is a clause within a lease that establishes terms for renewal.

Owner pays, abbreviated as OP, is an inducement from an owner, management company, or developer to a tenant, offering to pay a portion or all of the commission due a broker.

A rent-stabilized lease, abbreviated as R/S, is subject to a state-legislature-set guideline regarding any increase, reviewed annually; such leases are automatically renewable by a tenant; a rent-stable tenant is entitled to increase guidelines on a renewal, as long as the monthly rent remains less than $2,000; it applies only to tenants with declared income of less than $165,000 on at least two of their prior three annual income-tax returns.

A rental building has apartments available only for lease—not sale.

A rider is an addendum that covers supplemental terms.

The right to sublet, or assign, a residential apartment by the primary leaseholder, or tenant, is not permitted in a Manhattan lease.

A security deposit, traditionally one month’s rent, is held by a landlord and returned to a tenant upon vacating, following an inspection of the premises for damage.

A short-term rental is one that is furnished, with a definite term, or time period, ranging from three months to less than one year.

A sole proprietorship is one by a single owner/investor.

Subletting is the assigning of a lease to a third party.

A tenant, or lessee, is the occupant of an apartment.

Term is the duration of a lease or loan.

The useful life of an investment property is determined by its covering costs, and its market value’s remaining investment-worthy.

Vacancy rate is the empty rental units as a ratio to those let, or under lease.

Yield is an investment property’s short-term return

Mortgaging Primer

 Click to collapse a Mastering Manhattan annotation mark with explanatory remarks to refer to or to suggested related info in all our topical primers, manuals, guides, and handbooks.

Note: A potential seller with a mortgage should refer to their instruction for its specific provisions, in particular, those regarding a pay down. A prospective buyer is wise to first make an appointment with their bank branch’s mortgage counselor before “shopping around” for the right mortgage instrument through a mortgage broker.

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Mortgaging (to leverage) pledges the real property as collateral for a long-term loan. Thereby, less capital is required to purchase. A mortgage instrument is the document issued by a lender, which includes specified terms and conditions. While there are several common mortgage instruments, the vast majority for owner-occupied Manhattan properties is a conventional fixed rate or adjustable-interest loan.

The document (instrument) includes:

      • Principal amount (borrowed capital)
      • Interest rate (fixed, or adjusted at predetermined intervals);
      • Repayment schedule (stated in monthly payments);
      • Term (the length) stated in years

The common mortgage instruments are:
1. Conventional mortgage: one meeting government criteria, and with four elements, including principal, interest, taxes, and insurance (abbreviated as PITI). Fully-amortizing mortgage (gradually repaying principal) payments are comprised of two components: Interest on the principal, with unequal, continuous, partial payments to reduce the borrowed amount—calculated to reach zero at the end of the term.

A conventional loan option—not initially fully amortizing—though, at a stated point the principal amortizes over the remaining term of the loan. Therefore, repaying the principle balance over a shorter term will increase each monthly amount (substantially) throughout the remaining period.

2. A principal loan amount is a straight-term (not amortizing) mortgage, with interest-only payments until the term ends, when the loan amount is repaid in full.

3. An adjustable rate mortgage (ARM)—refers to a variable or floating-rate mortgage. It is an instrument tying the interest charged as per a specific index—such as the LIBOR (London Interbank Offer Rate). The interest rate “adjusts” on a specified date and fluctuates with market movements.

Deciding between a fixed- or adjustable-rate instruments depend on current interest rates and market conditions. The fixed-rate interest (set at its origination) continues throughout the loan’s term. Its benefit is: the borrower does not contend with future unknown loan payments.

The adjustable-rate tradeoff is twofold: the potential risk is future interest rates are far higher. If interest rates fall, however, a lower initial payment is not the only opportunity: the actual monthly amount, from then on, as a “fixed rate,” would be adjusted downward, too.


Although while an initial lower rate may be advantageous, there is a high probability that the required payments may (temporarily, at least) rise and not fall. Therefore, correctly projecting the time frame of owning (before selling and retiring the loan), matters in the equation when considering the adjustable-interest rate date time to adjust the rate.

A second consideration is whether the instrument includes a cap, which determines how much the interest rate can rise or fall, and how often the interest charged may change within a given period.

Several additional mortgage types, though not always applicable in Manhattan’s multiple-family dwellings, include:

1. An assumable mortgage—which may be transferred to a new qualified owner.

2. A Balloon Mortgage—with a lower regular monthly pay down amount—that is retired with one (or several) lump-sum payment(s), within a stated term.

3. Interim Financing—a temporary bridge or short-term swing loan is secured by equity in owned property—before a standard mortgage is in place or when a “present home” is on the market to sell.

4. A Second Mortgage is always subordinate to the primary mortgage and collateralized by a secured property, which requires board approval in a co-operative apartment house. (Re-Fi or refinancing a present mortgage is considered more appropriate to present to a co-operative board of governors.)

5. A Home Equity Loan is essentially a line of credit that allows the borrower to use their equity as collateral; by convention, it is a straight-term (interest-only) instrument.

              • The loan amount is based on the difference between the property’s current fair-market value and the remaining mortgaged amount (the principal balance). Furthermore, a home equity loan most likely has substantially lower initiation fees—although it carries a higher interest rate.
              • When the line of credit is drawn down, the financial institution holds a second mortgage until the principal is paid off. If payments are not made, then the pledged real property could be foreclosed, and sold to pay off the remaining debt.

5. A Home Equity Conversion Mortgage—advertised as a “reverse mortgage”—allows an owner to convert equity into cash by receiving monthly payments against their property’s value. These mortgages are devised to allow a senior citizen to convert equity in their home into cash. The amount borrowed is based on the appraised value of the home, subject to limits set by the Federal Housing Administration (FHA), and the borrower must be at least 62 years old. In addition, because real property secures the mortgage, no credit check is made on the borrower.

Here’s how it works:

              • • Cash is advanced against the value of the home—not based on income—and interest accrues on the outstanding loan amount; but no interest payment is made until the property is sold or the borrower(s) die(s) at which point the principal and accrued interest is repaid in its entirety by the sale proceeds.
              • • Interest rates on such loans are usually adjustable rather than fixed, even still, they remain lower than standard second mortgages or credit cards.


Qualifying for a loan

Mortgage qualification has four key elements. Three criteria regard the applicant’s personal finances; one pertains to the collateralized property.

                1. Creditworthiness, exhibited in a credit report, is an individual’s credit history and debt service record. The credit score is a snapshot of how credit line and credit-card limits and payments are managed.

2. Net worth, derived by a financial statement, is all current assets minus all liabilities.
3. Income flow, expressed as the Mortgage Qualifying Ratio, identifies the disposable income proportion designated for housing costs.
4. The collateralized property must qualify as having been purchased within its fair-market value range. The portion to be financed is expressed as the loan-to-value ratio.

Credit reports

Three major credit bureaus maintain a detailed report of every individual’s credit history: the institutions issuing credit, types of credit, the total issued, and the amounts available in each account. These databases accumulate personal information, including current and previous addresses, social security number and employment history. Their data summarizes— indicate—credit worthiness. The overall report process and detailed credit score is available to the public.

The report covers:

              • Open credit accounts;
              • Total debt issued;
              • Total debt issued;Legal information, such as liens and wage garnishments recorded on the federal, state, and county levels.

Since the credit report is a snapshot of credit-limit management over time, new positive credit information does accumulate quickly. The credit score can be raised as debt obligations are paid promptly and paid down gradually. (Oddly enough, credit scores do not reward a balance pay off, closed accounts are not necessarily reflected favorably, and unused credit is neutral. In addition to tracking your score, it is possible to monitor whoever seeks credit history reports from the three bureaus.

Credit fraud does exist however. Frequently ordering your credit report marginally lowers a credit score with each inquiry. Disputing credit report information, moreover, is painstakingly difficult, especially to clear negative notations. Negative information remains on the report for approximately seven years; typically, bankruptcy filings remain on the credit report for ten years.

Financial Statement:

The guideline for principle amount is an individual’s previous financial activities and net worth. It is typically contained on a single form that lists personally-held assets and all forms of liabilities. (Incidentally, the same statement is submitted with a co-ownership application, however, the governing boards review the information differently.)

1. Assets are listed individually in the following categories:

              • Liquid, the most important single factor, and defined as readily convertible into cash. Liquid assets are cash and money market accounts and open-market stocks and bonds investment accounts
              • Liquid assets are privately held corporation stocks and bonds, the equity portion in real estate owned (the loan is a liability), and professionally appraised artwork.
              • Personal effects, such as furs, jewelry, and antiques, must be appraised and insured. Even so, personal effects are not calculated in the loan amount determination.

2. All debt is a liability—whether a short-term as a revolving line or long-term such as a mortgage obligation—and each amount is listed with the term.

3. The individual’s net worth is derived by deducting the total liability column from the asset side.

Securing a mortgage

Mortgage Qualifying Ratio determines a buyer’s ability to service a loan. The result demonstrates disposable income by calculating gross income minus fixed monthly loan payments. When expressed in dollar terms, the ratio indicates cash flow available for housing costs: When expressed as a percentage, it is telling by revealing an over-leveraged applicant. Furthermore—your Mortgage Qualifying Ratio has everything do to with the interest rate that will be offered.

A mortgage commitment by a lender requires a fully-executed contract for a specific real property, which is to be pledged as collateral. The four stages (origination process, in lender lingo) when applying for a mortgage instrument are, as follows:

  • Pre-approval indicates that under current circumstance, an underwriter has reviewed the application and would agree to lend the bearer up to a stated principal amount.
  • Pre-approval letter is a written opinion (still not a pledge to loan) that the applicant is creditworthy up to a stated amount. No time period or interest rate is stated.
  • Prequalification is a written opinion letter regarding a purchaser’s creditworthiness, which states a specified amount, and repayment term, such as in 30 years, 15 years, or 10 years. (It is issued after considering a credit report and score, debt servicing and income flow, and liabilities and assets. The opinion does not include an interest rate or financial charges.)
  • The lock-in rate, as a specific mortgage instrument, the exact terms and conditions are spelled out as a guaranteed loan amount, the interest rate, and the term.  The appraised real property pledged as collateral is stated.

Mortgaging Costs

Above and beyond interest on the principal amount, several fees are charges by the lender to the borrower.

They include several standard fees:

  • Credit report(s) ordered by the lender are charged to the applicant.

(An add-on amount is allotted to review the credit history information.)

  • A mortgage application fee is levied to cover the costs of processing the loan application. The fees are a buyer’s closing cost, and payable upon conveyance.

(In some instances, however, the buyer is asked—by the lender prior to closing—to pay the fees.)

