HOW MUCH HOME CAN YOU AFFORD TO BUY

Shopping for a new home can be complicated and stressful. Frequently, over the last 30 years, working as a real estate attorney, people have asked me:  “Hey, Jeff, where do I  start?”

The first question I ask is,  How much can you afford to spend? This is a two-part question:  How much cash do you have available for a down payment and how much of your income can you afford for a monthly house payment.

That payment will generally include the mortgage payment plus taxes and insurance payments.   The answer will obviously depend on what your other monthly expenses and obligations may be.

My first piece of advice is to begin by gathering as much relevant information, beginning with determining the cost of borrowing. That is why I recommend you begin by talking to a mortgage broker.  He/she can look at your income level, current expenses and give you a good idea of how large a mortgage you can comfortably handle.  That is why I suggest you call an independent mortgage broker.  One broker I highly recommend is Scott Lanoff. I have known Scott for over twenty (20) years.  He is honest, smart and his consultation is free.  Give Scott 20 minutes and he will be able to tell you how much house you can afford and what the monthly cost will be.  Check out his website at americansuccessmortgage.com/.

If you have any further questions, call me  (212) 693-3737, Jeff Weinstein.

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“Property Brothers” stars endured debt and bankruptcy

In a new memoir by twin brothers, Johnathan and Drew Scott, who star in the HGTV show  “Property Brothers,” they tell of the hard road they had to drive before they landed their popular TV show.

Johnathan was an aspiring magician until his supplies and equipment were stolen and he wound up declaring bankruptcy. His real estate broker brother Drew wound up $100,000 in debt trying to become an actor.

Drew was taking acting classes in Vancouver and as he told People Magazine

We had been doing real estate for some time, but I missed my passion, acting…I went to Vancouver to pursue that, and I was taking acting courses, networking and doing all the things I had to do to make sure that I was being seen. “In the end, that experience was really important because it created the buzz for our first auditions,” he says, “which got us on TV and made it worth it.”

The two say their book is brutally honest and nothing is left out, the the good and the bad are included. The memoir, “It Takes Two: Our Story,” will be released on Sept. 5th and will be accompanied by a book launch in Engelwood, N.J.

The brothers are now two of HGTV’s biggest stars. On their show, Property Brothers,  they help people buy and renovate houses that need work, while working within their clients’ budgets.

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Is Haunted House A “Defect” Under The Property Disclosure Law

Under the New York Property Condition Disclosure Act (PCDA) (N.Y. Real Prop. Law § 460-467), a seller of real property must disclose any hidden defects relating to that property to the buyer. Failure to inform the buyer about such latent material defects could result in unlimited post-closing liability upon the seller, even if the seller was unaware of those defects.

For example, if after the sale, the buyer finds leaks in the piping, which the seller had not revealed, then the seller would be held liable to cure that defect. Due to this onerous provision in the law, a seller may ‘opt-out’ of the disclosure requirement by agreeing to pay the buyer a one-time waiver fee of $500.

Over the years, people have been trying the expand the scope of the term ‘material defects’. In Stambovsky v. Ackley, 169 A.D.2d 254 (SC New York 1991) the court dealt with the question of duty to disclose that a house was haunted. The buyers claimed a ‘haunted house’ was a material defect and sued for damages.

The court stated that a buyer may not pursue a legal remedy for fraudulent misrepresentation against the seller on the grounds that the premises is haunted. New York law fails to recognize the calculus for placing a value on ‘haunted houses.’ Any remedy for damages incurred as a result of the seller’s mere silence was denied.

However, the court held that reports of hauntings had lowered the resale value of the house, and held that while caveat emptor prevented an action for monetary liability, it did not prevent the equitable remedy of recission.

To conclude, New York law does not recognize a haunted house as a material defect upon the property. But the courts left the squeaking door open, to allow a rescission of the contract because the house was haunted, as a remedy in equity.

If you you have any queries relating to real estate planning, please contact the office of Jeffrey Weinstein at 212-693-3737.

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CO-OP APARTMENTS. REAL or PERSONAL PROPERTY ?

You may think the answer is obvious. But the correct answer is
“It depends.” It depends on the year purchased. If the co-op
apartment was purchased by a married couple before 1986,
the law MAY treat the property as personal.

Subsequent to 1996 the law was revised to treat co-ops as
real property with respect to co-op apartments.

This means that prior to 1996, there was no presumption that
a co-op purchased by married couples was jointly held as
tenants-by-the-entirety. If the stock and lease does not
specifically state that the property is being held as joint
tenants with the right of survivorship, it is deem to be
separate property, just like any other personal property.

How does this become an estate issue?

If the co-op was acquired before 1996, and the stock was not
subsequently reissued to the married couple, the decadents
interest in the property does not automatically transfer to
the surviving spouse. If it was the parties intention to
convey the decedent’s share of the co-op to the surviving
spouse, this must be:
(1) stated in the Will, (2) change the stock certificate
to read: Joint tenants with the right of survivorship.
For your protection and to avoid surprises
give me a call at 212 693-3737 or call your estate planner.

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SAVING REAL ESTATE THROUGH BANKRUPTCY

Many real estate owners are confronting the worst housing market in decades. Foreclosures and loan defaults are at an all-time high and refinancing is difficult even for creditworthy homeowners. As a result, bankruptcy has become the favorable choice for many property owners facing foreclosure. Here are some of the ways bankruptcy can help:

  1. The filing of a bankruptcy petition stops a foreclosure dead in its tracks:
    The “automatic stay” provision of the bankruptcy code will temporally stop all litigation and any attempt to collect a debt the moment the bankruptcy case is filed with the court. In fact, filing a bankruptcy petition can immediately stop a foreclosure sale. A federal bankruptcy case filing trumps many state rights of creditors to proceed against a debtor, with few exceptions.
  2. A bankruptcy case can serve to cure a default and reinstate a mortgage:
    Most property owners that have fallen behind on mortgage payments have few remedies available to them that do not include either the full payment of their mortgage arrears in one lump-sum or redemption of the property through payment of the entire balance due to the lender. But in this credit-tight market, these options are rarely available. For that reason, a Chapter 11 Bankruptcy or chapter 13 bankruptcy case is often the only solution available to save real estate. These cases enable a property owner to cure a mortgage default by repaying the mortgage arrears through a monthly payment plan. Once the property owner completes the plan, the mortgage is reinstated and the default is cured.
  3. Some mortgages can be eliminated or modified in bankruptcy:
    The bankruptcy code permits a debtor to modify the terms of a mortgage if the property is worth less than the amount due to the lender. A second mortgage on a residence and any mortgage on any other property may be modified or reduced. In some instances, if the first mortgage exceeds the value of the property, a second mortgagee can convert the lien from secured to unsecured status. The second mortgage holder then is treated as a general creditor with no rights against the real estate. This bankruptcy procedure has become a powerful tool for homeowners with no equity in their homes. Relieving homeowners of the burden of paying a second mortgage often provides the additional income needed to save the home.

Thus, bankruptcy can serve as a tool for a homeowner to level the playing field against big banks and assist individuals to get back on the road to financial stability.

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