  • A service fee is a one-time charge to cover the lender’s business costs.

(It may be paid at the closing, added to the principle amount, or paid as additional mortgage points—calculated as a percentage of the principal amount—paid up front. In addition, a mortgage broker’s finder’s fee may be included as a small portion within the interest charged, or it can be a portion of the service fees.)

  • An appraisal fee is ordered by the lender, and the licensed appraiser’s fee is charged to the applicant.

(Lenders require that an appraisal is performed as a precondition. The appraisal verifies that the purchased property, which will collateralize the loan, is equal to {or greater than} its fair-market value.)

  • Discount points may be paid by the buyer to the lender.

(A discount point is a one-time, pre-paid interest amount—one point equals one percent of the loan principal—as an alternative to higher interest rate payments throughout the loan term.)


Finally, though minor, there is an often overlooked New York City mortgage tax due at the conveyance of real property on the amount purchased with a loan. However, to date, the tax is not imposed when co-operative or condop shares are conveyed.

Qualifying the collateral property

A bank appraisal evaluation should not be taken as the property’s fair-market value. By definition, it is the amount a seller not under duress would except in current market conditions. A bank, however, assumes the recovery value to them is a distress sale (at least somewhat), because the property will be unoccupied, unproductive.

At a given point during the final origination process, a real-estate appraiser enters the property for an inspection. There are two professional methodologies used. The replacement-appraisal approach is best applied to unique properties—not usual or applicable for Manhattan multiple-dwelling apartment houses, where a similar unit recent sale history is readily available.

The valuation- or sales-comparison approach estimates the target property’s worth to include all known facts—location, room count or square footage, age and condition—in comparison with like properties, in order to pinpoint the current market value in exchange. Manhattan lenders consider this current market estimate, which reconciles correlating recent sales (“sold comparable”) and currently available competition (properties “on the market”): it thereby adjusts supply and demand accordingly in the property’s value. The recent sales documenting the data used for the evaluation are included with the appraisal report.

Along with the cash-down amount required by the lender, (notwithstanding the “board” requirement) the result determines the “loan-to-value” (LTV) ratio. This ratio is crucial if the cash payment is less than 21% of the purchase price. Lenders then require the borrower to purchase a “private mortgage insurance” (PMI) policy, which is costly. On a subsequent appraisal, or through a principal pay down, if the ratio rises to 22%, the PMI requirement (on request) may be eliminated.

Servicing a mortgage

The monthly interest payment made to the lender, by the borrower for use of capital is Loan Service. An amortized mortgage payment includes a pay down portion, a straight mortgage payment is the interest onl

The effective interest rate is the actual interest paid on the principal amount. The prime rate refers to the most favorable interest rate a lender can offer. Therefore, the interest rate offered to an approved applicant can be expressed as a digit, or as “prime plus.”  Those “plus percentage points” added to the prime rate reflect the borrower’s perceived creditworthiness.

Prepayment means paying down the principal balance before its due date—the point when the loan reaches full amortization. A pre-payment clause states the penalty (surcharge) for paying off a principle portion (the remaining loan amount), before the mortgage’s full term.



An adjustable-rate mortgage, abbreviated as A.R.M., is an instrument in which the interest charged is tied to a specific index on a specified adjustment date.


Amortization occurs when a mortgage payment applies to interest, and the remainder to borrowed principal, until zero is achieved.


An appraisal is a property’s evaluation for the purpose of securing a mortgage.


An asset/liability statement is a list of investments and debts: assets minus liabilities equals an individual’s net worth.


Assets are investments or items of value; a liquid asset is one that can be readily converted to cash.


An assumable mortgage is an instrument that may be transferred to a new qualified owner.


An Aztec recognition agreement acknowledges that a lender in a co-operativeownership apartment house has an interest, and permits recourse if a borrower defaults.


A balloon mortgage is an instrument comprising monthly payments, retired with one lump-sum payment.

A comparative market analysis, abbreviated as comps, evaluates recent similar property sales compared with current competition in the marketplace, to determine a property’s current market value.

Conventional mortgage refers to a home loan meeting government criteria.

A credit report reflects an individual’s credit history, and is used by co-ownership management companies and landlords in verifying an applicant’s creditworthiness.

To default is to fail to perform an obligation.

Discount points refers to any additional percentage of the loan amount for which a lender asks.

A down payment is the cash portion of the purchase price; the remainder is the amount financed, determined by both the lender and the house rules and policies.

Effective interest rate is the actual interest paid.

The fair market value is an agreed-upon purchase price under free-market conditions: reasonable competition among buyers; limited pressure on the seller.

The finance charges to a borrower include an origination fee, a service charge, discount points, a credit report fee, the often forgotten finder’s fee (to the mortgage broker), New York City mortgage tax, and, of course, interest.

A financial statement concisely accounts for an individual’s or a corporation’s financial activities.

A fixed-rate mortgage’s interest rate remains constant.

A foreclosure proceeding seeks to enforce a past-due mortgage or lien payment.

Fully amortizing mortgages are ones that are paid down at full term.

The Home Buyer’s Guide is a booklet citing government regulations concerning the financial aspects of a mortgage settlement.

A home equity conversion mortgage, referred to as a reverse mortgage, allows an owner to convert equity into cash by receiving monthly payments against a property’s value.

A home equity loan or line of credit or second mortgage, against the equity of a property, requires board of directors’ approval in a co-operatively-owned apartment house.

The inflation rate is the increased amount of money necessary to purchase same goods and equal services.

An instrument is a legal document.

An insured mortgage includes a private-mortgage insurance (P.M.I.) clause guaranteeing monthly payments.

An interest-only mortgage does not pay down, or amortize, the principal, which is paid entirely at the end of its term.

Interest rate is the percentage charged for the use of money.

Interim financing is a temporary bridge, or short-term swing loan, using equity in owned property, before a standard mortgage is in place, or before a present home is on the market for sale.

A jumbo loan exceeds a regulated limit and carries a higher interest rate.

Lender refers to the original lending institution.

Liabilities are financial obligations.

A loan is borrowed money.

A loan commitment is a lending institution’s obligation to grant a principal amount.

The loan origination fee is the finance charge, above and beyond interest, imposed by a lender; loan service is the payments to a lender for the use of its capital.

A loan pre-approval letter is a lender’s opinion—not a pledge—that the loanseeker is creditworthy up to the amount stated; a time period and an interest rate are not stated.

A loan-to-value ratio places a percentage of the current sales price as compared to the loan amount.

A lock-in rate is a guaranteed interest rate available to a borrower on a specified instrument and for a stated period of time.

Market price, or market value, is the amount offered by a willing buyer and agreed to by a seller, provided that both are performing under normal conditions and in reasonably good mental health.

A mortgage broker arranges a loan between a lending institution and a purchaser.

A mortgage instrument is the document granting a set mortgage-principal amount wherein a real-estate property title serves as collateral, ensuring that the mortgagor (obligor) will fulfill the obligations and satisfy (make full repayment) the mortgagee (obligee), according to prescribed terms and conditions.

Mortgage points comprise a one-time charge—calculated as a percentage of the principal amount and paid up front—to cover the lender’s business costs; the origination fee is an additional service fee over and beyond costs

A mortgage-qualifying ration is a calculation of a buyer’s creditworthiness, using housing cost as a percentage of income, including monthly debt, such as average credit balances, loans, and revolving credit balances.

A mortgage satisfaction document is generated by a lender immediately following final payment.

Mortgage tax is levied by New York City at every conveyance of real property purchased with a loan.

A negative amortization, or payment cap, is a minimum payment that does not meet a revised or fluctuating interest rate, which causes a deferred shortfall and is added to the principal balance yet paid down.

A no-points loan includes a lender’s costs with principal to be repaid.

A note is the portion of a mortgage instrument that calls for the borrower to repay the loan, and includes the time period and interest rate.

The origination fee is the lender’s charge to grant a loan.

Origination principal balance defines the mortgage amount before the initial payment.

A payment-change date occurs during the month immediately following that of a notice of an adjusted interest rate.

A periodic cap is a limit to an increase and/or decrease in the periodic rate charged during a given period, regardless of whether the index used to calculate the mortgage-rate fluctuation becomes adjusted.

Pre-approval occurs when, under current circumstance, an underwriter has completed an individual’s review and would agree to lend up to a stated principal amount with specific real property as the collateral.

Prepayment is the paying down of the principal balance prior to its due date, when the loan reaches full amortization.

A prepayment clause cites the prepayment penalty, or surcharge, for paying down a mortgage before it has reached full term.

Prequalification is a written opinion regarding a purchaser’s creditworthiness after the consideration of a credit report score, debt and income flow, and liabilities and assets, readily available as cash, as well as those illiquid.

Prime rate refers to the most favorable interest rate a lender is able to offer.

Principal, interest, taxes, and insurance, abbreviated as P.I.T.I., comprises the four elements included in a conventional mortgage.

Private mortgage insurance, abbreviated as P.M.I., is required when the cash-down portion is less than 20 percent of the sale price.

The Real Estate Settlement Procedures Act, abbreviated as RESPA, regulates loans for which real estate is used as security.

A recognition agreement, between a co-operative corporation and a purchaser’s lender, evidences ownership in the corporation with the right to possess the apartment collateralizing the loan.

Reconciliation is an appraiser’s adjustments when correlating a comparative market analysis, or comps, of a target property.

Regulation Z defines the Federal Consumer Credit Protection Act rules and guidelines requiring lenders to fully disclose the terms, conditions, percentage rate, and any other charges to a borrower.

Repossession is the taking back of a property due to breach of a contract, particularly associated with nonpayment of a mortgage loan.

Revolving credit or debt allows the purchasing or borrowing of funds against a pre-approved, unsecured credit line.

A sales-comparison approach is the equivalent of a comparative market analyses.

A second mortgage is always subordinate to a primary mortgage.

A service fee is paid by a borrower to cover a lender’s business cost, paid at the closing or added to the principal amount.

Servicing a mortgage is the making of payments by borrowers.

Supply and demand is the economic principle that the greater the supply, as compared to market demand, the lower the value; it follows, then, that the smaller the supply or greater the demand, the higher the value; by evaluating a property’s scarcity factor, an appraiser adjusts the market value for supply in relation to demand.

A term or straight-term mortgage requires interest-only payments until said term ends.

An underlying mortgage is the equivalent of a first mortgage when a wraparound mortgage is in place.

A valuation approach comprises all know facts, including location, age, square footage, and condition, which indicate its value in exchange—the current market price.

A wraparound mortgage provides funds that supplement a first mortgage, or underlying mortgage. 




  Interpreting Market Activity Reports

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Note: The benefit to remaining on top of current trends cannot be denied. It is counter-productive, however, to consider an impression gleaned from the latest market reports as attaining expert status.

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A market-activity report monitors key performance indicators over a specified time period. It is crucial that the data reported is generated from a trusted and verifiable database source, such as a bank or appraisal company, a major mortgage or respected real estate brokerage firm. Typically, Manhattan sales-related data is offered by categories.

  • Co-operatives
  • Condominiums
  • Town houses

This averaged data is represented by quarterly bar graphs. The market trend lines are charted, recapping the yearly data on graphs, by:

  1. Sale price;
  2. Sale volume;
  3. Current Inventory;
  4. Room size;
  5. Time on the market, stated in days.

In addition, there are long-term, multiple-year reports that are an important guide when looking for how the Manhattan real-estate marketplace performed over time.  While helping to keep abreast of the overall market, each is still a generalization, not an ultimate finite market indicator.

Generalized Surveys

A segmented report is a somewhat more precise tool, which increases familiarity with your overall specific target area. These report’s correct interpretation is important to the decision-making process for the seller, buyer, and investor. In each case the important factors to take into account are the general indicators of market activity (when putting it on the market as the seller, and before entering any negotiation as a buyer). These report trend lines summarize the year on comparative graphs, charting above and beyond the above averaged sales data, delineated as:

  • The cost to finance, in relation to the median sales price;
  • Sales volume, in relation to inventory;
  • Listing inventory, in relation to interest rate variations.

More precise and better still, short-term charts track several quarterly market activity reports offering averages, of:

  1. Inventory at price point intervals (for better supply and demand inference);
  2. Sales volume at price intervals (for steady inventory supply comparisons);
  3. Price fluctuations at price intervals (for the median demand deviation);
  4. Time on the market, which is only marginally reliable as a comparison, because many factors are not broken down, for starters, condition.

Neighborhood Breakdowns

Each part of town fluctuates independently and closely, however, seldom absolutely or simultaneously. Including seasonal draughts throughout the city, certain Manhattan locations within every neighborhood command higher prices than others, such as near to Riverside or Central Park, and on Washington Square or Gramercy Park. With the same cache, certain prime neighborhoods, for instance, the West Village, SoHo, and Tribeca, enjoy faster and higher appreciation during a boom cycle, as well as act as a magnet for the immediate area. Equally, these locations tend to hold their value during overall slowdowns. Important information, for a seller to sell quickly, even better, more profitably; for the buyer, is to either recognize that these are the market vicissitudes, or to demure and look elsewhere; for the alert investor, watching for these signs by reading market-activity reports are a guideline as to their real-estate investment’s near-term illiquidity. An additional must step further, is determining potential rental income (neighborhood by neighborhood) versus ongoing associated fixed costs, and then calculate their bottom line benefit and risk.

Finite Market-Activity Reports

While keeping abreast of the overall market provides a general overview, these surveys are not indicative of the market performance within any specific individual segment. Therefore, all-averaged marketplace sales report are hardly the whole picture: they are mere snapshots, if you will a series of snapshots as trend lines. Generalized specifics—with generalizations spelled out by a pundit—cannot possibly produce anything as precise and as robust as a targeted fair-market analysis for the exact building type, particular size, in a desired location including your priorities, and within your precise price range. Furthermore, that holds regardless of dwelling type, regardless whether co-operative or condominium; likewise, regardless of an available property’s perceived value.

What do they provide? Market reports offer a springboard from which to focus your finite market segment. They can supplement an understanding, point out facts, and clarify hunches. However, the finite analysis results surface the puzzle’s key pieces: filling in the relevant details, usefully shading average and median data, bringing out the high-to-low raw data, and enabling more exact judgments. A finite marketplace report allows conclusions to be based on immediate and short-term data depicting current value, not a trend line. Here is what market activity reports are missing:

  • Where, within a general neighborhood;
  • Which “as in” condition;
  • What valuable considerations—view, for instance;
  • How quickly for each of the above;
  • When a historic trend line direction is currently in effect.

Plus, there should be clear indications as to the near-term activity, supply and demand:

  • In one neighborhood;
  • For one size;
  • Within one price range.

Even as a starting point referring to several reports, each handling the data differently, is a prerequisite. In the final analysis, it is the specifics’ sum total that can color the generalities—in vivid Technicolor—and debunk untold nuances. Our online Answering Service department provides links to reputable market-activity reports, and to the quarterly real-estate professional’s interpretations, and academic’s commentaries in City Desk. What follows is what matters—a calculation process, with unbiased results, and the steps necessary when analyzing a property’s fair-market value.


Analyzing Fair-Market Value

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Note: From here a serious seller can determine the asking price range as well as fair-market value. As inviting as it may be Analyzing Fair-Market Value is not always a seller’s optimum entry point to determine a negotiation strategy though.

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Before you can begin to understand, or know what to expect and the steps you need to take, here are the frequently asked questions with their encapsulated fundamental answers.

  • What is fair market value exactly? The dollar amount that a sane buyer will pay, and a seller, who is not under duress, will accept, considering current market conditions.
  • How is the dollar amount calculated? Comparing one target property to closely matched, recently sold properties determines the current market value.
  • Why take the analysis another step further? Objectively culled, similar current listings further indicate the present inventory, and therefore the asking price as a range.
  • When are enough listings gathered? Four like apartment houses, nine sold properties and 12 current listings within those apartment houses. Immediately this first broad sweep is the initial finite market-activity report fodder.
  • Who benefits from running the sifting phases and analyzing the results? The seller, buyer, and investor—all for different reasons, but the most gained is by whosoever screens the data correctly, culls, evaluates, and interprets the results objectively.
  • Where is the best place to start? Read on.

Taken one phase at a time and when properly executed, the results pinpoint current market value as the median of a mode (most often in the set).  In other words: the mid-value where like sold properties are clustered. The peak (top) and the nadir (bottom) define the like the property’s asking price range. These amounts are the most recent, consistent, market-tested value range.

It is a good (not exact) science that produces a black-and-white snapshot, leading to pat answers which do not need a Statistician Emperor to decipher. This particular analysis, however, cannot factor in the results innumerable manmade circumstances—human nature or personality traits, to name three. For comparison purposes, the evaluation first eliminates apartment house inequality—exactly as:

  • Neighborhoods within a part of town;
  • Condominium from co-operative co-ownership,
  • By financing requirements,
  • Pre- from post-war;
  • Services and amenities provided.

It is clear, therefore, why a seller would access their property’s value: to achieve that “number,” at a minimum—if not more, a premium. Moreover, narrowing to highs and lows then reflects the asking price range. Furthermore, the number of like properties sold, when compared to the present available properties (inventory) partially indicates probable time on the market at the high-end of the asking price range: more about that, along with other marketing short-circuits guidelines, in their own good time.

Equally so, from a second viewpoint: a buyer pinpoints a dollar amount and determines where that property should (note—not necessarily “will”) trade within set financial factors—mortgage approval amount, fixed monthly costs, etcetera. Defining the final offer and deciding on an effective opening-offer strategy (to best reach that number) then can be charted.

As an investment, estimating the bottom line requires contrasting one more element: potential revenue. From the rental marketplace surveys (reported rental rates and vacancy ratios) an investor gleans at what contract price that (specified bedroom count) property becomes investment grade. Since purchase price is tantamount for mortgage service, and as the largest budget constraint, would that property, in that neighborhood support a return on investment goal?

The same filter process for units (within qualifying apartment houses), by size, and from there its unique characteristics are refined into subsets—outdoor space is defined as terrace or garden or balcony, and suchlike. And then, by including the cost to own factor, relative affordability comes to light.

Step One: Isolating Like Samples

One golden rule applies: A qualified apartment house and its listings must be as exactly matched and as like as feasible. It is true and vital, especially for each sold property to be included. A handful of preliminary pointers are:

  • From the onset, a tried-and-true method is identifying a close match, one with all the important similarities—only.
  • A realistic precaution, even more so as the process becomes finite—use an equal even-handed standard across the board.
  • Throughout, beware of “red flags”—for instance, a high maintenance slipping in. Investigate the “probable cause” before finalizing your decision about inclusion.
  • All moderate “like” matches—definitely not mismatches, though— within a perfectly matched apartment house hold the possibility to be included, depending on sample size. They are additional fodder for the ongoing finite activity report, too.
  • A property owner should visit every property (regardless of the compatibility to their unit) within their building as each comes on the market, and save the show sheets for future reference.

Isolating Like Apartment Houses

An apartment house’s location always (always-always!) has an important effect, which is hardly arbitrary, only relative. It is considered first as the primary qualifier therefore. Unraveling which “nearby” buildings—with like co-ownership and including similar dwelling type features— is straightforward, and objectively deduced throughout each Manhattan neighborhood. To equate a corner with a mid-block apartment house always requires more scrutiny: all but a few have a smaller footprint. Furthermore, they are built-out with fewer, smaller units and for the most part scaled-down amenities.

Proviso Number One: A balance must be reached when additional property samples are needed. The fallback position is location within the neighborhood. This, then, is one parameter that can be marginally adjusted: by small increments, at that. If in doubt how far to extend a boundary, helpful orientation strategy is found in Navigating Manhattan, Parts of Town.

Decision-making starts with answering “yes or no” for location and the six criteria: “Yes” for a match and “no” if not. Indeed, a truly comparable apartment house does match the location and six qualities, with a yes. The purifying evaluation comes by comparing a nearby building’s attributes side-by-sides with the target building, and counting each yes. Put aside the scores below six—for future finite market-activity report references. Thereby, equal attributes are further clarified to the remaining best matches.

Proviso Number Two: The less desirable fallback tactic (if confronted with insufficient qualifying buildings), is ranking the amenities—limited to common space, garage, and exercise facility, and according it as a high-five- yes building. The onus, thereafter, is an included property on the market must be very-very equally matched.

With that said, tampering with the criteria structure will complicate the analysis, and require increasingly extensive adjustments for each exception made. Too many exceptions risk the integrity; too loosely applied guidelines jeopardize the analysis entirely.

  1. Co-operative or condominium ownership

Proviso Number Three: a condop is considered as though a co-operative. Though ultimately, these units may well trade in their respective higher price range, especially when a prospective buyer wants (needs) to bypass a board-interview prospect. See Key Concepts of Co-ownership for further investor considerations.


  1. Dwelling type, full-size apartment house or smaller building
  2. Pre-war or post-war or post-war or modern tower, each being a subset
  3. Services, in particular the lobby coverage and elevator security
  4. Amenities, such as a common garden or meeting room
  5. Financing allowed, stated as a percentage of purchase price

Proviso Number Four: Co-operative ownership financing guidelines fall into six sub-categories.

  • The norm is 25%
  • Thirty to 35% are compatible
  • Forty percent connotes high financial statement expectations
  • Fifty percent is a separate category, indicating higher expectations
  • One hundred percent cash-down building, even higher expectations
  • Below 25% baits questions, if not a condominium)

Certain differences are not germane.

  • House policies and rules, regarding pets and laundry in a unit
  • Lobby and hallway decorations, unless noticeably subpar
  • The financial well-being, unless the monthly fees are remarkably high or low
  • Other issues discovered by due diligence only (land-lease co-operatives as the exception)

Isolating Like Units 

There are more exceptions than rules, so the property inclusion rulebook first includes distinct categories, as:

  1. Comparable and recently sold properties. They are prioritized as most recent followed by later dates, within each target and nearby buildings separately.
  2. Competitive and available properties. They are always selected by matching, and not based on asking price.
  3.  “In Contract” units are not viable for the fair market analysis, because like sold units cannot be seen, and the exact contract to purchase amount is unknown.

Proviso Number Five: The agreed to amount will remain closely guarded until the transaction is consummated. General knowledge of a previous contract price would constitute an ad-hoc asking price— presumably, it is the amount the seller would again accept.

“In Contract” properties are a highly useful, however. Uniquely, by definition “very recent,” make these properties a bell-weather, second-proof standard where to peg the asking price within its range. Moreover, they provide an excellent clue as to time on the market, and therefore are a market-trending indicator.

Proviso Number Six: A short time on the market with no price reduction—the reasonable assumption would be the owner accepted near its fair market value. Beyond that only your infinite marketing report data allows a hunch to better speculation.)

The selection criteria are:

  1. Over time each competitive property should be seen;
  2. A one year maximum, with abundant samples, although tighter time frame is better;
  3. Put aside, as an “alternative” doubtful data that needs further verification;
  4. Avoid mismatches by following the outlined guidelines.

Given: The target property apartment house is the optimal source for sold and available units: Because it is the prime comparison source, the sort principles, not ethical standards, loosen. The one-year time frame can be extended (hopefully, marginally and adjusted late in the analysis for subsequent market trends. However, laxer isn’t free-license for “unreasonable adjustments,” for example, likening a one-bedroom to a two-bedroom unit, and so forth.)

The same line is ideal but a circumstance that rarely exists, and unlikely except in a large apartment house. Therefore (in the prime source), search for units holding equal shares. If share allotment is not available, equal monthly or yearly maintenance or building fee is an equivalent.

Proviso Number Seven:  Within the target property house, the share or real-estate tax apportionment is two unit’s relative value ratio: both were approved in their offering plan and prospectus by the Attorney General’s office. The offering plan and prospectus includes the original purchase price and additional shares allocated per floor as well as other apportionment features—such as outdoor space. Refer to those documents whenever possible.

The binding precedents are:


The bed- and bathroom count (assumes a kitchen and living room, at minimum, is included), being the primary consideration; square footage is secondary (even as it differentiates a large, medium, and small unit within the room count.) An in depth discussion on qualifying square footage (for a co-operative and condominium) is taken up as an Addendum, Reading a House Plan.

The bedrooms and the entertaining space total, which includes the living room, dining room, kitchen, and any additional space, servant’s quarter’s and/or library—defined as having a window—constitutes the total. Combo apartments, moreover, have far less room count accountability, although any created space must still have a window.

Room Count Rules

  • Foyers (no matter how grand), or home-offices (no matter how resourcefully designed), or storage areas (no matter how ample), are labeled what they are—definitely, though, not a room.
  • A reception room—when off the entry, serving as a cloak room— is countable, however.
  • Half-room is commonly used to designate a dining (without a window) area less than six feet wide.
  • A bathroom is not a room, and a powder room is a half-bath.
  • An eat-in kitchen is one room; a pantry, even including a window, is counted within the kitchen, as in—kitchen with pantry.
  • A separated, windowed breakfast area is a room, whereas, a breakfast nook, as such, is not a room.
  • A dressing room is designated with its master bedroom.
  • A niche, even one with a picture window, is not a room.

Room Count Shorthand

  • A three-room apartment has one bedroom; a three-and-a-half has a dining area.
  • A four has two bedrooms, a four-and-a-half has a dining area.
  • A classic five is two bedrooms, with a dining room.
  • A classic six is a five, with a maid’s room.
  • A straight six has three master bedrooms.
  • A classic seven, add a library to a six, which could be a third master.
  • A classic eight has three master bedrooms and two maid’s rooms.
  • A classic nine, add the library (convertible to a fourth bedroom).
  • Tens rooms (simply are not at all that classic) add-on another master bedroom or two and three maid’s rooms.
  • Twelve-or-more-room apartments have three-or-more entertaining rooms, four or more masters (with baths), and sufficient servant’s quarters, including a servant’s hall, for the help to darn socks, burnish brass, and eat-in.


Out-of-the-ordinary apartment feature, such as duplexes or double-height artist studio apartments or combo (two juxtaposed) apartments are best served when compared to one another, and outdoor space, in particular a terrace, is an immediate qualifier. Furthermore, within general “outdoor space,” a balcony and garden are sub-divisions. The best developed explanations for their differentiation are found in the Educating Yourself sub-glossaries.

Proviso Number Eight: The overriding principle is many buyers will move on a unit with a balcony (and not use it) but a terrace- or garden-lover won’t easily consider a protruding balcony—no matter how generous.


Initially, as many sold properties as possible in the like “as is” condition should be included. Contrariwise, each available comparable property must be a perfect condition match.

Proviso Number Nine: Condition is always a “special” consideration, to a varying degree one that can be weighted in order to create equality—if and when the other important parameters equal the target property perfectly. One, possibly two sold units (within the targeted apartment house), after carefully weighting differing “as is” condition, won’t taint the fair market value result.

However, there is no beyond that. Each property’s condition should be judiciously assessed since it has a special effect on price point and marketing time frame. Every adjustment would entail objective reality—free of bias (personal feelings) while conjuring the actuality (cost-wise) of achieving what would be a buyer’s idealized home.

Step Two: Identifying Valuable Considerations

All but a few properties have a valuable consideration. Each is not equal or equally valuable. Granted: adding or deducting a hypothetical dollar amount from an established fair market value to create equality would be a welcomed shortcut. In reality, simply, it rarely works quite like that. It is far easier going, however, when following the overview that only an inherent characteristic (not a replicable change) is taken into account.

Can a renovation create a soaring ceiling or outdoor space or insert a wood-burning fireplace? Or can the living room window view be altered to taste? This excludes high-priority considerations which would be inexpensively installed within the unit, such as updated windows, washer/dryer setup, central air-conditioning, (of course, all only when permissible). In short, there are considerations to be applied to considerations.

Some features do play a significant role in the marketing time frame: Positively, when evaluated correctly, negatively if overvalued; worse, when triggering an asking price reduction; or to good advantage, when seasonality is exploited. While the contract price may not vary much (if at all), time on the market could possibly, and substantially at that. Ask yourself: Is a wood-burning fireplace more appealing November through March? Is outdoor space a bigger plus Easter through Labor Day?

It is fact that buyers pay for each as an add-on. For comparison purposes disregard that considerations actually do hold a subjective importance for specific prospective buyers—this analysis phase now objectively finds matches to the target property. The following are the important desirable considerations.

  1. Private outdoor space
  2. View
  3. Natural light and exposure
  4. Position within the apartment house
  5. A unique feature
  6. Condition

1. Outdoor space, regardless of type, is compared to one another (only) by size, view, and exposure, as well as access from prominent entertaining spaces. A market exists for each. Unsurprisingly, not the same aggregate applies. For evaluation purposes, each the outdoor element must be as exact and as closely matched as possible.

  • A terrace is at a building’s setback or on its roof that is designated for one owner.
  • A wraparound (or wrap) terrace is narrow and falls nearer a balcony.
  • A balcony projects from a façade with access only from a single apartment.
  • A Juliette balcony is for standing purposes only.
  • A garden is a plot of land for one apartment occupant to use exclusively.

2. The view ranges run from panoramic and like superlatives, none (unmentioned) to open, partial, direct or oblique. The view types are:

  • Park is commonly referring to Central Park (though too many others to enumerate now exist).
  • River is from the harbor up along the island’s East and Hudson River shorelines.
  • Skyline is a considered to be a vista.
  • Street (cityscape, in real-estate marketing lingo) only connotes—not a brick wall.
  • Garden is rear—not street-facing—and overlooking other buildings’ planted buffers.
  • Courtyard is a concrete-paved service area.
  • Outer courtyard is street-facing, though usually narrow and unused.


Proviso Number Ten: Is the apartment above the tree line? Trees grow so how much each year, how high above can be important too.

By far the dicey nuance issues arise to rate multiple differences to equals among a skyline- or river- or park-view property. Alternate view types can compare, and these views are likened, as:

  • Is the view panoramic-wide, directly onto, or oblique (a “glimpse,” per advertising jingo) of the skyline, park, or river?
  • Is the view enjoyed from the major rooms only?
  • Are the lesser rooms’, bedrooms and dining room without any view whatsoever?
  • Is the view protected or could the view be significantly altered by a future structure?


3. Natural light—the amount of sunlight, how much and how many hours—matters. Exposure (north, south, east, or west) is closely related to direct sunlight: voluminous buyers’ first impression is light quality influenced. Then, to one degree or another, “bright” does have value over dark. In fact, it is so very important that broker’s schedule open house hours around it; furthermore, a stager replicates sunlight artificially—as a chief goal.


The shading, for comparison purposes, can be scaled to the target property, as:


  • Dark
  • Medium light
  • Light
  • Very light
  • Medium bright
  • Bright


4. Placement within the building reconciles avenue or street, front or rear (or both), or an upper versus lower floor. One apartment house low-floor unit does not equate to another’s (except at first glance), because surrounding buildings create significant differences as to light and view. This demands, instance-by-instance, individualized comparisons therefore.

Additionally, the architect and builder were well-aware every site has prime locations—with greater street frontage and/or open exposures.


  • A corner building has four façades: one facing the street, a second faces an avenue, affording more prime location apartments with better light.
  • The additional two sides have exposures looking onto, or overlooking, the surrounding buildings, depending on elevation.
  • A mid-block apartment house has one primary exposure (the high-floor, rear-facing, apartments may boast a protected, open exposure).

5. Special features (in particular architectural details, which cannot be re-created), are sought-after. Higher ceilings, wood-burning fireplace, windowed kitchen and bathrooms, private elevator landing (so much so, in builder-speak, “marketable”), they are now included wherever possible within new-construction and usage-conversions—especially a mansion and loft buildings.

For every Manhattan property with a unique characteristic, there is a buyer with the desire to live within those features. Conversely, few buyers reject a property because the ceiling is too high or the moldings too elaborate although personal taste governs. Can any-old, perfectly gracious living room measure up to a cathedral-ceiling living room? No, it doesn’t. Is a wood-burning fireplace equivalent to a decorative fireplace? No, it is not.

Proviso Number Eleven: Special considerations in period apartment houses have a premium value. What is more, when designed by important Manhattan architects, such as Hardenbergh, Ware, White, Candela, Carpenter, or Roth, they may up the ante.

6. Like beauty—condition is in the eye of the beholder! Extra thought goes into taking the particulars into account when considering “as is” condition. Several assorted elements by necessity are brought together under one designation—overall condition.

  • One aspect is the walls and floors.
  • The second is the mechanicals, air-conditioning and suchlike.
  • Third, the kitchen and bathrooms are two separate components comprising the designation.

It’s easy to overrate personal taste, blurring the focus, overrate the cosmetic update, or overlook renovation details—skewing the larger picture. Does one property’s bathrooms and kitchen in need of an update comprise a difference? Yes, it does. How consequential? Will examining the kitchen drawers for smooth gliding form an important basis for comparison? Not really. (Touch open-and-close hardware is available.)

Proviso Number Twelve: Obviously, this is an involved part to consider, with inherent pitfalls to sidestep. Overall condition has a major effect on value, on marketing time, and on specific buyer subsets—the largest fits the mid-range tolerance to “doing minimal work.” They’re looking for turnkey—unwilling to undergo an overhaul—most have limited cosmetic updating in mind.


Step Three: Unearthing Amble Samples

Investigating property information sources in order to make a responsible investment is not a leisurely pastime. This is no time for notes on scraps of paper: more likely, index cards to jot down all the thoughts, insights, and hunches are in order. Tracking down recent like-property sales and paring down scads of possibilities properties creates the need for organized folders. Individual four accumulated files for: 1) sold comparisons and 2) current availability in the target apartment house; and 3) sold comparisons and 4) current available in nearby apartment houses, need to be separated to be used in the finite market-activity report are needed too.

Systems need to be in place for inevitable hard copies—descriptive text printouts, open house show sheets, house plans, and business cards. Scanning documents, putting to service spread sheets, and organizing the sample group folders on basic software programs is a matter of personal style when ordering and reordering properties to compare and evaluate. Whatever works for you!

Stick-to-itiveness is fundamental. Locating as many possible sold, either as matches within the target or nearby apartment houses, is vital to avoid unwanted surprises. Equally crucial is searching and combing the alternate routes available to compile an all-inclusive, robust sample grouping. The process likely refines eight to ten “good” samples, to six to seven “better” matches, to the five “best” sold comps, and as many competitive equals. That uncontaminated data is the well from which conclusions can be drawn.

Searching For Sold Records

An owner has the right to call on their management’s closing department to furnish the most recent sales. A buyer does not have that access. On the other hand, to discover properties within the nearby apartment houses both seller and buyer rely exclusively on public sources:

  • Online search engines;
  • Brokerage houses—on their Web sites;
  • Co-operative share transfers—in the New York City mortgage tax files;
  • Condominium transfers—New York City real estate tax records.

A true fanatic, one would presume, would search City Building Department work permit files for the wealth of info there. The fact, however, is only verified info, which is reported by two resources, can be included into the final analysis. There is one free primary resource: publishes verified information only. Besides, numerous other resources are available (with varying degrees of being complete and reliability) and each requires a temporary subscription to access the details and database.


Trawling for listing details




A link to a broker‘s Web page is free and very useful, to a point. Exactly how comes up soon. Further details, leading to time on the market and price reductions, especially In Contract property verification, are well-worth the relatively nominal, short-term subscription fee. The best-known, most-used among these secondary (must be substantiated) research sources include:




Proviso Number Thirteen: In Contract properties are fluid and present another hurdle: their status changes (as sold and back on the market, too), are not necessarily announced, so the current available listing sources have to be monitored regularly.


Another excellent, free source is the city-wide and neighborhood newspapers, though none provide conveyance data. Real-estate listing search engines do, however. The New York Times Sunday classified real-estate pages garnered their “industry Bible” status over time. Now, their real-estate Web page is as reliable, particularly to track inventory, and to spot a new listing. A little-known shortcut is other search engine option to plug in a valid co-operative or condominium address; the results turn up a treasure trove. Lo and behold, other currently available properties are there! In certain instances, surprisingly often, an In Contract listing lead lingers in the database.


One step frequently leads to another—for instance, accessing the broker’s Web page is not a trifle. It is not a well-kept secret that most brokers specialize in one part of town: Their Web page likely includes their nearby In Contract properties, too. By noting the other brokers (at that brokerage firm) with a current exclusive listing in the building or neighborhood should reveal suchlike info. What’s more, like current available listings that that brokerage firm represents can be identified through their neighborhood search. While opening the door for their scheduled open houses, it is true that the same access is available on most brokerage firm’s Web site.

The hidden value of checking out these listings is in the digital photographs to peruse. For the bargain-basement price charged, among the property’s marketing literature—data, description, and photographs—the building’s façade and amenities; perhaps, a spa to an exercise space (pretending to be more) can be found. Plus, a random image may verify a valuable consideration stated exist actually, with clues to its relative value.


Furthermore, Google Map and similar searches (in their Earth mode) go a long way to resolve simple issues: accessing the edifice (even though secondhand), observing “curb appeal” (from the street entrance, into the lobby). A secondary source are the commonplace software programs, which enable zooming in to determine the immediate adjacent buildings’ probable effect on the natural light. These searches may well be attached to the listing broker’s Web site or page information.


Additionally, when questioning a building or a particular apartment within it, passing by for a firsthand look will identify the street-facing units’ windows. From notes taken, afterward, the better positioned units—those with more light, double exposure, and better views—can be identified easily on the house plan. While stopping by, asking the doorman about a particular unit’s status or other available properties is a personal style matter. (This should be handled with aplomb and never pushed too far, as in—“Don’t go over the top.”  The doorman is employed by management after all is said.)


And finally, debunking other fine points: Each apartment house’s design presents subjective differences, which are best discerned from the house plan. While a seller may be somewhat familiar with the nearby apartment house units, a buyer should be aware of layout fundamentals in order to relate the defined spaces: Overall flow, room proportions, shape and size, and whether or not the layout meets specific needs. For compete House Plan Guidelines and Reading a Floor Plan, refer to Addendum following Analyzing Fair Market Value.

Visiting Properties

Open houses are a cleared path and sure-fire route to familiarity with the marketplace. The principle advantage is they are availability to be seen. If you will, a visit to an open house is central to honing realistic expectations, which is to say, setting achievable goals. Yet, restricting the fundamental search parameters too narrowly might result in too few relevant open houses to formulate educated opinions. For that reason, prioritize the parameters by starting with those “locked in” criteria. In order to save time and energy, an “absolutely must-have” list—for example, a terrace or specific view and services or amenity, is then considered in priority order.

Two purposes for these initial visits are to determine that the apartment house qualifies as exactly matching the targeted apartment house. Or, to have a firsthand look that the listing fits specific search parameters. On the one hand, these visits are purposeful sight-seeing, on the other, they present the opportunity to further refine initial definitions and refine parameters, such as budget range, location, room count, including bed- and bathrooms, “musts,” and ideal “as-in” condition, even neighborhood by neighborhood where the results will differ.

It is fact comparable spaces vary according to location. Especially as an investor, where the primary rental search parameter is bedroom count, being at the property eliminates a bypassed anomaly: Hidden treasures are out there, presenting a probable bump to the bottom line—perhaps, a low-floor unit, with a pleasant view that has lingered on the market could move off the rental market quickly. Additionally, eyeballing and walking out the layout answers whether any flexibility is there. Could a three-bedroom, one bathroom property hold the possibility of adding a half-bath?


Taking That Get-go Step

  • First, open houses are scheduled on Sundays between late-morning and early-evening usually. Most brokers skip holiday weekends (because the traffic will be light).
  • Next, isolate the properties to visit by going through the Sunday New York Times’ classified section (print or online) as well as real-estate search engines, by using their scheduled open house search.
  • Next, select two brokerage firms with a presence in that particular part of town. Most neighborhoods have boutique real-estate offices; many are street-level with a presentation in their window.
  • Next, search for properties with the target property parameters, and within every nearby building.
  • Next, cull the five or six probable properties to be scheduled by time and convenient locations. Include both apartment houses as well as properties of interest to inspect: too few stops and the process will be very slow; too many and the process can be overwhelming.
  • And finally, upon stepping onto the landing—even before entering a unit and picking up a show sheet—certain qualifying contrasts to the target apartment house are evident. In particular:
  1. “Curb” appeal—general appeal and details, such as the canopy, plantings, entry doors, intercom;
  2. Common area care, particularly the lobby lighting and details, like fresh flowers, elevator cab and landing décor, or a slack trash collection area, each floor has one;
  3. General upkeep—clean carpets, polished floors, marred hallway walls and doors are neglect’s tell-tale signs;
  4. The basement—permission to go there should be cleared with the doorman or broker—the laundry and storage areas as clean and orderly, at minimum.


Practical Observation Guides

1. Before ringing the bell, look up and down the hallway because a simple litmus test is: Do you envision coming home here?

2. Move past the unit’s décor immediately (as immaterial) to the show sheet, the marketing material.

3. Use the diagram to assess the layout as well as room count—their sizes, proportions, and exposure—according to the house plan.

4. While walking through the space, first look for predetermined priorities, such as higher ceilings, bright exposure, and eat-in kitchen.

5. Note those missing, and where they fall in the priority order.

6. List the property’s positive and negative points; (subjectively is always a plus).

7. Overlooked possibilities, including attributes not thought of as important (and some not considered at all), could pop up on the radar screen, as worthwhile enough to consider—maybe, the difference an open view or ample sunlight make.

8. Whether after one, two or more open house tours, and if preconceived notations arise (and they will!), that cause a pause then stop and reexamine parameter search settings, reevaluate assumed requirements, and reassess priorities.

9. Assuming the property search will begin anew, with refreshed parameters, since budget matters most, it is the first consideration to reexamine, reevaluate and reassess.

Note first impressions on the show sheet provided. First, check the vital facts, data, and details are included. For future reference, separate pertinent thoughts in a note pad or index card; they’re usually more general. These notes may come in handy when planning subsequent open house tours, and advantageous kernels gleaned throughout the whittling phases as well.                For the owner-occupant, the next alternative is compromising on the less important priorities. This step would be fairly easy and not as painful when beginning with the least important. Then, with revised priorities, search again to find the properties worth investigating further. These are depicted in the Marketing Pointers and Principles, included in the Addendum, and refer to Show Sheets. In addition, House Plan Guidelines, and Reading a floor plan will be helpful. What’s more, every “of interest” unit’s show sheet should be ordered as sold and comp within the target building, and sold and comp in a nearby building.

Proviso Number Fourteen: All apartment houses do not permit open houses (most frequently at the high-end; certain brokers too) prefer “by appointment only” open houses to screen potential visitors beforehand. It is polite to advise these brokers that you may not be their buyer, and ask to “piggy-back” with another appointment. (Honesty and accepting a request turndown is a better bet than a confabulated story.)

A Sidestep

Whenever too few properties, or no property whatsoever, come up in an open house search new fodder may be required to cull enough choices. Continue searching scheduled open houses—something feasible may come up on a subsequent Sunday. Depending on your familiarity with the neighborhood and its dwelling types, a further option is to expand the location parameters. When the bedroom or bathroom count is set in stone, so to speak, the alternatives are twofold:

  • Dividing an existing room or erecting a wall to create the extra bedroom needed. (Reviewing each house plan holds the answer if, when, and where it may be possible according to window placement.
  • A half-bathroom alternative to a (second or third) full bathroom, for example, could open up more possibilities.
  • Next, with parameters set wider to find diverse properties, such as larger and smaller sizes, a far wider price range, even with unwanted considerations, even unwanted outdoor space, would gain entry to nearby dwelling types of interest. A quite important point when the neighborhood constraint is tight.

A buyer can put to rest whether expectations (return on capital, for the investor) are higher than the budget allows. Before revamping the parameters, take a quick side step to ascertain the asking price for two or three properties which do meet all the parameters. The purpose:  an “appropriate” price range; consequently, that amount is a milestone (for the owner-occupant, a quality-of-life threshold) for what is gained at slightly increased budget increments. Pertaining to an owner, each price-point milestone represents an affordability plateaus. These contrasts are important when represent on inventory and mortgage rate fluctuations as stalled sales on the finite market-activity charts and graphs.

This side step has secondary benefits, too. It highlights properties to track. For example, just beyond the budget range, which may be a stretch (not an over-stretch, and ideal if and when the asking price is discounted. Though antithetical to the initial condition parameters, a property needing “help,” yet appealing enough to reconsider the unthinkable—doing that work, even over time—could appear in a new light.

In consultation with a team of professionals, a real-estate tax specialist, mortgage and sales broker, a reasonable search parameter strategy should be devised, mandated by the premise: a real-estate search is based in “reality,” and the search for a new home (or investment) does not devolve into an exercise where each foray plays out as yet another “longshot” that doesn’t win, place, or show.

When the price point cannot be revised upward, and after further consideration the room count cannot be sufficiently adjusted, but still too few additional properties are evident, even after revising the lesser priorities, then look to the more extensive search revisions offered in Afterword: Looking Forward. For the investor, fruitful alternatives—without a budget adjustment, without a size or room count compromise, and with many possible valuable considerations included—even unexpected attributes to be considered as an additional gain.


Step Four: Evaluating Properties


What goes into the mix determines what comes out. While exact matches (in every which way) cannot be assured, one significant mismatch will skew the results, causing conclusions to lean in misleading directions. Impartiality is imperative; objectivity is vital. Can one rotten apple spoil the barrel? Sure can and definitely will—if the culprit is the target property. When played by the rules, according to Hoyle, so to speak, the gathered sold and available properties have been purified to the closest, and thereby reduced to the best possible counterparts.

A good educated guess is arrived at by separating biased noise from unbiased signals. Then, it will be further heightened after every included listing’s data is clarified. When any sample sticks out from the norm for any reason, further investigation why is an absolutely necessity to provide reasonable confidence the data can be included.  Fortunately, the resources are available to investigate. Clues how are found in Unearthing Ample Samples, the previous Step.

The first phase is assessing each target property characteristic. Before moving forward, categorize and separate each sample as either sold in the target building, available in the target building, sold in a like building, and available in a like building. Discounting the least comparable within the subsets will be validated easier when related to one another. With so many valuable consideration possibilities, rather than duplicate the complete list, naturally, it is assumed you’ll refer to Unit Facts in Personal Planners; read the description in Identifying Valuable Consideration; and look for exacting definitions in the Lexicon for owners.

The second phase applies “O” to each relevant critical factor. The sum total of the target property’s attributes must be zero. The most comparable units are therefore near to zero. Likewise, a value further from zero is always less so. Needless to say, a perfectly complemented sample property is zero.

The third step is evaluating each sample property without inferring importance: only how they compare, and then awarding the most fitting numeral. Each consideration category is totaled. The individual amounts are then added to arrive at the relative equivalency.

Follow the outline procedures as they move from the least to most complex considerations.  Monthly maintenance or common charges and taxes are followed by location within the building, and then exposure and light. View, outdoor space (whose guidelines are adaptable for many unique features, such as a loft building or townhouse), architectural features, and last, overall condition, which is the most involved qualifying consideration to contrast.

The scale used throughout the three analytical phases extraordinarily streamlined, you’d say simple as one, two, three. The guidelines, however, are not: they’re based on settled principles, as taken up in Step Three’s qualifiers. Each property in then considered a subset and is judged, as:

  • Exact, is O;
  • Excellent match, is -1;
  • Good match, is -2;
  • No match, is -3;
  • Fair, is +1;
  • Poor, is +2;
  • A superior specimen is +3.


Qualifying Guidelines


1. Monthly fee or charges

A note is in order since building fees have not been isolated as a factor beforehand. Absolutely, a variation from the norm does affect the asking price. Additionally, this amount figures significantly in affordability factor. It can be a mitigating factor for the marketing time frame as well. If need be to fill out a sample sub-grouping, the why and wherefore should be looked into—the likely probable causes are extraordinary services; a land-lease co-operative; a flawed conversion-to-co-ownership offering plan and prospectus. While these units, in fact, are becoming increasing an existent commodity, there are buys if “Unsold” shares, which are reference in Owner Lexicon for a shrewd investor’s insight, and if the initial monthly fees (over time) have fallen into line with the majority of like apartment house’s fixed cost nearby.

Proviso Number Fifteen: Each and every comparable figure is calculated (rather estimated) based on the dollar amount per month by the unit’s square footage, which is always just an estimate because per share is immaterial. Even so, a discernible trend line is an indicator enough. The can be determined by eye-balling what the differential as when the apartment house converted as compared to the present, too.

Therefore, the fixed monthly fee subsets should be awarded, as:

  • Exact (O) is five percent above or below the target property
  • +1  is six-to-eight percentage points above the target property
  • +2  is ten percent above
  • +3  is a ten percent higher

It follows then that the numeric scale applies to a lower monthly fee, as minus -1, -2, or -3. The differential, as compare to the target property zero, partially qualifies the cost-to-own factor. (In addition, mortgage service is taken into account in calculating cost to own, which will come in due time, as Step Seven.)

2. Location in the Building

Street-to-rear-facing units are simply never comparable on low floors. Higher floor units can be an equivalent, though only when they clear the surrounding buildings. Moreover, a high-floor property’s value increases by increments according to the light and view quality gained:

  • The third to fifth floor rarely matter significantly
  • The fifth to ninth floor matter more
  • The fifth to ninth floor matter more
  • The tenth floor and above, (and each additional floor as appropriate) may differ dramatically. Therefore, having a potential significant impact

Proviso Number Sixteen: A penthouse sits on an apartment house’s roof, and “penthouse” is synonymous with luxury. While this designation matters, presumably, its set-back position which affords the best possible the building offers. Ample outdoor space, frequently as a partial wraparound terrace, more than likely identified and isolated the property because of its outdoor space. Moreover, there are too many for instances to ever list, and that calls for even-handed judgments spread evenly.

Therefore, location in the building should be thought of in clustering subsets, as:

  • Exact (O) is within two floors above or below the target property, reasonably taking into account the target property’s advantages without discounting its disadvantages;
  • +1 is three to five higher than the target property;
  • +2 are more than five floors above;
  • +3 are seven or more floors above.


It follows then that the same scale applies to a lower floor, as minus -1, -2, or -3. The differential, as compare to the target property zero, qualifies the placement factor.


3. Exposure and light

That there are four directions, NEWS, should not be news to anyone. Nor that many apartments have two exposures, nor that can vary enormously light-wise. The light quality, for the most part, is judged by the prominent rooms, let us say, the living and master bedroom. Less is not more; what is more, direct sunlight equals more desirable. (Keep in mind, Manhattan is not due north-to-south, which puts north as actually north northeast, and so on.)

However, no sunlight is far different from bright light reflected off abutting buildings—both are an entirely different matter than an open northern exposure, with constant light but little direct sunshine.

The issue is not just: What is the light like today? It is would the target property be more or less bright under the same circumstance? This phase of the analysis does not have to be an academic discipline. Luminescence is determined by looking out the window (room by room) to judge whether the surrounding buildings do block the sunlight, if so—some or somewhat, mostly or entirely. Your internal light meter works fine, as (1) dark, or (2) medium light, or (3) light, or (4) very light, or (5) medium bright, or (6) bright.


The overall sunlight quality (regardless of exposure) should be scaled subsets, as:

  • Exact (zero) is the same grade of light as the target property
  • +1 is moderately lighter
  • +2 is more degree of sunlight
  • +3 is noticeably brighter

It follows then that the same scale applies to a lesser degree, as minus -1, -2, or -3.  The differential, as compare to the target property zero, reflects the light-quality matter.


Recapitulation and Encapsulation


The final four steps are to plot the filtered sample property results, to refine the outcome from random and chance to a promising reality, and to determine the fixed costs before devising a negotiation strategy and the tactics to achieve the desired contractual price goal. For a moment, though, let’s put on hold equating the gathered sample properties before the concluding guidelines.


A Bridge forms


Every extra effort and utmost care put into gathering and verifying the nearby apartment house as exact matches with their most recent market history is about to pay off. By any standard, the samples are all-inclusive, market activity data bounded as one subset—personal needs. The ideal number of samples to begin the final phase is six sold units and ten available properties. Half those numbers can be sufficient, depending on the market history and recent activity within the target building.

Each acceptable example has been filtered by qualifying their apartment house as an exact match and likened apartments as a certain match to the target property. And only then, each was screened by many characteristics, and several times for each consideration. Therefore, it is assumed that the target property and nearby apartment house are equivalent, because they were identified by location, dwelling and ownership type, services and amenities as well as financial requirements. On the other hand, it should be noted that a house policy, such as pet restrictions, are not a consideration.

Additionally, it is assumed only equal-size units, distinguished by the total room, bedroom and bathroom count are included. Then to complete the search focuses on putting each valuable consideration through its paces in accordance to rating schedule, by isolating the range of outdoor spaces, views, exposure and natural light, the floor and positions within the apartment house, any all unique characteristics and architectural features, and then condition, of course.

The stand-alone principle is segregating properties by the contract or asking prices have not been an applied factor, yet.  For further surprising tips, there is a host of information available and nuances to garner throughout Educating Yourself. For example—Key Concepts of Ownership defines multiple-dwelling issues or Defining Investment Grade furthers a wider perspective for a family and first-time buyers.


What Comes Now

To encapsulate the specific guidelines leading to drawing conclusions, step by step:


Plotting the Results


First decide whether to use a computer or work from hard copies. Old-fashion graph paper and pencils or computer graphics are equally good. Get out the collected sample folders, and separate out all the target property as sold or currently available units. Do the same for each matched apartment house. Give each property a letter and number. For example, the target building properties start with TS-1 and TA-1, for sold and available. The properties spread out over several buildings start with S-1 and A-1. Place consecutively two or more properties culled from the same building, and use a second letter, such as A-1a. It may come in handy spotting a pattern or while drawing conclusions.  While weighting the samples objectivity was essential, however, now numbering favorites with the first numbers may point to dispelling an expectation early on, which is a good thing!  At this stage, it will respect the art as much as the science

Review your discarded files for properties worth including after fair-market value and the price range has been established. After the sample group is charted, they broaden the finite market report with data such as days on the market or date of sale and a price reduction. These facts are valuable to chart comparative factors, such as inventory as supply and demand fluctuation’s effect on asking prices. When the time comes they can be re-plotted in the form of graphs.


Specifying Principles to define fair-market value’s essential features, expressed briefly as a summarizing outline, encapsulated in a finite marketing report and conventional guidelines develop.

Step Six: Parallelisms are modes 

A few definitions of terms are in order: The mode takes random values to where a relative or absolute maximum occurs, as frequency. Parallelism then is where modes form in which something exists in actuality, as opposed to what is expected, possibility or a describable pattern, as probable, but actual or existence, as more assured.

Step Seven: Calculating Cost to Own

Step Eight: Drawing Conclusions (as negotiation strategy and tactics by knowing the Fair-market Value, Price Range, and Cost to Own)

Think of the Addendum as additional helpers, marketing indicators and principles

Pointing to judgments made by examining the norms of timing and the effect by an effective presentation. There are guidance principles every step along the way, such as the show sheet and accessibility to visit the property. The house plan guidelines allow reading a floor plan and getting the gist by using Personal Planners


Addendum Additional Helpers

Click to collapse a Mastering Manhattan annotation mark with explanatory remarks to refer to or to suggested related info in all our topical primers, manuals, guides, and handbooks.Note: Certain matching criteria are essential, especially co-ownership type, equal permitted financing (for a co-operative), location within the building itself, and every possible valuable consideration.

While a seller need only isolate like valuable consideration (since a smaller sample universe is necessary; however, a serious though inexperienced buyer should cull every possibility) while eliminating the less exact matches.

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It is true that the internet has altered the playing field. Nowadays, more than ever the online marketing plan directly affects time on the market, and ultimately, has everything to do with the ultimate contract price. A well-marketed property’s advantage cannot be overlooked or underestimated.

Well-marketed comes down to a proper price, calculated presentation, organized promotion, and a coordinated public relation strategy. Overseeing each element is implementing the tactics, which remain an owner’s responsibility unless assigned to a broker.

  • Pricing is pegging the property at its current market value;
  • Presentation (staging, in realtor jargon) highlights the positives and camouflages the negatives;
  • Promotion entails announcing to (and continuously reminding) the brokerage community about the listing;
  • Public relations centers on making the property available—especially at regularly scheduled open houses supported by classified and display advertising and online updates. 

Marketing Pointers and Guides

Marketing real estate involves effectively applying the four elements most products require. Our marketing plan developer is a handbook to achieve its fair-market value with three key elements—presentation, promotion, public relations. In short, everything needed and available to refer to as needed.

The show sheet guidelines provide the details, descriptions, and photographs targeted to qualified buyers. A square footage calculating manual differentiates the actual from the stated, and why it matters. A house plan interpreter demonstrates how to extract pertinent information to qualify as a comp or evaluate for personal usability. Our Personal Planner is organized for sellers, by including an owner’s checklist, as well as a complete apartment house data and unit factsheet, and for buyers, by offering every conceivable possibility or the alternative options.

Judging From the Norms

There are pointers, every step along the way, which provide guidance.

Once offered, a property should remain on the market continuously until it is spoken for. Standard apartment house units (in condition to sell) come on to the market will attract an offer—when accurately priced. While almost every property does transfer, some average a longer time frame—for example, apartment hotel apartments do require longer to market because their high monthly carrying cost and minimal tax-deductible portion.

Averting the on-and-off-and-on-again syndrome depends on the owner, and their relationship with their broker to advise against it. However, extenuating circumstance may account for longer time than expected. For instance—an unsigned contract would cause a two week delay (rarely longer); a board turndown (accounts for a three-month delay); unexpected family matters may add a few weeks, perhaps.  An unknown factor during these downtimes is: How many potential buyers inquired? How many asked for a second visit? The effect of a broker saying, “It’s temporarily off the market,” is that potential buyer moves on, and they will find another property. To avoid future missteps: Potential sellers can refer to the right steps when offering their property for sale. It is within the Owner Personal Planner checklist.




Market activity fluctuates throughout the year, always did, probably always will. There are two facets: more market demand supports a higher price, and a stagnant property gradually sends (the allusion) that a seller may be ready to negotiate.

Seasonality is a matter: The two heavy selling seasons, in fact, are spring to early summer, and then early fall through early winter. A relative activity surge following a lull is referred to as “pent-up demand.” Holidays must be considered as well, because they create a lull.

The breaks, which matter most, are:

  • The Christmas to New Year lull remains in place until after the Martin Luther King weekend.
  • While market activity begins to pick up, President’s Week is again another interruption. Market activity then remains steady but relatively light until tax-filing ends.
  • The spring market ends during the days after the July 4th Holiday. Market again is light throughout the summer.
  • Labor Day opens the fall market, and activity remains steady through the Thanksgiving weekend.



Staging can be tantamount to success. First impression is a very big factor. Properly preparing a property requires experience, (it’s a quick study for those in the know). The cost as well as the time involved depends on the starting point. The financial reward is worth all the effort, and that is a matter of fact. One quintessential example is telling.

Once upon a time a prime, nine-room Fifth Avenue apartment sat on the market, like a slug. The continuous comment was “Great space…but…this place needs everything!” Once cosmetically transformed, its new designation became “Move-in.” Selective staging significantly upped the buyer’s accepted offer. In fact, the staging cost was a fraction of the owner’s gain. The prospective buyer is rarely fooled completely; however, they perceive an initial savings, because major work can be put off to a later date.

Simple Marketing Principles

A basic marketing tenet is broad- and narrow-cast the message, with easily accessible data, tempting descriptions, and alluring professional photographs. As no other resource, photographs can depict a property at its best, descriptive text should depict its features, and superlatives cannot replace clarity. The information provided should highlight the possibilities with facts.

The components of a finely tuned marketing strategy include the broader and finite distribution methods, such as:

  • Extensive online exposure through the brokerage firm Web site, search engines, and related internet resources;
  • An initial direct mailing of a brochure. flier, and announcements to prospective buyers in neighboring rental buildings;
  • Advertisements (and continued mailings) to support the regularly scheduled open houses.


Show Sheet

No other tool tops the show sheet, brochure or online announcement—regardless of its format—to get across the “marketing” message, and to entice the potential buyers. The proscribed details below should be concise and precise and written within standard usages. Inferences matter and should be highlighted, however in a specific context.

The apartment house facts includes:

  1. Address
  2. Neighborhood
  3. Dwelling type
  4. Tax-deductible portion
  5. Financing percentage permitted
  6. Current Assessment amount
  7. Ownership type
  8. Services, amenities, appurtenances

The unit data provided is:

  1. Apartment number
  2. Asking Price
  3. Monthly fees as maintenance or common charge/real-estate tax
  4. Room, bedroom and bathroom counts
  5. Private outdoor space, when applicable
  6. View or exposure
  7. Condition
  8. Dining space, kitchen type, additional spaces 


Why is this last? Because three simple, hard-and-fast rules apply:

Availability is the sure-fire marketing element that matters most: visiting a property—as a potential showing, re-scheduled or a second or third visit—is a vital deal-making opportunity, one not lightly denied. All but an outlandish appointment should be honored, therefore.

A second factor is pre-planning open house dates, for the brokerage community and general public, which should be set at the onset, according to holiday weekends and local events, perhaps the marathon or an upcoming community-sponsored street fair. The advertising supporting these open houses—not online announcements as much as newspaper or magazine advertisement—require lead time.

The third truism is practical promotion: Follow-up calls to the buyer brokers, seemingly for “feed-back,” in reality to encourage a second visit, work. Likewise, contacting directly each potential buyer without a broker to ignite or rekindle interest by encouraging another visit. Whether a truism or old-wife’s tale, it is said that, twenty pairs of feet have to cross the threshold to bring the first offer.

As a practical note: It is far more natural when a broker makes these calls on behalf of an owner than for the owner to seem comfortable, rather than overanxious to sell the property.


House Plan Guidelines


To effectively evaluate a property requires a house and floor plan primer. The plan can qualify a comparable sample property, or evaluate investment potential, or personal usability according to needs. It is accepted that one picture is worth a thousand words, and the images provided should speak volumes. Diagrams, on the other hand, are a quick read and useful reference material—whether of the entire floor or just the individual unit.


The apartment house plan has its advantages, such as orienting the unit to the street entrance and elevator bank. The overall floor delineates public hallways and service areas, and locates the units’ placement within the building. The house plan also isolates the street-facing from rear-view apartments. A direction indicator is normally included.


A few simple and helpful axioms are, as follows:


  • Odd numbered apartment houses, for example, Nos. 41 or 411 (east or west) is sited on the street’s north side, and therefore the front units face south;
  • Conversely, an even numbered house is on the street’s south side, and therefore has north-facing front units;
  • Corner apartment houses have one façade overlooking a street, another on the avenue—affording more prime apartments, more likely with better light;
  • Mid-block apartment houses have one primary exposure only, though the rear-facing, high-floor apartments would afford more open exposures;
  • Small dwellings, loft and town house seekers, too, should be aware “dead” spaces –with no light whatsoever—(inevitably) occur.

A floor plan holds discernible facts, which are:

  • The layout or room placement, in relation to one another;
  • Room count, overall;
  • Number of bed- and bathrooms;
  • Dining space, area or room;
  • Kitchen type, galley, eat-in or open;
  • Room proportions, widths to lengths;
  • Special Considerations, such as outdoor space.

There are other clues too: the square footage and dimensions. Room dimension accuracy is easily approximated to be accurate—no standard method exists, but a myriad have been devised.


  • Window-to-wall
  • Wall-to-wall
  • Baseboard-to-baseboard
  • Saddle (an entrance piece of wood, placed as a doorsill) to the opposite baseboard



Let Your Fingers Do The Walking

First, as you scan the layout there could be suspicious “red flags.” Discrepancies between the data and facts need to be identified, and either verified there and then by the broker or owner, or marked for further review and investigation.

Then, it is only reasonable to be skeptical eyeballing a room proportion that seems out of line; one doubtful room measurement baits whether the given dimensions jive throughout. In addition, on aged available house plans, the architect’s original measurements can be partially obliterated and replaced with crisp, clear (new) numbers. To the point, the architect’s rendering consistently had exact (to the quarter inch) dimensions, round figures throughout may be questionable.

Only a redrawn diagram is available for altered units—fused spaces into one room, and certainly, when two confluent apartments joined and a “combo” was created. And so, adjusted numbers may reflect subsequent alterations, or they may be a confabulation. The dimensions must be confirmed at a later point for a property deemed worth to pursue or as a comparison. Would a flooring contractor double-check? Nor should you?

Second, square footage is the footprint, and unit of area. Area is derived by two dimensions multiplied by one another. It is meant to be an exact number: although commonly relied upon, the stated square footage is less than exact.

Facts: A condominium units’ stated square footage total includes an apportionment for common areas. As a percentage, therefore, each apartment house varies. A co-operative conversion offering plan and prospectus never state outright square footage. (Room count, position within the building, floor, and outdoor space are the elements for the share apportioned to each unit.)

Beware: The cost per square foot total is misleading when casual (exaggerated) square footage is divided into the asking price—the greater misstated (inflated) the more deceptive the total square foot total. Worse-case scenario: a totally unscientific formula was used. For example, the major rooms’ area—in feet, from a questionable source—are squared (width times length), plus, a set add-on (say, 15 percent) to accommodate closets, niches, and (undefined) whatnots, is used.


Reading a Floor Plan

A comparison walk-through priority list involves:

  • Confirming the info provided;
  • Evaluating the stated valuable considerations;
  • An investor, in addition to confirming the data and the condition, evaluates the positive and negative features needed for the rental market.

As the owner-occupant the considerations are all of the above, plus a comprehensive survey for the ordered priority list—first impressions do not always tell the tale for your particular needs.

Put on blinders: the décor is irrelevant. Look past it.

Exposures, light, view, require going to the window, opening the window treatment, and see for yourself.

Allowing your mind’s eye to focus on the general flow (both between public rooms as well as the public rooms in relation to the family bedrooms), so then your eyes can take in what you are actually seeing.


While in a room, refer back and forth to the plan in order to ameliorate a less than well-developed spatial sense. When making a dimension calculation, choose one approximation method and stick to it. Pick from among the following constants to apply:


  1. Beforehand measure your foot length, use it to walk-off your steps from wall to wall, and do the math as a reliable approximation.
  2. Eyeball the window width to guesstimate how many would fit along the exterior wall, and do the math as a somewhat reliable approximation.
  3. Choose a piece of furniture to gauge the wall length it is on: a sofa seating three is six feet long, a love seat is four feet long, and a piano is five feet long. And, do the math as a less vague approximation.

When approximating, give the benefit of the doubt as is on the show sheet or diagram. Otherwise, note the doubts and keep your thoughts to yourself.

Finally, for future reference and comparison, take notes regarding your overall impression of the condition, and then assess the kitchen and bathrooms individually. In addition, visual devises (a well-placed smoky mirror, for one) can belie the eyeball approach. Therefore, make a quick judgment for future reference, whether or not the photographs are an accurate depiction.


Getting the Gist

After the qualifying apartment facts are gathered and the questionable aspects are clarified, the purpose to study a floor plan is the unit’s relevance to you as an investor or owner- occupant.

The criteria are parallel: usefulness.

The living space desired (needed) is subjective—and relative—and so much depends on the layout’s flow, room proportions, but ultimately, their placement in relation to one another. Ingress and egress through another area, for instance, is or is not workable.  Certainly noteworthy, since the space must accommodate particular individual needs.

Next are your high priority and other considerations. Go down the list, and evaluate the very most important ones—outdoor space, especially. Note the missing items that could entirely disqualify the property, such as a windowed-eat-in kitchen or formal dining room or fireplace. Note each item on your list or you may be asking yourself, where were the air conditioners?

Follow the flow: going forward from the entry orient the public rooms from the family area—the bedrooms and bathrooms. Take the room and number of bed- and bathroom count. Take in the living room proportion—noting window placement and irregularities, and the dining type—room or area, and scan the kitchen—as open, galley or eat-in.

Next, it is true that every apartment needs one good room—look first for that “good” room. Then, focus on the living and entertaining space. Among these clustered areas, check out that the rooms are clearly defined, the entry foyer leads to the living room and dining area, that separate areas or niches are functional, and that the convertible (multiple-use) rooms—a  separate library, perhaps—access a nearby bathroom. Or, that the servant’s quarters could be put to practical use.


Then gauge whether the family bedrooms and bathrooms are well located in relation to the entertaining areas. Their relative bedroom sizes are judged according to one another.

  • The master bedroom should be easily differentiated: larger, more closet space, en-suite bathroom, and double-exposure are common.
  • Bathrooms matter, so note their size, and then evaluate whether each is generous, adequate, or small.
  • Also, note whether there is a window according to the layout.
  • Closet space is always a plus, so critique as adequate or not.


Personal Planners


For a seller this review is a checklist to put the important priorities upfront. Moreover, the planner includes an array of criteria to match a seller and one qualified buyer. The system will prompt you to clarify your ideas and to provide a flexible structure in which to make notes. Take your time to collect your thoughts and outline your goals. With our step-by-step plan, you can pinpoint pricing and clarify marketing decisions before listing your unit.


For a buyer the Personal Planner gives you a detailed approach to establishing the criteria and what priorities you value most in your next home. Using our Personal Planner will clarify your thoughts and outline your goals. It crystalizes the search parameters. One way to amplify the value is to save your entire original notes–especially with additions or changes to the original parameters. By doing follow these easy guidelines, you can review all the steps taken in depth, and it enables you to arrive at a successful realistic conclusion, which will be very useful as reference during future negotiations.


Here are the considerations for a seller and buyer.





Seller Review


Practical considerations


The positives


Precondition to move forward



Next home

_To be determined




Ideal move out date


Sale method


­_By broker



Real-estate attorney’s name


Legal documents locator

_Ownership documents

_Mortgage instrument

_Offering plan




Building data checklist


_Three past financial statements

_Maintenance charges

_Flip tax percentage

_Assessment amount

_Financing allowable

_Application to purchase

Buyer Priorities


High priorities


Sell first


_Why not


Buy first




Financial considerations

_Cash down

_Pre-approved mortgage amount

_Housing budget

_ Liquid assets


Important considerations


_Commute time





Move-in time frame


Personal considerations:




 Board application notes:





Owner’s Checklist


Documents gathering



_Freshen up




_Notes to do

_Estimated cost


Marketing tools


Show sheet


_Listing description



Online marketing

_Template creation

_Listing distribution means

_Brokerage firm update lists


Open House Planner








Fair market value


_Asking price range

_Acceptable offer range

_Yet to be determined




Seller and Buyer Parameters



_Laundry room


Primary considerations

_Outdoor space


_Washer/dryer allowed



Lobby service



_Attended elevator


_No doorman

_Live-in superintendent


Additional features





Common areas




Room count


_Bedroom number

_Convertible space


Bathroom count


_Powder room

_Servant’s bath


Dining space

_Separate Room


_In living room

_In Foyer







Additional space


_Servant’s room and bath


Valuable Consideration Comments:

Apartment House Data and Preferences


Ownership type








_Flats (early apartment house)

_Apartment Hotel (deluxe service)

_Small Apartment House



_Apartment Tower (service-oriented)

_Row House

_Town House

_Brownstone conversion

_Office building conversion


Neighborhood designation

_Lower Manhattan

_Downtown East

_Downtown West

_Midtown East

_Midtown West

_Upper East Side

_Upper West Side


_Upper Manhattan




_Laundry room


_Washer/dryer allowed


Lobby service



_Attended elevator


_No doorman

_Live-in super


Additional services





Common areas



Unit Facts and Preferences

Monthly charges (with taxes)










_Decorate only

_Cosmetic changes





_Decorate only

_Cosmetic changes




Room count


_Bedroom count

_Convertible space


Bathroom count


_Powder room

_Servant’s bath


Dining space

_Separate Room


_In living room

_In Foyer








Additional space


_Servant’s room and bath


General Comments:











Private outdoor space


_Juliette balcony












_Direct sunlight


Valuable features

_Semi-private landing

_Wood-burning fireplace


_Hardwood Floors


_Window type



Click to collapse a Mastering Manhattan annotation mark with explanatory remarks to refer to or to suggested related info in all our topical primers, manuals, guides, and handbooks.Related links to:

Note: However, the age-old current housing health statistic is affordability. Therefore, herein are our suggestions to calculate the monthly gross (and, subsequently, net) housing costs in relation to household income, and that, too, determines each negotiation position.




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Click to collapse a Mastering Manhattan annotation mark with explanatory remarks to refer to or to suggested related info in all our topical primers, manuals, guides, and handbooks.

Note: After running thes comps and competition from the results a seller can then conclude where—within a range—they would be comfortable pricing their property; and a buyer can glean where their opening offer should be within the fair-market value range.

(Realizing that an offer below that range may not open a dialogue and providing a counteroffer. Or, when to demur and refrain from making further offers.)

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Click to collapse a Mastering Manhattan annotation mark with explanatory remarks to refer to or to suggested related info in all our topical primers, manuals, guides, and handbooks.Related links to:

Note: The text assumes a certain familiarity with the common terminology and lingo used and the valuable considerations discussion. A look through the glossary whenever necessary would be helpful, too.

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Corresponding Paperwork Notations
Glossary and Sub-glossaries
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